Value-Based Insurance Design

Abstract

By abandoning the archaic principle that all services must cost the same for all patients, we can move to a high-value health system.by Michael E. Chernew, Allison B. Rosen, and A. Mark Fendrick ABSTRACT: When everyone is required to pay the same out-of-pocket amount for health care services whose benefits depend on patient characteristics, there is enormous potential for both under-and overuse. Unlike most current health plan designs, Value-Based Insurance Design (VBID) explicitly acknowledges and responds to patient heterogeneity. It encourages the use of services when the clinical benefits exceed the cost and likewise discourages the use of services when the benefits do not justify the cost. This paper makes the case for VBID and outlines current VBID initiatives in the private sector as well as barriers to further adoption. [Health Affairs 26, no. 2 (2007): w195-w203 (published online 30

An Aging Population And Growing Disease Burden Will Require ALarge And Specialized Health Care Workforce By 2025

“…The increased use of value-based insurance design and efforts to make patients and providers more cost-conscious might reduce demand for services with lower demonstrated value while increasing demand for services with higher demonstrated value. 27 Expanding the scope of practice of allied health professionals-to include services that currently require a physician's supervision but that evidence demonstrates can be safely performed by nonphysicians-could help meet increased demand for both primary care and specialty services. This would make more highly trained specialist physicians more productive by allowing them to focus on more clinically complex services and procedures.…”

Controlling Health Costs: Physician Responses to Patient Expectations for Medical Care

“…For example, some payers are turning toward value-based insurance design utilizing cost sharing arrangements to incentivize consumer choices for clinical services with strong evidence of benefit and discourage use of lower-value, marginally beneficial services. [25][26][27] Additionally, increasing access to objective health information will help patients sort through the value of different services. For example, the Choosing Wisely campaign focuses on common low-value services and encourages physicians and patients to discuss tests and procedures that may be unnecessary.…”

Trends in Patient Cost Sharing for Clinical Services Used as Quality Indicators

“…[6][7][8][9][10] The basic VBID premise is that patient contributions for essential services remain low, mitigating the concern that higher cost sharing will lead to deleterious clinical outcomes. Numerous private and public sector employers, health plans, and pharmacy benefit managers have implemented VBID programs providing incentives to increase the use of services designated as quality indicators.…”