Value-Based Insurance Design

Physician groups, hospitals and health systems are feeling pressure, principally applied by private insurers and other payers, to figure out how to improve the quality of care we provide and lower its cost. Our intense efforts to do so, all too often coupled with a hefty dose of resentment and unhappiness that we have to, may make us less likely to notice that insurance companies are also trying to achieve the same ends by directly influencing the choices that patients make about their own care. These efforts come under the broad rubric of “value-based insurance design,” or VBID.

The basic idea of VBID is pretty simple: adjust the out of pocket costs (co-pays and deductibles) that patients face to “steer” them from one course of action to another. The concept is not particularly new, and is probably most familiar in the realm of pharmacy benefits, where reduced co-pays for generic drugs or selected drugs of a given class have been prevalent for years.

What is new is the expansion of these kinds of incentives into realms that were either untouched or governed by utilization management programs. For instance, patients may face higher costs for imaging studies or interventions with weaker evidence bases (a “negative” incentive) or have their co-pay waived for statins following an MI, in hopes of boosting adherence (a “positive” incentive).

Does this work? I find it fascinating that much like “pay for performance” the answer seems to be “seems like it should, but we don’t know.” Despite the limited evidence for efficacy, I think this is only going to grow in the scope of services affected and the scale of the incentives.

What do you think?

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