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. Continue reading Value-Based Insurance Design