In The News...
July 15, 2008:
The Center for Value-Based Insurance Design is pleased to announce that the University of Michigan has received the Institute for Health and Productivity Management (IHPM) 2008 Initiative for Value-Based Health Benefits (IVB) Award for Public Employer. This award recognizes demonstrated leadership and innovation in value health management, including health benefit design, and highlights the University of Michigan's work to reduce barriers and improve health outcomes for its employees and dependents with diabetes mellitus through the MHealthy: Focus on Diabetes project. More information about the Institute can be found at www.ihpm.org.
May 14, 2008:
On May 14, 2008 Michael Chernew, PhD, founding Director of the Center for Value-Based Insurance Design, provided testimony before the U.S. House of Representatives Ways & Means Committee's Subcommittee on Health, entitled "Cost Sharing in Health Care Markets." View PDF
In response to discussion at the hearing about the RAND Health Insurance Experiment's findings regarding the impact of cost sharing on health outcomes, Professors Chernew and Newhouse (who led the RAND study) authored the following article, noting that while the RAND study indicates that on average there were minimal or no adverse health consequences associated with higher cost sharing, the study should not be used to justify higher cost sharing across the board. View Article
January 8, 2008:
The co-pay connection -
Lowering drug co-pays for chronic disease patients increases use of important preventive medicines, rigorous study shows. Read Press Release
Watch a video of Dr. Fendrick explaining this study, the concept of "value-based insurance design" and the implications of these study results for other employers and insurers.
Impact Of Decreasing Copayments On Medication Adherence Within A Disease
Management Environment Value-based cost sharing can increase patients’ adherence to
important medications. View publication
The University of Michigan Center for Value-Based Insurance Design was established in 2005 to develop, evaluate, and promote value-based insurance initiatives that achieve improvements in health outcomes and contain health care costs. The Center is the first academic venue in which faculty with both clinical and economic expertise conduct empirical research to determine the health and economic impact of innovative benefit designs.
Value-based insurance design offers a potential solution to the health care financing crisis. Value – the clinical benefit achieved for the money spent – is absent from the current dialogue on how to solve the health care dilemma. Instead, the dialogue focuses on two trends in benefit design – cost containment and quality improvement – which create a conflict of incentives for patients. For example, employers increasingly enroll beneficiaries in expensive disease management programs designed to improve patient self-management, often by intervening to enhance compliance with specific medications. However, at the same time, rising copayments and greater cost-sharing create financial barriers that discourage the use of recommended services. When patients are required to pay more for their health care, it is well known that they buy less – of both essential and excessive therapies alike. Value-based benefit packages would adjust out-of-pocket costs on an assessment of the clinical benefit to the specific patient population. Thus, the more clinically beneficial the therapy for the patient, the lower that patient's cost share would be. By aligning financial incentives, this strategy would encourage the use of high-value care while discouraging the use of low-value or unproven services.