The Facts
Increases in patient copayments lowers HEDIS scores, demonstrating the connection between financial aspects of plan design and quality performance.
The University of Michigan Center for Value-Based Insurance Design (V-BID Center) leads in research, development, and advocacy for innovative health benefit plans.
Leadership
Since its inception in 2005, the University of Michigan Center for Value-Based Insurance Design has led efforts to promote the development, implementation, and evaluation of innovative health benefit designs balancing cost and quality. A multidisciplinary team of faculty, including A. Mark Fendrick, M.D., Dean Smith, Ph.D, and Michael Chernew, Ph.D, first published and named the V-BID concept, and has guided this approach from early principles to widespread adoption in the private and public sectors. The Center played a key role in the inclusion of V-BID in national health care reform legislation, as well as in numerous state initiatives.
Concept
The basic V-BID premise is to align patients’ out-of-pocket costs, such as copays and premiums, with the value of health services. This approach to designing benefit plans recognizes that different health services have different levels of value. By reducing barriers to high-value treatments (through lower costs to patients) and discouraging low-value treatments (through higher costs to patients), these plans can achieve improved health outcomes at any level of health care expenditure. Studies show that when barriers are reduced, significant increases in patient compliance with recommended treatments and potential cost savings result.
> View Featured Publications
Implementation
V-BID began receiving national attention in 2004 when the Wall Street Journal reported that Fortune 500 employer Pitney Bowes experienced a $1 million savings from reduced complications after lowering copayments for asthma and diabetes medications. Since then, numerous private and public employers, including the city of Springfield, Oregon, Marriott Corporation, the Midwest Group on Health, Florida Power and Light, Service Employees International Union, UnitedHealth Care, the State of Maine, and the University of Michigan have implemented value-based insurance design approaches. Seventy-three percent of opinion leaders – representing health policy experts and innovators in health care delivery and finance – expressed support for V-BID as part of the October 2010 Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey.
> View Examples of V-BID in the Landscape Digest
Public Policy
V-BID has been recognized as an important public policy measure for balancing costs and quality in health care at the local, state, and federal level. V-BID was incorporated into the 2010 federal health reform law as Section 2713 (c) of the Patient Protection and Affordable Care Act. The guidelines for implementing Section 2713 utilized V-BID principles to make preventive care more accessible to millions of Americans. In late 2010, the Departments of Labor, Health and Human Services, and Treasury issued a request for information on V-BID and preventive care, signaling its interest in pursuing new federal policies on V-BID. V-BID was prominently featured in HHS’s National Quality Strategy (March, 2011), and it was incorporated as a key recommendation in the Institute of Medicine’s Essential Health Benefits report (October, 2011). Apart from its role in health reform, V-BID’s potential for adding value to Medicare has been repeatedly cited by the Medicare Payment Advisory Commission (MedPAC), in its 2009, 2010 and 2011 reports to Congress.
> View More Health Reform items
