VBID Gathers Steam

According to Health Care Payer News, value-based insurance design (VBID) is starting to gain traction among large employers. Large self-insured employers like Marriott and Pitney Bowes have started incorporating VBID into their benefit packages, and public employee plans in seven states, including Oregon, Connecticut, Minnesota and Tennessee, have as well — mostly with union support.

For example, Connecticut, trying to address a $3.5 billion deficit, implemented a VBID plan for public employees in 2011. Employees had the option of staying in a PPO — with $100 more in premiums per month, plus a $3,500 deductible — or enrolling in a no-deductible VBID plan that includes a health risk assessment and participation in chronic disease management programs for those with the conditions.  Now, 98 percent of the beneficiaries are enrolled in the VBID program, and while the Connecticut comptroller “can’t say he’s saving money, it’s neutral,” says Dr. Mark Fendrick, director of the VBID Center at the University of Michigan.

Also, for the first time, the Centers for Medicare & Medicare Services is allowing value-based designs in Medicaid, with clinically nuanced cost-sharing for drugs, ER visits, and hospitalizations. But VBID has a ways to go before it's considered mainstream. Estimates indicate that non-clinically-nuanced high-deductible health plans are about 30 percent more prevalent than VBID, and there are still obstacles — both in perception and policy.

Aetna had a VBID medication program for heart attack patients, offering four drugs shown to help prevent second attacks for free — and the rate of adherence increased only from 42 to 49 percent. Another obstacle to VBID is the Internal Revenue Services’ regulations on health savings accounts.

New White Paper on VBID and Transparency

The Catalyst for Payment Reform (CPR) and the V-BID Center at the University of Michigan released a joint white paper examining obstacles to quality and price transparency. The paper highlights ways to motivate consumers to shop for care based on value and focusing on initiatives that meld consumer incentives with greater price transparency. The paper examines several successful models, including some used by CPR members, CalPERS, Group Insurance Commission of Massachusetts, Pitney Bowes, and Safeway, Inc. These initiatives include reference and value pricing, tiered and narrow networks, centers of excellence contracting, and value-based insurance design. Blending quality and price transparency with evidence-based consumer incentives can lead to an increase in the use of higher-value care and clinically appropriate services delivered in the most appropriate venue. In turn, this should also lead to a decrease in inappropriate and potentially harmful medical expenditures.

University of Michigan's VBID Center Info on CMS' SIM Program

CMS' State Innovation Model program is an important opportunity for local areas to align payers with each other, and with consumers to encourage the use of appropriate incentives, such as those used in value-based insurance design.  The University of Michigan's VBID Center has produced an Issue Brief on the SIM program's potential for advancing the use of VBID.  The Issue Brief includes a video overview and links to important CMS documents on the SIM program.

New V-BID Center Research Shows Guarded Consumer Support for V-BID Concepts

This new issue brief from the Center for Value-Based Insurance Design at the University of Michigan indicates that consumers are generally supportive of V-BID concepts but are concerned about interference in the doctor-patient relationship and fairness in V-BID approaches to cost-sharing. There was broad support for “carrot” V-BID plans (making valuable care more affordable) especially when these designs were perceived as saving money and lowering insurance premiums for all beneficiaries.

Participants in the V-BID Center study also defended the values of individual responsibility and fairness when it comes to health, yet opinions were mixed regarding the use of clinical nuance in plan design. Some preferred that health plans offer incentives to a broader group of people (rather than singling out specific conditions) while others favored targeting support for those that demonstrate the greatest health needs.

V-BID Registry Launched

The University of Michigan Center for Value-Based Insurance Design (V-BID Center) is proudly launching the V-BID Registry at www.vbidregistry.org.

The registry is a free resource designed to gather and share examples of value-based insurance design from across the US and abroad. Submitted examples are reviewed by the V-BID Center and posted to the registry site, where anyone -- employers, plan designers, policy makers, researchers -- can sort by location, targeted disease state or keyword to find the most relevant V-BID programs.