Health Insurance

Value-Based Insurance Design

There have been a lot of “value-based” initatives in health care of late.  Value-based purchasing aims to reward high-quality providers with either higher reimbursement rates or periodic bonuses.  On the other hand, value-based insurance targets the patient side.  The value-based insurance scheme varies cost sharing depending on whether the drug, procedure, or treatment is considered high value.  Disease management is also often linked with value-based insurance strategies.

For instance, this paper examined the effect of instituting a value-based insurance design for drug purchases.  The company’s health plan charged a “10 percent coinsurance for retail prescriptions and 7.5 percent coinsurance for mail-order prescriptions used to treat these three conditions. The coinsurance percentage was calculated as a percentage of the total cost of the medication. Medications for conditions other than those included in the program were assessed 20 percent coinsurance for retail and 10 percent coinsurance for mail-order prescriptions…General disease management programs for asthma, cardiac conditions, and diabetes were also implemented.”

By varying copayment rates, the company found that adherence rates increased significantly.

Another study found that disease management can greatly improve adherence.

V-BID Center

For those interested in Value-Based Insurance Design, I recommend you check out the following resource.

The University of Michigan Center for Value-Based Insurance Design (V-BID Center) is the leading advocate for development, implementation and evaluation of innovative health benefit plans. Since 2005, the Center has been actively engaged in understanding the impact of value-based insurance design and collaborating with employers, health plans, policy leaders, and academics, to improve clinical outcomes and enhance economic efficiency of the US health care system.

Our website,, is designed to be a resource for employers, benefit designers, health care leaders, policy leaders and researchers interested in learning more about and implementing V-BID programs.  The site includes research (both by the Center’s faculty and other V-BID researchers), case studies, health reform and policy summaries, as well as presentations by Center faculty and upcoming events to learn more about V-BID.”


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