February 7, 2013

According to two recently published reports, the successful implementation of value-based insurance design (V-BID) in state exchanges is contingent on transparency and consumer education efforts.  As officials from California and other states contemplate V-BID options for their exchanges, the commentaries initiate a roadmap to effective execution.

A Robert Wood Johnson Foundation funded study, published in this month’s Health Affairs, praises V-BID plans for their ability to align provider/patient incentives and “reward value of care over volume of care.”  The authors note the trade-offs between the flexibility required to implement clinically nuanced value-based insurance designs and the simplification permitted by a standard benefit design.  In their analysis, the authors note the evidence base for V-BID and recommend ways to support consumers who may be interested in choosing these plans.

A second paper from Consumers Union lays out six evaluative criteria that should be met by California or other state exchanges offering a V-BID plan, including:

  • Proven evidence of health improvement
  • Demonstration of provider and consumer understanding
  • Convention of an advisory committee
  • Provision of equal access to incentives and providers
  • Identification of unintended consequences
  • Documentation of the plan’s impact

The paper also argues that, in the future, if evidence shows V-BID is beneficial, the California exchange “should consider requiring all plans to address these benefits.”

The University of Michigan Center for Value-Based Insurance Design welcomes these papers that continue the dialogue about the role of V-BID in state health exchanges. As both papers note, V-BID strives to link consumers’ financial incentives with the clinical benefit of services and providers.  Facilitating a transition from a “volume-based” to “value-based” system will result in better health and a more efficient use of health care dollars. We hope states and other purchasers will seriously consider the noted benefits of these plans as well as the approaches suggested by these new contributions.