The Impact of Value-Based Insurance Design on Health Spending

Health Affairs Thematic Issue

The November 2010 issue of Health Affairs explores the future of value-based insurance design (VBID) to reduce spending on unproven and costly interventions. The package of seven articles was sponsored by CHCF.

November 2010

Value-based insurance design (VBID) has emerged as an important tool for tamping down health care spending by lowering consumer cost sharing for everything from preventive care services to prescription drugs. New VBID models, however, must provide stronger incentives for patients to participate in treatment choices, according to analysis sponsored by the California HealthCare Foundation (CHCF) and published in the November 2010 issue of Health Affairs.

In the lead paper of a package of seven articles on VBID, "Applying Value-Based Insurance Design to High-Cost Health Services," James C. Robinson, professor of health economics at the University of California, Berkeley, notes that for VBID programs to have a stronger clinical and economic impact, they must start to include value-based cost sharing and payment incentives for consumers and physicians, respectively, for specialty drugs, medical devices, advanced imaging, and major surgical procedures — a  new frontier of insurance design. Robinson also organized a 2009 roundtable on VBID that was jointly sponsored by CHCF and Health Affairs.

In another article, "Value-Based Insurance Design: Consumers' Views on Paying More for High-Cost, Low-Value Care," author Marjorie Ginsburg, executive director of the Center for Healthcare Decisions, examines the carrot-and-stick approach to VBID and says consumers may be willing to compromise on higher-cost, less-effective treatments if they are required to spend more of their money to cover the care.

The issue also includes perspectives on value-based insurance design from the following experts:

  • Niteesh K. Choudhry, assistant professor of medicine, Harvard Medical School, and associate physician, Brigham and Women's Hospital
  • A. Mark Fendrick, professor, Department of Internal Medicine and the Department of Health Management and Policy, University of Michigan
  • Joan Kapowich, administrator, Public Employees' Benefit Board and the Oregon Educators Benefit Board
  • Matthew L. Maciejewski, research career scientist, Center for Health Services Research in Primary Care, Durham Veterans Affairs Medical Center, and associate professor, Division of General Internal Medicine, Department of Medicine, Duke University Medical Center

The seven articles are available free of charge on the Health Affairs site listed under External Links below.