June 25, 2013

A. Mark Fendrick, M.D.
Director, V-BID Center


Value-Based Insurance Design (V-BID), a concept developed and researched by the 
V-BID Center at the University of Michigan, has garnered recent attention from high profile state health policy makers. In a U.S. House of Representatives Energy and Commerce Committee hearing, Director of South Carolina Health and Human Services Anthony Keck testified that he was a "strong believer in V-BID" and hoped to use clinically nuanced designs in the state's Medicaid program. (view video)  Medicaid policy expert Seema Verma supported the use of V-BID in Medicaid in testimony at the same hearing.


Separately, during a national summit on state health insurance exchanges, Dr. Joshua Sharfstein, Secretary of the Maryland Department of Health and Mental Hygiene, noted that his state was examining V-BID's role in the Maryland Health Benefits Exchange and that the 

V-BID concept could "improve health outcomes and lower costs." (view video)


Both Sharfstein and Keck specifically mentioned their collaboration with the V-BID Center.


In addition, during a recent hearing on price transparency before the U.S. Senate Committee

on Finance, Paul Ginsburg, President of the Center for Studying Health System Change, 

testified that the key to leveraging transparency into lower prices was to employ programs with V-BID principles. Ginsburg told the committee, "without changes in insurance benefit designs that steer patients to high-value providers--those that provide high-quality care efficiently--price transparency initiatives are likely to continue to have limited impact."


The recent remarks by health policy experts demonstrate the growing momentum for V-BID as a bipartisan idea with broad support. V-BID, driven by the employer community, has become a popular and practical solution for private and public payers hoping to move the health care system away from volume and toward value.


The basic premise of V-BID is to align consumer incentives with health care value by reducing barriers to high-value health services and providers ("carrots") and discouraging the use of low-value health services and providers ("sticks").  The V-BID concept takes a clinically nuanced approach which recognizes that: 1) medical services differ in the benefit provided; and 2) the clinical benefit derived from a specific service depends on the patient using it, as well as when and where the service is provided. V-BID has shown significant promise in controlling costs and improving health. 


V-BID Center Director A. Mark Fendrick, MD, spoke at a meeting of the National Governor's Association this week. He discussed using V-BID in state employee health plans.
About University of Michigan, Center for Value-Based Insurance Design

The University of Michigan Center for Value-Based Insurance Design (V-BID Center) leads in research, development, and advocacy for innovation in health benefit plans, delivery system transformation and payment reform. The Center played a key role in the inclusion of V-BID in numerous private sector and state-based initiatives.