Value-based insurance design: Alternative to high-deductible plans
AUDIOCONFERENCE ON CD OR AUDIO ARCHIVE
Sponsored by Consumer Driven Healthcare
presented on March 13, 2008
Reducing the cost of co-pays for chronic illness treatments improves medication compliance and may significantly impact long-term costs of treating such diseases. The concept of value-based insurance design (VBID) (also known as value-based benefit design) suggests that prescriptions for drugs treating such conditions as heart disease, hypertension, or diabetes should cost nothing or very little compared to the expenses for non-life threatening medicines. Theoretically, if people do not have a barrier—such as cost—to accessing necessary drugs, they are more likely to utilize them. Hence, prevention of major chronic disease is stressed, and less money could be spent down the road to treat a sick individual.
VBID is gaining in popularity in the consumer driven healthcare and disease management industries, and the idea received a shot in the arm with January’s release of a major study led by a team of University of Michigan and Harvard University researchers. The study involved two major companies, one of which cut co-pays in half or altogether to its employees. Employee use of important preventative medicine increased significantly in the business which reduced its rate, whereas the employer whose rates remained stagnant did not experience a similar improvement.