Introduction to Value-Based Insurance Design

When all patients are required to pay the same out-of-pocket amount for imaging services, which have varying degrees of benefit dependent on patient characteristics, there is potential for overuse and underuse. Rising costs of health care have stimulated efforts to redesign health care packages. Cost sharing has emerged, whereby costs are the same for everybody. Unlike traditional health care plan designs, value-based insurance design tailors the cost of care delivery to the benefit that a patient or class of patients derives from that care. With value-based insurance design, cost sharing is still used, but a “clinically sensitive” approach is designed to mitigate the adverse health consequences of high out-of-pocket costs. The authors summarize the principles of value-based insurance design and review examples of its implementation in other areas of medicine.

Key Words: Value-based insurance design, benefit-based copays, disease-management programs, pay for performance, consumer-directed health care, consumer-driven health plans