Can we pay for less of the “bad stuff” so we can afford more of the “good stuff”

By Jill Zorn 


While there are many potential avenues to moderate the negative impact of high deductible health plans, or HDHPs, one little known but worth discussing option is value based insurance design or VBID.  


High deductible health plans were allegedly invented to keep people from over-utilizing unneeded health care services, but they act as a “blunt instrument” leading people too often to avoid getting care they need.  

What if there was a way for insurance to make it easier for people to pay for the “good stuff,” or high value care, by providing incentives for patients to avoid getting the “bad stuff,” or low value care 


That is exactly what the High Deductible Health Plan Task Force members heard from University of Michigan’s Dr. Mark Fendrick when he made a presentation at their December 4 meeting when Dr. Fendrick presented about VBID.


What exactly is Value Based Insurance Design (VBID)? 

VBID is an approach to health insurance that removes financial barriers that could keep people from getting the care they need.  Examples of VBID include: 

  • Free preventive visits and tests.  
  • Co-pays or deductibles are reduced or eliminated to promote access to medications needed to manage chronic illness like diabetes or high blood pressure. 


Because VBID encourages people to get needed care, it can help people maintain their health.   It can even lead to cost savings over time, by preventing avoidable complications and keeping people out of the hospital.  

Connecticut’s state employee health plan uses a VBID design in what is known as their Health Enhancement Program.  A study conducted by Dr. Fendrick’s VBID Center showed that use of recommended care by employees increased.  For example, employees were more likely to take their medications as prescribed.  At the same time, use of the emergency room decreased.   


Avoiding Low Value Care 

Still, in the short run, a health plan using a VBID approach can raise health care expenses.  When barriers to care are lowered, people generally use more health care services.  So, Dr. Fendrick added to the VBID concept by including incentives to decrease care, too– specifically low value care that is unnecessary or even harmful.  The goal is to decrease use of low value care in order to counterbalance the cost of increases in the use of high value care.   


One estimate is that about 14 percent of all health care expenses are for ineffective or inefficient care.  So, there are plenty of places to look for decreasing low value care.  Examples include: 

  • Overuse of MRIs for low back pain 
  • Overuse of antibiotics for viral infections 
  • Overuse of lab and x-ray testing prior to low risk surgery 


VBID and High Deductible Health Plans 

Dr. Fendrick, a health policy researcher, is also a physician who still sees patients.  He is not a fan of high deductible health plans, and referred to them during his task force presentation as a “tax on the sick”.  He has seen first-hand that his patients in HDHPs are increasingly skipping recommended screening tests.  They are afraid that if a health problem is found, they won’t be able to afford to treat it.   


Even a well–designed VBID program can’t protect people from the high cost of cancer treatment.  But VBID could be part of the mix of solutions for the HDHP task force to consider.   


The next meeting of the task force is Wednesday, December 18 at 11 pm at the Legislative Office Building in Hartford.  The focus of that meeting is expected to be a discussion of task force recommendations.   




Some more resources:  

  • Click here to watch the VBID presentation at the High Deductible Health Plan Task Force.
  • Tradeoffs, a health policy podcast sponsored by the University of Pennsylvania, just released an episode on VBID that features what Dr. Fendrick, called, “The Good Stuff”.  There is also an accompanying resource page. 
  • University of Michigan’s Center for Value-Based Insurance Design.   
  • Choosing Wisely is a program to promote high value care and reduce low value care by encouraging patient-clinician dialogue.  
  • To learn more about Connecticut’s Health Enhancement Program, go here.