RWJF Content Alert - Designing Insurance for Value

Publication Date: 
April 13, 2010

New Paper in the American Journal of Managed Care Explores Value-Based Insurance Design

Value-based insurance design (VBID) has attracted favorable attention from policymakers, academics and the media since it was proposed almost a decade ago. VBID, at a fundamental level, is the practice of tailoring health insurance programs to encourage high-value health care services while at the same time discouraging low-value care.

In “Low-Value Services in Value-Based Insurance Design,” authors Peter J. Neumann, Hannah R. Auerbach, Joshua T. Cohen and Dan Greenberg explore challenges in identifying low-value services and in incorporating such information into VBID programs. The authors argue that to fulfill VBID’s promise of improving value and moderating cost growth, these programs should target low-value as well as high-value care. They also assert that:

  • Labeling any medical technology or service as “low value” is not straightforward.
  • Programs should be designed around a broad set of services, including medical management instead of surgery.
  • Targeting low-value services presents political challenges because it involves providing disincentives for care that may offer some health benefits.

The paper, commissioned by the Robert Wood Johnson’s Changes in Health Care Financing and Organization (HCFO) initiative, comes as a part of their Benefit Design Health Reform Work Group.

Read the article.