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An Overview of Value-Based Benefits

In its essence, Value-Based Benefits (VBB, sometimes referred to as Value-Based Insurance Design or VBID), is similar to CDH in that it offers financial incentives to motivate consumers to seek more effective care. VBB plans may also feature disincentives designed to maximize usage of high-value care and minimize consumption of more costly, less effective care.

An effective VBB design may feature variable copays for services, based on the relative financial and clinical value that the care provides to the consumer. For instance, if a health plan hopes to increase compliance among diabetic patients, it might reduce or eliminate any cost-sharing for supplies and medications considered mandatory and cost-effective for good health. Alternatively, the plan might increase cost-sharing for services deemed to offer little relative value for maintaining good health. A cost-benefit analysis is required to determine the optimum cost-sharing arrangement for a particular service based on the efficacy and costs of various alternatives.

Driving interest in VBB/VBID plans is the Affordable Care Act, which empowers the Secretary of Health and Human Services to “develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.”

Successful Program Components

At Acero, our view is that the ideal VBB plan design is based on incentivizing the most effective care using evidence-based medicine for consumers with specific conditions. The optimal plan would also take into account the providers, medications and timing of services necessary to ensure good health.

Administration of such a plan also benefits from providing effective incentives, along with health coaching, to encourage consumers to utilize the most appropriate providers for specific procedures or medications, at the optimal intervals. Ultimately, this approach requires a claims process that is dynamic and configurable at a discrete level to incorporate the considerations mentioned above along with a measurement of outcomes, consumer feedback and provider incentives.