After 20 Years of VBID Discussion, Low-Hanging Fruit Remain Unpicked

Twenty years after the initial discussions of value-based insurance design (VBID), which at its core aims to foster the use of high-value health care services while minimizing the utilization of low-value services, there is still plenty of work to be done. And in the coming years, new and evolving challenges must be overcome to integrate VBID broadly into the health care system.

In a session centered on the progress made in VBID at the 20th annual Value-Based Insurance Design Summit, moderator Cliff Goodman, PhD, senior vice president at health care policy consulting firm The Lewin Group, was joined by panelists David Mirkin, MD, a principal, health care management consultant, and chief medical officer for Milliman MedInsight; Jason Spangler, MD, president and CEO of the Center for Innovation & Value Research; and Alan Weil, JD, senior vice president of public policy and director of the AARP Public Policy Institute and former editor in chief of Health Affairs. Goodman and Mirkin are members of the editorial board of The American Journal of Managed Care^®.

Although the gap between low and high value has been established in many areas, insurance design has yet to adapt. | Image credit: onephoto - stock.adobe.com

The discussion kicked off with panelists sharing their thoughts on the goals of VBID at its inception 2 decades ago. Mirkin accomplished his main goal, he said, which was to share the message that no one would take VBID seriously if all it did was decrease costs by reducing cost sharing for high-value services. The key to making headway is having some sort of actuarial equivalency, he explained.

“If you're going to reduce barriers for things that people should get and reduce costs—which would basically raise the total cost for providing those services—if you're an insurance company or a government, you need to find some offsetting service that is low value that you want to minimize spending on,” Mirkin said. While the idea of reducing co-pays and cost sharing for high-value services was already well-established by VBID at the time, from a practical standpoint, outlining how it could serve the interests of payers in tandem was an important achievement, he said.

For Weil’s part, he credited the VBID movement with fostering discussion around the typical instruments of insurance design and why they do not promote health.

“I always look at these things in terms of the stream of the discussion,” Weil said. “Just think about Choosing Wisely. Think about the move to value-based purchasing, which is much bigger than VBID, being clear about the fact that the blunt tools like co-payments and deductibles are completely inefficient if you're trying to promote health. I think the VBID movement established that with clarity.”

A notable limitation, he added, is that there is low-hanging fruit yet to be picked. Although the gap between low and high value has been established in many areas, insurance design has yet to adapt. Still, the discussion has moved forward in the 20 years since it began.

Spangler agreed that the VBID discussion has broadened awareness of shortcomings in the health care system. At the time of VBID’s inception, the system was entirely based on volume. In the time since, he said, there have been accomplishments like eliminating cost sharing for preventive services with the Affordable Care Act and awareness of low-value care.

In the health care system overall and among insurers, however, Spangler reiterated Weil’s point that there has not been as much progress as there should have been by now. It has changed in bits and pieces, but not comprehensively—which is a very difficult thing to do, he noted. The goal may have been to change benefit design across the board, but there are substantial challenges, including determining how value is defined. Different stakeholders define value differently, and there are also questions around the definition of value in individual-based care vs population-based care.

“I would say there was a small idea of, ‘Maybe we could change some of benefit design,’” Spangler said. “I think the grand idea was, ‘Let's change benefit design in general,’ and I think we've moved closer to that. But it I would say where we are now compared to 20 years ago, it will probably take another 20-plus years to get to where we want to be, if we can do that.”

Goodman pointed out that unanticipated events, such as the COVID-19 pandemic, forced shifts in the health care system and highlighted the value of services like vaccines and antiviral treatment. He passed the baton to Weil to discuss the context around VBID now vs at its inception.

“I think that there has been a dramatic evolution in how people think about value,” Weil said. “And I would say there's now significant controversy over the definition of value. The shorthand is quality over price, but that's way too short… and I think we're really stuck in a place where there is this notion among the plans—whose primary audience is the providers—that they just need better data and more personalized VBID.” He added that there is a strong evidence base for things like centers of excellence and reference pricing, but that we don’t deploy those methods.

The panelists agreed that the patient, family, and caregiver perspectives are crucial for determining value. Spangler noted that especially with the goal of a patient-centered health care system, the patient and caregiver perspectives are important. Providers are also key players who want the best outcomes for patients. But no matter the stakeholder, their idea of value cannot be determined without first talking to them and accounting for their viewpoints.

Mirkin emphasized the importance of quantifying waste, noting that tools like the Health Waste Calculator can help with this endeavor and come up with initiatives to address it. But the elephant in the room, he said, is that health care is simply too expensive—and everyone has a financial interest in it. Patients want to pay less, and providers are driven both by striving for optimal patient outcomes and being paid well for it. Payers, meanwhile, want to manage budgets.

“I think we're going to have problems moving ahead with VBID because, while there certainly are a lot of services that are high value—and I think it makes sense to consider whether we can reduce or eliminate cost barriers for patients receiving those—we're going to be limited in being able to expand that unless we can find somewhere else where we have low-value services that we can do something about,” Mirkin said. “And ignoring that is just going to keep us treading water.”

Weil agreed that the easier aspect of VBID is identifying high-value things that should have cost-sharing requirements reduced or coverage increased. The challenge is pinpointing low-value care that should have increased cost sharing or reduced coverage.

Another major challenge, Spangler explained, is that advancing VBID inherently would move money around in the system, and certain stakeholders will get more while others get less. He sees this issue growing as the current administration is likely to take money out of the system rather than put more into it. VBID also requires making decisions based on evidence.

“I see a lot of anti-evidence sentiment coming from the administration about certain things where they're promoting certain things and there's not evidence for that, and we're moving away from things where there is evidence,” Spangler said, “and I think that could hurt VBID, definitely, if we start moving towards things that there's not good evidence for.” While advancing VBID is a challenge regardless, he cautioned against the move toward promoting or incentivizing aspects of health care where there is not good evidence.

Spangler also noted that while some services, especially preventative care, do not improve costs, they can improve long-term health in a valuable way and foster health care utilization of things that are more high value than low value.

As for the future of VBID, the panelists agreed that staying true to its roots is crucial. The movement is about benefit design, promoting high value, and discouraging low value, Spangler reiterated.

“I would just encourage the VBID folks—which I think they've done a great job so far—to continue and don't be discouraged because of the current political environment,” Spangler said. “Things could change, but continue to promote what is important, depending on the political environment, to advance the movement further.”

Mirkin agreed, adding that despite inevitable challenges, the discussion should not be given up. And Weil circled back to emphasize the core values embedded in VBID.

“VBID is at the intersection of how the plan design affects the patient's choice and the payment to the provider, and you've got to think of that as a triangle, and all 3 of those relationships—plan to clinician, plan to patient, clinician to patient—they're all in flux,” Weil said. “Successful VBID requires monitoring and responding to changes in all 3 of those relationships.”