VBID in Action: Connecticut Health Enhancement Plan

Since its inception in 2005, the University of Michigan Center for Value-Based Insurance Design (V-BID) has led efforts to promote the development, implementation, and evaluation of innovative health benefit designs balancing cost and quality. A multidisciplinary team of faculty, including A. Mark Fendrick, MD and Michael E. Chernew, PhD, who first published and named the VBID concept, have guided this approach from early principles to widespread adoption in the private and public sectors. The Center has played a key role in the inclusion of VBID in national healthcare reform legislation, as well as in numerous state initiatives. The basic VBID premise is to align patients’ out-of-pocket costs, such as copayments, with the value obtained from health services and providers.
When Connecticut was facing a projected budget gap of $3.8 billion, the governor's office and a coalition of unions considered how to make changes to the state health plan in order to mitigate the shortfall.
This article was collaboratively written by A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design (V-BID), and several V-BID Center staff. 
In fiscal year 2012, the State of Connecticut faced a projected budget gap of $3.8 billion. The governor’s office and a coalition of unions representing state employees considered a wide range of options to mitigate this shortfall, including changes to the state health plan covering active and retired state employees. The parties focused healthcare discussions on methods to improve health as a means to control long-term costs. This led to the October 2011 launch of an uncommonly innovative initiative—the Connecticut Health Enhancement Program (HEP).
HEP is designed to incorporate the principles of value-based insurance design (VBID). This entails: 1) reducing financial barriers that deter use of evidence-based services and high-performing providers; and 2) imposing disincentives that discourage use of low-value care. By eliminating barriers to specified clinical services based on beneficiary demographics and medical history, payers, purchasers, taxpayers, and consumers can attain more health for every dollar spent.
To learn more about the Connecticut Health Enhancement Plan, view the infographic below, and read the issue brief and 2015 update on the V-BID Center website.

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