Currently Viewing:
CMS Announces Transformative Updates to the MA VBID Model
February 18, 2019
Currently Reading
Review Finds VBID Programs Improved Adherence at No Added Cost
August 01, 2018
CMS Rule Creates More Flexibility for Value-Based Benefits in Medicare Advantage
May 25, 2018
High-Deductible Health Plans a Problem for Patients With Cancer
May 10, 2018
Including VBID Principles Can Avoid Negative Effects of Outcomes-Oriented Contracts
April 19, 2018
Legislative Actions Encourage Value in Medicare Advantage and High-Deductible Health Plans
February 23, 2018
Addressing Rising Cost Sharing With Precision Co-Pay Assistance
February 08, 2018
A Year of Value-Based Insurance Design: 2017 Highlights
January 15, 2018
Study Identifies Unexpected Contributor to Rising Health Costs: Low-Cost Services
December 27, 2017
CMS Expands MA VBID Model Test in 2019
December 08, 2017
CMS Proposed Rule Allows Greater Flexibility for VBID in Medicare Advantage
November 25, 2017
Identifying the Top 5 Low-Value Services That Can Be Targeted for Reduction
November 10, 2017
VBID in Action: Connecticut Health Enhancement Plan
March 26, 2017
Healthcare Stakeholders Call for Flexibility in HSA-HDHPs
March 12, 2017
2016 Year in Review: University of Michigan V-BID Center
February 02, 2017
VBID and Medicare Advantage: Achieving Bipartisan Support
November 30, 2016
Understanding Clinical Nuance
October 25, 2016
Implementing VBID in Medicare and Medicare Advantage
October 19, 2016
The Cost of Low-Value Care
October 11, 2016
Adventures in Healthcare: The Dawn of the High-Value Health Plan
October 04, 2016
Reward the Good Soldier: A Dynamic Approach to Consumer Cost-Sharing for Prescription Drugs
September 26, 2016

Review Finds VBID Programs Improved Adherence at No Added Cost

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.
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. 

A literature review in Health Affairs describing the impact of a value-based insurance design (VBID) model on medication adherence and overall cost found that VBID programs reduce consumer cost-sharing for clinically indicated medications and increased medication adherence at no net change in total spending. This suggests that increases in pharmaceutical spending by plans were offset by decreases in spending for other healthcare services, such as emergency department visits or hospital stays.

The review included studies that compared a traditional prescription drug plan with a VBID plan that reduced copayments or coinsurance rates for select high-value services, focusing on treatments for specified chronic diseases for which a generic medication option was available. The 796 studies included in the review, with very few exceptions, showed significant improvement in medication adherence for at least 1 drug class under a VBID model. Of the 9 studies that evaluated healthcare spending, all measured a decrease or no net change in total spending.

The authors, which included A. Mark Fendrick, MD, the co-editor-in-chief of The American Journal of Managed Care® and the director of the V-BID Center, noted that there are no published controlled studies on VBID programs that limit the use of low-value services through increased consumer cost-sharing. Reducing the use of low-value services would provide immediate and substantial savings, creating headroom to lower cost-sharing for high-value services. Thus, the authors predict that VBID that limits low-value care would ultimately save cost.

Most of the present literature on VBID focuses on its application to prescription drugs. However, there are limited data that report on healthcare quality and patient-centered outcomes. The researchers suggest that future studies on VBID focus on factors that further enhance medication adherence and downstream patient-centered outcomes, as well as address common clinical conditions such as mental health disorders, opioid abuse, and musculoskeletal conditions.


Agarwal R, Gupta A, Fendrick AM. Value-based insurance design improves medication adherence without an increase in total health care spending. Health Aff (Millwood). 2018;37(7):1057-1064. doi: 10.1377/hlthaff.2017.1633.

Copyright AJMC 2006-2020 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
Welcome the the new and improved, the premier managed market network. Tell us about yourself so that we can serve you better.
Sign Up