Value-based insurance design: The insurance industry’s lingo for a system of carrots and sticks that rewards patients for undergoing medical procedures with a good track record of success (think flu vaccines and hypertension treatment) and penalizes them for treatment of questionable value (hip-replacement surgery and many kinds of high-tech imaging, for example).
The scheme relies on variable co-pays and deductibles; lower to reward patients, higher to penalize them.
Advocates say value-based insurance design steers patients to the most effective treatments, which helps improve outcomes and reduce the overall cost of care. In 2010, Oregon moved 275,000 state employees and dependents to a value-based plan in which employees pay $500 more per year if they elect less effective treatments. Result: Premiums, which had been rising 7% per year, last year fell by 0.5%.
Opponents say value-based plans prevent patients from getting needed care. Many lower metal-level plans spawned by the Affordable Care Act feature value-based insurance design.