New Acronym, Huge Impact: VBID

Value-based insurance design (VBID) initiatives are starting to focus on surgery—especially procedures that fall into the “low value” bracket, like hysterectomies and low-back surgery. VBID was originally developed to remove financial barriers to obtaining drugs prescribed for certain chronic conditions. Some insurers are now requiring a second opinion from a surgeon before these procedures will be reimbursed. The point is to ensure insureds receive only evidence-based medical care. An article in Business Insurance describes VBID’s history and emerging applications.

VBID originated in Asheville, North Carolina, in 1997. The city reduced copayments for employees with diabetes who agreed to participate in an intensive pharmacist-directed disease management program that promoted self-management. At 5 years, overall cost reductions were 58% lower than expected. Many large self-funded employers adopted VBIDs.

The National Business Group on Health in Washington is advancing the model by implementing financial disincentives to discourage the use of low-value services. They work in conjunction with the Choosing Wisely Campaign, an initiative of the American Board of Internal Medicine supported by a Consumer Reports study that focuses on the use of evidence-based medicine.

NBGH’s program allows members to access tools and information about evidence-based care. In turn, employers use financial incentives to direct employees toward higher-value care and disincentives to move employees away from lower-value care using.

The 2010 Patient Protection and ACA also shifts focus from volume-based medicine to value-based medicine. This has changed Medicare funding to hospitals. The Center for Medicare and Medicaid Services’ (CMS) program will tie the payment to hospitals and surgeons to patients’ experiences and service quality. Surgery-specific rules and additional rules addressing post-surgical infection have not been completely implemented but are in the works.