University of Michigan Center for Value-Based Insurance Design

The University of Michigan Center for Value-Based Insurance Design (V-BID Center) leads in research, development, and advocacy for innovative health benefit plans. A multidisciplinary team of faculty, including A. Mark Fendrick, M.D., Dean Smith, Ph.D, and Michael Chernew, Ph.D, first published and named the V-BID concept, and have guided this approach from early principles to widespread adoption in the private and public sectors. The idea began in a local Ann Arbor, Michigan restaurant when the team of faculty realized that a new, “clinically sensitive” approach to health care would be to align patients’ out-of-pocket costs, such as copays and premiums, with the value of health services. By reducing barriers to high-value treatments (through lower costs to patients) and discouraging low-value treatments, these benefit design plans can achieve improved health outcomes at any level of health care expenditure. V-BID has been recognized as an important public policy measure for balancing costs and quality in health care at the local, state, and federal level. On June 17th, 2015 the U.S. House of Representatives passed The Strengthening Medicare Advantage through Innovation and Transparency for Seniors Act of 2015 with bipartisan support. The bill includes a V-BID demonstration project that would allow Medicare Advantage plans to lower copayments and coinsurance for their beneficiaries and would encourage the use of high-value, evidence based medical services to better manage chronic conditions. A companion bill, Value-Based Insurance Design Seniors Copayment Reduction Act of 2015, was introduced to the Senate in May 2015. V-BID initiatives aim to improve various sectors of health care to ensure that every American can enroll in a V-BID plan. Our initiatives include High Deductible Health Plans, Medicare/Medicare Advantage, Specialty Pharmaceuticals, State Medicaid Plans, and State Employee Health Plans. To learn more visit our website at vbidcenter.org.