Reducing Discrimination


Review of Evidence that Value-based Insurance Can Be Effectt

Review of Evidence that Value-based Insurance Can Be Effective


      Chernew, M. E., Juster, I. A., Shah, M., Wegh, A., Rosenberg, S., Rosen, A. B., Sokol, M. C., Yu-Isenberg, K., & Fendrick A. M. (2010).   Evidence that Value-based Insurance Can Be Effective.  Health Affairs, Web Exclusive. January 2010. Retrieved November 18, 2010, from

      More and more organizations struggling to compete in this economic uncertainty, rising costs, and market volatility find themselves having to rethink their employee compensation and benefit strategies.   In many cases, those efforts have led to layoffs, lower starting pay levels, pay cuts, reduction in benefits, or even increases in cost sharing of health benefits—that is, employees are now being required to assume a greater responsibility for their healthcare costs.     In fact, according to Bohlander & Snell (2010), employee contribution for medical coverage was up by more than 70 percent from 2000 to 20006 (p. 499).   Nevertheless, organizations understand the value of healthcare is not exclusively financial, so employers continue to search for alternative solutions to affordable healthcare for their employees (Chernew, et al., 2010).     One such alternative touted for its potential cost-saving results is Value-Based Insurance Design (VBID).   This article examines the financial implications of a value-based insurance design program.

      The authors begin by explaining the concept of VBID and its growing popularity among employers, the media, and policymakers—as evidenced by its inclusion in the recent federal health reform legislation—for balancing costs and improving the overall the quality of healthcare.   Further adding, the momentum for implementing such programs may also stem from the awareness that the different...