Value-based insurance design

UMMS Affiliation

Department of Quantitative Health Sciences

Publication Date


Document Type



*Cost Sharing; Cost-Benefit Analysis; Federal Government; Health Expenditures; Humans; Insurance Benefits; Insurance Claim Review; *Insurance, Health; National Health Insurance, United States; Organizational Innovation; Private Sector; United States; *Universal Coverage


Biostatistics | Epidemiology | Health Services Research


When everyone is required to pay the same out-of-pocket amount for health care services whose benefits depend on patient characteristics, there is enormous potential for both under- and overuse. Unlike most current health plan designs, Value-Based Insurance Design (VBID) explicitly acknowledges and responds to patient heterogeneity. It encourages the use of services when the clinical benefits exceed the cost and likewise discourages the use of services when the benefits do not justify the cost. This paper makes the case for VBID and outlines current VBID initiatives in the private sector as well as barriers to further adoption.

DOI of Published Version



Health Aff (Millwood). 2007 Mar-Apr;26(2):w195-203. Epub 2007 Jan 30. Link to article on publisher's site

Journal/Book/Conference Title

Health affairs (Project Hope)

PubMed ID


Related Resources

Link to Article in PubMed