ANN ARBOR, Mich. Like a one-size-fits-all shirt that doesn't fit anyone very well, American health insurance plans charge every person the same out of pocket cost for medical services regardless of their effect on a person's health.
So, whether your visit to the doctor is for life-threatening cancer, or just the common cold or a sprained ankle, you'll pay the same co-pay or deductible. These cash costs set by your employer and your insurance plan are designed to keep you from using "too much" health care.
But what if those out-of-pocket costs are high enough to keep your co-worker from taking a medicine that could greatly reduce her risk of having a heart attack, or to keep her from refilling a prescription that could prevent her child's asthma attacks?
American employers and citizens could get a lot more value out of their health insurance by abandoning the old-fashioned system of charging everyone the same, says a team of University of Michigan and Harvard University researchers in a new paper published online today in the journal Health Affairs.
Instead, companies should tailor their plans so that people who can get the most benefit out of a particular drug or screening test will actually pay the least for it. By doing so, companies might not only get more for their money, they might even save money in the long run by helping their employees prevent expensive health crises.
This approach, called value based insurance design or VBID, was first described by U-M professor of internal medicine and public health A. Mark Fendrick, M.D., and former U-M public health professor Michael Chernew, Ph.D., now a health care policy professor at Harvard. Together, they formed the U-M Center for Value Based Insurance Design.
Under their approach, a person with diabetes would pay little for drugs that can delay diabetes-related health problems, and for eye and blood tests that can spot those problems early. An
Contact: Kara Gavin
University of Michigan Health System