Thought Leaders’ Corner: Value-Based Insurance Design

Value-based insurance design, which seeks to provide coverage and incentives for consumers to engage in healthier behaviors, is a necessary but not sufficient element of the transformation of the U.S. healthcare system from one featuring high costs, uneven quality and a population less healthy than it should be to a system providing better health, better care and lower costs. The methods by which we pay for and deliver care also must become value-based. And, perhaps most importantly, the entire system needs to shift its focus to the interconnection between the social needs and the medical needs of the population.

The American Health Care Paradox[1] points out that the United states has the lowest ratio of social to health services expenditures of any developed nation. In Caring for Vulnerable Populations,[2] the American Hospital Association makes the following recommendations: Hospitals should develop community partnerships with public health agencies; providers should make regular comprehensive assessments of each individual's life circumstances; and providers should adopt cultural competency and equity of care standards.

In Time to Act,[3] the Robert Wood Johnson Foundation makes similar recommendations: Invest in early childhood development for all children; revitalize neighborhoods and fully integrate health into community development; and incent healthcare professionals and institutions to broaden their missions from treating illness only to helping people lead healthy lives.

Value-based insurance design can help in this transformation by engaging all of us in the process of staying healthier longer, along with value-based payments that encourage providers to keep us healthy rather than only treat us when we are sick, and delivery systems that do a good job of coordinating care. But a broader effort to maintain and improve the health of families, neighborhoods and communities will be essential as well.

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