Care with members in mind
The benefits of the VBID model for members
February 12, 2021

In a recent America’s Health Insurance Plans (AHIP) webinar, Dr. Mark Fendrick, VBID Center and School of Public Health at the University of Michigan, teamed up with Dr. Mark Atalla—Centers for Medicare and Medicaid Services—and Wellth CEO Matt Loper to discuss the VBID model, its growth, and how plans can use it to better support their members.

We’ll be highlighting key points and statistics shared during the webinar. Click
here to watch the full, one-hour webinar and Q&A. 

While most will agree that there is enough money being spent on the US health system, that money is often being spent on the wrong services. As health plans and government agencies continue to discuss better ways to allocate spending, one voice is often ignored: that of our patients and members.

The Value-Based Insurance Design (VBID) model has been designed with the consumer in mind, considering both member outcomes and cost in its design. 


To learn more about the VBID program, check our our recent article: VBID and Wellth

The high cost of healthcare

The cost of care has continued to rise for Americans, with premiums, deductibles, prescription drug costs, and more climbing steadily. 


As a result, Americans are becoming increasingly less concerned about aggregate health care costs, and more concerned about what their health care will cost them individually. 


This inflation of costs impacts not only members of commercial plans, but has extended to those enrolled in Medicaid and Medicare plans as well. 


As consumer out-of-pocket continues to rise, the average annual Medicare out-of-pocket spending now exceeds $5,000 a year. Furthermore, seniors on Medicare are being forced to make significant lifestyle changes to afford their care and prescription drugs. Last year, a survey of seniors enrolled in Medicare showed: 

  • 56% of seniors reduced spending on non-essential activities
  • 49% of seniors reduced spending on every-day purchases
  • 31% of seniors accrued credit card debt.

How VBID is improving things for members

The VBID model sets pricing on the clinical benefit—not the cost—of the service in hopes that members will receive better value for care received and lower their out-of-pocket costs for chronic condition care. Dr. Fendrick shared:

“As we move toward precision medicine, it’s important to make sure we also move toward precision payment and benefit design.” 


The VBID program is also significant and different from other value-based models in its emphasis on caring for chronic care conditions.

“Over 70% of the Medicare population has been diagnosed with one or more of the seven conditions targeted by the VBID program. The VBID program will enable payers and providers to design better coverage programs for a majority of their MA enrollees.”

-ICYMI: 6 Takeaways on Medicare Advantage Value-Based Insurance Design


While many value-based programs focus on the importance of preventative care, members enrolled in Medicare often face existing chronic conditions, which means a majority of spend goes toward managing those conditions—not preventing them. VBID is improving care for members while attempting to lower out-of-pocket costs for life-saving services and prescriptions—not just preventative care visits and check-ups. 

VBID: continued growth


The VBID model has continued to evolve and expand since its original introduction in 2015. Among those changes, Dr. Atalla highlights: 

  • High value services
  • High-value providers
  • Enrollees participating in disease management or related programs
  • Additional supplemental benefits

In addition, the model has expanded its target audience by chronic condition and by socio-economic status to better serve a larger population through offerings like hospice, supplemental benefits, telehealth, and more. He shares:

“VBID today is designed to make core high-value services accessible to Medicare and Medicaid beneficiaries that may have social determinants that are impacting their health today and tomorrow.”

Those benefits include approving reward and incentive programs like Wellth that help improve outcomes through better care plan adherence with behavioral economics.

CMS direction on rewards and benefit programs


“CMS will consider program designs that build on behavioral economic research, such as providing an entire reward upfront and requiring an action to keep the reward.”


As we continue to move toward a more value-based healthcare system, health plans that work with models like VBID will be able to see short and long-term gains and increase competitive advantage with more services available, better disease management strategies, and improved Stars performance. 


To learn more about succeeding in the VBID model with Wellth, check out our downloadable one-pager: VBID and Wellth.