R.I.P. VBID? (Part 2)

A 'renewed call to action to address affordability' leaves all options on the table.

Per the University of Michigan Value-Based Insurance Design Center, VBID aims to lower or remove "financial barriers to essential, high-value clinical services" (e.g., increased use of preventive and essential chronic care. It also seeks to decrease spending on low-value services that provide "little or no benefit to patients, have potential to cause harm, incur unnecessary cost to patients, or waste limited healthcare resources" (e.g., prescribing branded drugs over available generics).

As noted in Part I of this series, VBID improved outcomes but cost CMS $4.5 billion in model years 2021 and 2022. But for those ready to write the model off, consider these 2025 statistics:

• 67% of Americans are concerned about healthcare affordability — a 10% jump from 2024 (Pew Research Center)
• medical costs that are the highest in 13 years per PwC, which further cited . . .
• an 8% spike in group insurance medical spend

In an environment where healthcare costs present considerable risk, can any option be taken off the table? Part II summarizes how the VBID model could succeed, the MA model lessons learned, and why value-based care in general must somehow achieve the impossible.

'Not to save money'

A Health Affairs post-mortem notes that CMS’s termination of the MA model "should be interpreted as an assessment of the specific design of this program as opposed to a conclusion about the general cost (or potential) of VBID as a concept."

"The primary goals of V-BID programs in general, and the MA-VBID model specifically, are to increase access to care, enhance equity, and ultimately improve the health of Medicare beneficiaries – not to save money."

Did we misunderstand what VBID was supposed to accomplish — perhaps value-based care (VBC) in general — or do we need to accept that improving both cost and quality is nearly impossible? How can we, given unabated healthcare inflation?

How VBID can succeed — and more reasons it didn’t in MA

Health Affairs adds that VBID has demonstrated its ability to "increase adherence to high-value services, reduce disparities, improve patient outcomes, and in some instances decrease expenditures. The latter is where VBID failed spectacularly in MA, due to the risk adjustment and rebate payment spikes mentioned in Part I of this series — and three other reasons:

1. The use of more high-value services (i.e., more good things still increase spending)
2. The lack of specific deterrents for low-value services (e.g., payment/benefit design changes)
3. Uncounted downstream savings due to a short evaluation period (e.g., lower long-term disease management costs)

"Instead," note the authors from U of M and its VBID Center, "assessments of whether the gains in health achieved are worth the additional money spent should be conducted on the same level playing field as other health care interventions."

MA lessons learned and those 2030 goals

VBID’s failure in MA did create some successes and lessons learned. Health Affairs notes that

MA plans can now offer many of VBID’s supplemental benefits more broadly (e.g., Special Supplemental Benefits for the Chronically Ill, or SSBCI).

CMS’s press release on VBID’s MA termination cited lessons that will inform "broader MA program policies, including strategies to improve:

• population health outcomes and health equity through the continued screening of health-related social needs linked to supplemental benefits
• understanding of benefit use through better data collection and reporting
• medication adherence through reduced Part D cost sharing

These lessons learned and continued strategies will be important for CMS to meet its goal of having all Medicare beneficiaries in a value-based arrangement by 2030.

Can value-based care be an either/or proposition?

Value-based care has been the unattained gold standard in healthcare for more than a decade. But expecting it to deliver like the consumer electronics industry — innovation that makes products better and cheaper — has proven unrealistic.

The Health Affairs post-mortem for MA VBID MA noted: "There are practically no health programs or clinical services — including almost all health quality metrics — that save both lives and money."

Improving outcomes while lowering costs may be notoriously difficult to do. But with rising inflation and sinking consumer confidence, does the industry have a choice left but to try?