Assigning the right value to value-based insurance design

Does value-based insurance design (VBID) work? Hear what an expert thinks.

March 29, 2018

Value-based benefit design (VBID) lowers or eliminates out-of-pocket costs for drugs known to improve medical outcomes. It might take the form of any of these:

  • Zero dollar copays for select medicines
  • Lower dollar copays for select medicines
  • Greater supplies of select medicines

(For policy papers and infographics about value based insurance design, go to

Looking at VBID applied to diabetes

You can find a lot of studies about VBID applied to diabetes populations. Unfortunately, some of it is unrealistic. Incenting adherence is great. Lowering out-of-pocket costs for consumers is important, too. But be wary of studies that show savings from medical event reduction in one or two years. It takes five to ten years, and even longer.

As a pharmacist and a scientist, I’m both optimistic and skeptical. I’m optimistic about the potential of a well-designed benefit plan that can motivate and support healthy behaviors. I’m skeptical of one- and two-year studies that show results not supportable by the best literature.

I prefer to set realistic expectations. And helping our members get the medicine they need to feel better and live well within a sustainable health care system.

Average annual health care costs5

It’s number one

Diabetes has grown quickly to become the number one cost driver of health care costs in the country. It affects about 30 million Americans1 and consumes about 20 percent of our health care spending. The drugs in this category have high inflation rates. New drug combinations launch every year with brand-name prices.

Diabetes is often accompanied by coexisting conditions like high blood pressure, high cholesterol, heart disease and obesity. When people with diabetes control their glucose levels consistently, it helps them avoid developing longer term issues with:2

  • Kidneys (nephropathy)
  • Limbs and circulation (neuropathy)
  • Heart and brain (cardiovascular)
  • Eyes (retinopathy)

But someone can live with glucose levels that are not well controlled and live a relatively symptom-free life in the short term, not realizing what long-term damage might be occurring systemically.

Many studies were published out of the U.K. in the 1980s and 1990s that followed people with diabetes for 20 years. It took more than 10 years into the studies – 10 years of of well-controlled glucose levels before these studies started to show that cardiac events had been averted.2

Other studies since then have shown results more quickly, still, it took three or more years. And those included study subjects who already had heart problems. That research is much less applicable to a general population.3

The results you should expect from a VBID study

Long term results: From the UK randomized controlled trials, we know that improved diabetes glucose control will decrease medical costs and events — but not for 10+ years. In fact, in the short term, improved diabetes glucose control will increase expenses, because of increased medication use costs.7

Improved adherence: Lower member out-of-pocket costs can improve adherence from 0 to 4 points. This may also encourage untreated members with diabetes to begin treatment.4, 5, 6, 7

Ways to manage cost in the meantime

Formulary exclusions can help curb increase in costs. Prime’s NetResults formulary helped Prime achieve a 55 percent decrease in net trend in diabetes.8

Because members with diabetes are at higher risk for heart disease, Prime recommends VBID strategies that provide free or reduced-cost statins or ACE/ARBs to members with diabetes. These have helped show improvements in overall cost of care, because the vast majority are available as generics.9-13

Stay the course

Several of Prime’s Blue Plan clients use a VBID strategy for members with diabetes.3 They continue to do so, despite not yet seeing a medical event reduction to date. They understand the clinical studies and the importance of the long-term commitment. We’ll all be here in just a few more years when the total cost of care savings starts to become evident.

In the meantime, what we know about integrated medical and pharmacy management has helped contain the growth of our clients’ diabetes drug trend.8


  1. “Overall statistics about diabetes.” American Diabetes Association. Copyright 1995-2017. American Diabetes Association. All rights reserved. Accessed at:
  2. The Diabetes Control and Complications Trial/Epidemiology of Diabetes Interventions and Complications Study at 30 Years: Overview. Accessed August 1, 2017.
  3. Bowen K, Vaughn M, Gleason PP. Zero Dollar Diabetes Drug Coverage: Impact on Utilization, Costs and Adherence. JMCP 2017:23(3-a):S44 Accessed August 1, 2017.
  4. Peaslee A, et al. Impact of a Combined Value-Based Insurance Design and Medication Therapy Management Program on Diabetes Medication Adherence. JMCP 2016;22(11):1303-09. Accessed August 1, 2017.
  5. Bowen K, Gleason PP. Total 2014 and 2015 Claims Expense by Drug, Diagnosis and Procedure Codes: 250,000 Commercially Insured Members with Diabetes Compared with 1,000,000 Matched Members without Diabetes. AMCP. Spring 2017. Accessed on October 30, 2017.
  6. Maciejewski ML, et al. Copayment reductions generate greater medication adherence in targeted patients. Health Affairs 2010;29(11):2002-2008. Accessed August 1, 2017.
  7. Bowen K, Mishler K, House A, Gleason PP. Is A Diabetes Value Based Insurance Design Associated With Lower Costs? AMCP, October 2017, Dallas, TX. Accessed October 23, 2017.
  8. Comparing 2017 mid-year trend to mid-year trend for 2016. Prime Therapeutics. Fall 2017 Mid-Year Update. Stone, N.J. et al. 20013 ACC/AHA guideline on the treatment of blood cholesterol to reduce Atherosclerotic cardiovascular risk in adults. Circulation (2014):129*25) (suppl2):S1-S45.
  9. Prime Therapeutics. (2015, July 21). As high-cost cholesterol drugs loom, study finds statins underused. Accessed on October 30, 2017.
  10. Bowen K, Gleason, PP. Any statin use among commercially insured members with diabetes age 40 to 64 without history of atherosclerotic cardiovascular disease (ASCVD) and association between adherence to statin therapy in 2014 and adverse cardiovascular events in 2015. AMCP. March 2017. Accessed at:
  11. Choudhry NK, Avorn J, Glynn RJ, Antman EM, Schneeweiss S, Toscano M, Reisman L, Fernandes J, Spettell C, Lee JL, Levin R, Brennan T, Shrank WH, Post-Myocardial Infarction Free Rx Event and Economic Evaluation (MI FREEE) Trial. N Engl J Med. 2011 Dec 1; 365(22):2088-97.
  12. Stecker, E. C., Ayanian, J. Z., & Fendrick, A. M. (2015). Value-based insurance design: aligning incentives to improve cardiovascular care. Circulation, 132(16), 1580–1585.
Zero Dollar Diabetes Drug Coverage: Impact on Utilization, Costs and Adherence (Spring 2017)

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