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Financial Incentives Raise VBID Program Stakes

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Given the business community’s awareness that more than 70% of all health care costs are due to lifestyle choices, it’s understandable that we have seen dramatic growth in value-based insurance design (VBID) programs over the past two years. 

VBID programs are taking a bite out of the cost for four health conditions — cardiovascular disease, cancer, diabetes and obesity — that account for about three-quarters of the United States’ health care costs.

Certainly, the initial wellness program efforts, including gym memberships, weight loss programs and health education initiatives, have had some success at moving the needle. But they have yet to demonstrate an overall change in employee behavior.

A newer approach focuses on reducing health care costs by integrating financial incentives into the plan’s design to encourage employees to use preventive services, follow recommended treatment plans and adopt healthy behaviors.  

Employers have the flexibility to design programs that best meet the health needs of their organizations. 

Some employers may design programs around a prevalent chronic condition, such as diabetes, and use cash incentives to encourage adherence to condition-specific treatment plans; others may focus solely on encouraging prevention and use enhanced benefits to encourage participation in wellness examinations and diagnostic testing.

These VBID programs actually enable employers to offer health benefits focused on getting more health for the health care dollar by making high-valued services more accessible and more affordable. 

Efforts to encourage employees to spend more on screening programs may seem to conflict with the goal of controlling costs, but that’s because promoting early detection is a fundamentally different approach to health care than the traditional approach.

Health insurance has typically been designed around “sick care” versus “health care”.

Aggressive screening programs can make a big difference, the cost of treating late-stage diseases is often much higher than treating the early-stage versions of the same conditions.

Early detection of cervical cancer, breast cancer, prostate cancer and colon cancer can also help save lives and increase employee productivity.

Health plans built around offering financial incentives for early detection are replacing the old cyclical process of treating health issues after they have already become problems.  We are witnessing the early stages of a new approach that works for both employees and employers.