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 Smarter Consumer Cost Sharing Using Clinical Nuance  
The Harvard Business Review Insight Center features a blog on smarter “clinically nuanced” consumer cost-sharing by Drs. Mark Fendrick and John Ayanian,Directors of the University of Michigan Center for Value-Based Insurance Design and Institute for Healthcare Policy and Innovation.The Harvard Business Review Insight Center post recommends that the focus of the health care cost debate turn from how much to how well we spend our health care dollars.

To encourage this shift from volume to value, Fendrick and Ayanian contend that insurance benefits and payment models must be redesigned with the basic V-BID tenets of clinical nuance in mind. 

These tenets recognize that 1) medical services and providers differ in the amount of health produced, and 2) the clinical benefit derived from a specific service depends on the consumer using it, who provides it, and where it is delivered.

The post explores how “one-size-fits-all” increases in consumer cost-sharing can lead to decreases in the use of both essential and nonessential services.

To mitigate the negative health effects of cost-related lower utilization of evidence-based services, Fendrick and Ayanian advocate that payers utilize evidence-based recommendations and patient risk factors to structure cost-sharing.

By basing consumer cost-sharing on the clinical value – not the price – of services, payers can actively engage consumers to seek high-value care and foster more regular conversations with providers regarding low-value services.

V-BID programs that lower cost-sharing for targeted services have consistently demonstrated improved adherence with no net increases in aggregate expenditures when compared with plans without such clinically nuanced cost-sharing.

The University of Michigan Center for Value-Based Insurance Design leads in research, development, and advocacy for innovative health benefit plans.