What is Value Based Health Insurance?

Value-based health care insurance (VBHI) is a new approach to health insurance plans that focuses on rewarding quality care and positive health outcomes, rather than simply paying for medical services rendered. Here's a breakdown:

Core Concept:

Unlike traditional fee-for-service plans where providers get paid per procedure, VBHI financially incentivizes doctors, hospitals, and other healthcare providers based on:

  • Quality of care: This includes factors like patient satisfaction, preventive care measures, and successful treatment of chronic conditions.
  • Cost efficiency: Delivering effective care without unnecessary procedures or tests.
  • Patient experience: Making sure patients have a positive interaction with the healthcare system.


  • For patients: Potentially better care coordination, focus on preventive health, and improved overall health outcomes. You might also see incentives for healthy behaviors.
  • For providers: Rewards for delivering high-quality care efficiently. This can encourage collaboration and innovation in healthcare delivery.
  • For the healthcare system: Potential cost savings by reducing unnecessary treatments and improving health outcomes.

How it Works:

There are different VBHI models, but some common features include:

  • Value-based payments: Providers receive bundled payments for episodes of care (e.g., managing a chronic condition) rather than per service.
  • Performance metrics: These track quality, cost, and patient experience.
  • Shared risk/reward: In some models, providers may share in the savings if costs are lower than expected.

VBHI is Still Evolving:

While it's gaining traction, VBHI is still a developing concept. Here are some things to keep in mind:

  • Availability of VBHI plans may vary depending on your insurer and location.
  • The specific features and incentives of VBHI plans can differ.
  • The long-term impact of VBHI on healthcare costs and quality is still being evaluated.