Newswise — ANN ARBOR, Mich. — A new bill introduced in Congress with bipartisan support would allow Medicare to test a concept born from University of Michigan research, which could improve the health of patients with chronic illness while reducing what they spend on the medicines and tests they need most.

The bill, introduced last week by U.S. Reps. Diane Black and Earl Blumenauer, grew out of a decade of work by health policy researchers affiliated with the U-M’s Institute for Healthcare Policy and Innovation. It would allow Medicare Advantage plans to use innovative “value-based” insurance designs that could save both the federal government and patients money.

It’s the most recent example of how the products of U-M health research are informing national and state policies and legislation – a key emphasis for the university’s Institute for Healthcare Policy and Innovation.

The bill, H.R. 5183, even carries the U-M-developed concept in its name: the Value-Based Insurance Design (VBID) for Better Care Act of 2014. The sponsors specifically credit the U-M V-BID Center for the policy work that underpins their proposal.

The V-BID Center’s faculty and staff, based in the U-M School of Public Health and Medical School, have also worked with numerous private and public payers, employers, unions, and business coalitions nationwide. Together, they’ve proven a central V-BID premise: that reducing out-of-pocket costs for selected high-value medical services for certain patients can improve health outcomes, reduce disparities and potentially slow the growth of health care costs.

For instance, Pitney Bowes, a Fortune 500 company, saved $1 million in employee health costs in one year, when complication rates for asthma and diabetes dropped after the company lowered the out-of-pocket cost of medications. In some states, public health plans have adopted V-BID principles.

The new bill would allow the Centers for Medicare and Medicaid Services to establish a regional demonstration program for high-quality Medicare Advantage plans to use value-based design in their insurance coverage. More details:

The V-BID Center’s faculty are among the 400 U-M researchers who study health care delivery, safety, outcomes and behavior as part of the U-M Institute for Healthcare Policy and Innovation. As its name suggests, one of the institute’s key goals is to foster the ability of U-M research to inform all aspects of public health care policy on the state and national level. For more about IHPI, visit

For more about the V-BID Center, its research, and examples of public and private health care organizations that have endorsed or implemented the V-BID concept, visit # #

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