EP308: At Least Two Surprising Insights About Value-Based Care, With Mark Fendrick, MD

In Episode 308, Stacey Richter talks with Mark Fendrick, MD, director of the University of Michigan Center for Value-Based Insurance Design, about two surprising insights into why value-based care so often fails to align incentives in the real world. WHAT YOU'LL LEARN ✅ Why doctors get dinged on quality scores when their patients can't afford the follow-up care they're told to get ✅ Why cost sharing in most benefit designs is based on how expensive a service is, not how valuable it is ✅ Why that mismatch pushes patients toward cheap care instead of high-value care ✅ What V-BID's core pillars are for redesigning benefits around value ✅ Why aligning patient and provider incentives — not just cutting costs — is the real goal of value-based insurance design WHY THIS MATTERS Dr. Mark Fendrick, who coined the term Value-Based Insurance Design, argues that value-based care breaks down for a simple reason: benefit design and quality incentives often work against each other. A doctor tells a diabetic patient to get an eye exam, the patient can't afford it because of a high deductible, and the doctor gets penalized on quality metrics for an outcome the benefit design itself caused. Meanwhile, most cost sharing is tied to how expensive a service is rather than how valuable it is — pushing patients toward cheap, low-value care and away from expensive, high-value care. Fixing that misalignment, not just cutting costs, is what V-BID is built to do. MENTIONED IN THIS EPISODE 🔗 Encore! EP176, with Dr. Robert Pearl === LINKS === 🔗 Show Notes with all mentioned links: Episode Page 🔗 Healthcare Industry Acronyms and Terms ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction. 03:53 Is back surgery high-value care? 04:46 If care is patient to patient, how is high-value care decided upon? 05:36 "Flintstones delivery: We have to move from the sledgehammer to the scalpel." 10:19 "Almost all of the services that we recommend to reduce cost sharing … do not save money." 11:36 "I didn't go to medical school to learn how to save people money." 16:14 "When a patient and their clinician agree … the patient should be able to get that [service] easily, and the clinician should be paid generously." 17:14 "When patients and providers are aligned, they do much better." 19:07 What services are deemed high value, and what services should be pre-deductible? 21:04 "Are primary care visits high value? … The answer is, it depends." 25:13 What are V-BID's core pillars to address value-based care? 27:24 How does Dr. Fendrick's method of value-based care and reimbursement actually enable better consumerism? 29:11 What do providers think about changing reimbursement on low-value and high-value care? 30:21 "We have incentives that are run amok." 31:34 Encore! EP176 with Dr. Robert Pearl. 32:12 "It's all about incentives." 33:05 "You do have the funding; you just have to have the courage."