The High-Value Playbook

For the last two decades, pushing high-deductible health plans onto employees has been the primary formula for controlling healthcare costs. The theory sounds reasonable — give workers skin in the game and they’ll turn into savvy, cost-conscious healthcare shoppers.

Instead, this creates a blunt instrument. A standard deductible treats a $500 unnecessary MRI the same as $500 of essential diabetic medication or blood pressure management.

Dr. Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan, joined a recent episode of Moving to Value Unscripted to explain how financial toxicity quickly becomes clinical toxicity when out-of-pocket costs force patients to skip care. He shared how plan sponsors can instead restructure their healthcare spend around high-value outcomes.

Strategy 1 — Adopt Clinical Nuance over Blunt Consumerism

Healthcare is not a traditional consumer market. "Cheap" doesn't necessarily mean low-value, and "expensive" doesn't always mean high-value. Pushing high deductibles across the board hasn't lowered total spend, it’s just caused patients to forgo high-value, life-saving preventive care alongside unnecessary services.

Value-Based Insurance Design (V-BID) solves this by applying clinical nuance, aligning out-of-pocket expenses directly with a service's clinical value rather than its price tag.

Strategy 2 — Reframe the Financial Equation for the C-Suite

When plan sponsors consider dropping copays or offering pre-deductible coverage for high-value chronic conditions, CFOs often fear that lower out-of-pocket costs will trigger runaway utilization and inflate total plan spending.

To win C-suite support, plan leaders must establish two financial realities:

1. Cost-Effectiveness Does Not Equal Cost Savings: High-value care is about maximizing the health returned per dollar spent, not seeing immediate net budget cuts.

2. Neutralize Costs via Elimination: Because health benefits are worth paying for but budgets are finite, employers must become "low- and no-value care" realists. Every dollar invested in lowering barriers for high-value services (like diabetes management or hypertension control) must be offset by identifying and eliminating dollars spent on procedures that offer zero clinical benefit.

Strategy 3 — Align Demand-Side Benefits with Supply-Side Reform

Industry leaders spend a great deal of time implementing provider-side payment reform such as Accountable Care Organizations (ACOs), bundled payments and primary care capitation. However, supply-side reform cannot succeed in a vacuum.

If an ACO encourages a patient to actively manage their chronic condition, but the employer's benefit design imposes a heavy deductible on the required prescriptions or lab work, the care model stalls out. Precision benefit design on the demand side acts as the necessary engine that enables provider payment models on the supply side to succeed.

Strategy 4 — Leverage Real-Time Decision Support & Policy

From drafting $0 preventive care provisions in the Affordable Care Act to expanding pre-deductible chronic care coverage under IRS guidelines, the policy foundation for V-BID is already established.

To execute this at scale, employers should leverage modern point-of-care tools and AI-enabled decision support. Providing real-time benefit and cost-sharing guidance to clinicians and patients at the moment of care ensures that high-value treatments are frictionless to access, while low-value services require clinical justification before approval.

By replacing blunt financial penalties with targeted incentives, self-insured employers can curb wasteful medical spend, protect their workforce from financial toxicity and build a health benefit structure that truly delivers value.

Catch our full conversation with Mark to learn more.

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