Initially focused on removing financial barriers to obtaining drugs prescribed for certain chronic conditions, employer use of value-based insurance design initiatives has evolved to also encompass high-value primary and preventive health care services.

In some cases, employers have begun using these plan design principles to discourage the use of certain low-valued procedures, such as hysterectomies and low-back surgery, unless they are deemed medically necessary by a doctor’s second opinion.

And with more evolved programs companies also are offering financial incentives to medical providers to ensure that the employees they treat are receiving only evidence-based medical care.

“I think VBID today is a term that means anything from removing barriers to medication — which is where it started — to essentially getting the incentives right so that employees are encouraged to make higher-valued choices,” said Mike Thompson, a principal at PricewaterhouseCoopers L.L.P. in New York. “I think VBID is a refinement of the consumer-driven health care movement. If high-deductible health plans are a sledgehammer, VBID is taking a more thoughtful approach to getting employees to do the right thing.”

The concept of value-based insurance design got its start in 1997, when the city of Asheville, North Carolina, reduced copayments for its employees with diabetes who agreed to participate in an intensive pharmacist-directed disease management program that focused on self-management of this chronic condition. Five-year patient outcomes included marked increases in medication adherence, improvements in hemoglobin levels and overall cost reductions of 58% below expected levels.

Because of the documented success of the Asheville program, numerous large self-funded employers including Pitney Bowes Inc., Marriott Corp. and Caterpillar Inc. also adopted similar value-based benefit plan designs.

More recently, members of the National Business Group on Health in Washington have decided to take the model a step further by implementing financial disincentives to discourage the use of low-value services as part of the “Choosing Wisely Campaign,” an initiative of the American Board of Internal Medicine supported by a Consumer Reports study that focuses on the use of evidence-based medicine.

Under the program, NBGH member companies can access tools and information about evidence-based care and disseminate it among their employees via their benefit communications. Some employers are using this information to direct employees toward higher-value care and away from low-value care through the use of financial incentives and disincentives.

“There are a lot of experiments going on,” said Shari Davidson, an NBGH vice president, citing one member company that she declined to identify “that is paying lower reimbursements for eight identified procedures that medical evidence shows should not be done routinely, such as hysterectomies, knee arthroscopy, low-back fusion.”

“It’s a way to drive employees to seek better-value care,” she said.

David Dross, a partner and managed pharmacy practice leader at Mercer L.L.C. in Houston, said he is seeing less activity involving value-based insurance design implementation among his clients as they focus more on complying with employer requirements of the Patient Protection and Affordable Care Act.

However, he also said he is seeing an uptick in pay-for-performance projects designed to provide incentives to medical providers to keep people healthy.

In some cases, employers are providing incentives to providers that are part of so-called high-performance networks, a narrow subset of a preferred provider network, to implement value-based insurance design principles.

“Now, I see VBID being instituted at the provider level,” said Cameron Congdon, client delivery leader at Towers Watson & Co. in Boston. “We’ve always known that the physician is the source of guidance. It’s a different focus of VBID, happening at the molecular level as opposed to the high level.”

Grand Junction, Colorado-based Hilltop Community Resource Inc. is conducting one such experiment, coupling value-based insurance design principles with provider pay for performance.

The nonprofit employer offers employees with one or more of six chronic conditions — asthma, congestive heart failure, coronary artery disease, clinical depression, diabetes and hypertension — free generic prescription drugs and two free doctor’s office visits annually, as long as they seek those services from Primary Care Partners, a local physician group that is receiving an additional per-member-per-month stipend from Hilltop to provide such care.

So far the program has succeeded in reducing Hilltop’s health benefit costs. The organization reported that its 2013-2014 health care costs ended at two-thirds of expected medical expenses for the plan year.

Though numerous published studies have demonstrated the effectiveness of value-based insurance design on reducing health care costs, these savings often did not accrue until after several years, which has made the programs less attractive to employers with high employee turnover.

However, little data has been published showing the positive effect this concept can have on employee absence and productivity, which may be where employers are likely to realize the greatest return on this investment, experts say.

“To a great extent, the conversation has always been about reduced costs. But if the conversation can expand to other business outcomes such as not missing work, that resonates with the C-suite,” said Tom Parry, president of the Integrated Benefits Institute in San Francisco, which has been studying the effect of increased medication adherence among rheumatoid arthritis sufferers on lost time and productivity.

“Outcomes have to go beyond health care costs. If I’m not getting medical services because they’re not needed, that’s one thing. If I’m not getting medical services that are needed but I don’t want to spend my own money, then that’s a horrible bargain for everybody — the employer and the employee. And that’s why this conversation has to expand beyond medical costs,” Mr. Parry said.

“We need to change the health care cost discussion from how much we spend to how well we spend,” said Dr. A. Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan in Ann Arbor.

The center had urged inclusion of these value-based design principles in the Affordable Care Act, such as providing 100% coverage for certain high-value preventive care services identified by the U.S. Preventive Care Task Force.

“It’s one of the few ideas that not only has bipartisan political support, but also that of health sciences companies, health plans, consumer groups … because the status quo just seems to make no sense,” Dr. Fendrick said.