MedEvidence! Truth Behind the Data · Dr. Michael Koren

Value-Based Insurance Design and the Focus on Patient Cost

January 21, 2026·28 min·2 clips

Fendrick's team wrote the ACA paragraphs that made COVID shots and 90 preventive services free for 200 million Americans.

1. MedEvidence, hosted by cardiologist Dr. Michael Koren, interviews Dr. Mark Fendrick, health policy professor at the University of Michigan and co-creator of value-based insurance design. 2. Dr. Fendrick is a general internist trained at the University of Pennsylvania and Harvard Medical School, with a PhD fellowship at Penn's Robert Wood Johnson Clinical Scholars Program including study in Stockholm and Paris; he has been at the University of Michigan for 32 years. 3. The episode's core thesis is that patients don't care about healthcare costs — they care about what it costs them — and that designing insurance to make high-value services free increases use of the care that actually improves health outcomes. 4. Fendrick traces his interest in healthcare economics to a Wharton School of Business class he took as a pre-med undergraduate at Penn in 1979, taught by economist Ernie Bloom, who became a lifelong collaborator. 5. Value-based insurance design (VBID) was developed around 2000 by Fendrick and colleague Michael Chernu, then at Michigan, who proposed that patients should pay based on clinical value rather than service cost — so essential care is free and low-value care carries higher cost sharing. 6. Pitney Bowes, a small company in Connecticut, became the first major VBID adopter around 2001 by making branded cardiovascular and diabetes medications available at generic drug prices for employees. 7. A Wall Street Journal front-page story on Pitney Bowes in 2001 put VBID in the national spotlight — Fendrick notes this single newspaper story advanced the idea more than his academic publications had. 8. Fendrick's team wrote three specific paragraphs of the Affordable Care Act that established a no-cost preventive services provision covering approximately 90 services — including cholesterol screening, mental health screenings, and certain cancer tests — for over 200 million insured Americans; those paragraphs were later amended to make COVID shots free. 9. Despite working on the ACA, Fendrick describes his career as nonpartisan, having collaborated with both Democrat and Republican stakeholders including Newt Gingrich, on the shared principle that patients should not face high out-of-pocket costs for essential care. 10. The four ACA-covered no-cost cancer screenings are: mammography for breast cancer, HPV or cervical cytology for cervical cancer, stool-based testing or colonoscopy for colorectal cancer, and low-dose CT for lung cancer. 11. A coverage gap existed where patients who screened positive still faced out-of-pocket costs for follow-up diagnostics, potentially deterring completion of the screening continuum. 12. As of 2023, policy was updated to cover follow-up colonoscopy after a positive stool-based colorectal screening at no out-of-pocket cost. 13. On January 12, 2026 — twelve days before the recording date — a national policy was announced covering diagnostic mammogram and biopsy after a positive screening mammogram at no out-of-pocket cost, effective one year from the announcement. 14. Lung cancer follow-up CT after a positive low-dose CT scan remains the one cancer screening continuum gap without a no-cost coverage policy as of recording. 15. Fendrick describes financial non-adherence — patients not following through on recommended care due to cost — as a major unresolved problem, and advocates that clinicians explicitly ask patients about their ability to afford follow-up care. 16. He identifies 2026 healthcare policy risks: millions potentially losing ACA exchange coverage due to subsidy changes, and tens of millions at risk of losing Medicaid under the 'one big beautiful bill' act. 17. On the positive side, drug price negotiation under the current administration and GLP-1 drugs for obesity are cited as policy wins, though Fendrick frames GLP-1 coverage as an example of the difficulty of funding new high-value treatments when low-value care remains covered. 18. The episode is structured as a casual colleague-to-colleague interview; both hosts are physicians with clinical practices alongside their research roles, and the conversation is conversational and at times joking. 19. Clinicians, health policy professionals, and patients navigating insurance coverage for preventive care or cancer screenings will find the most actionable value. 20. Listeners seeking clinical trial data, patient case studies, or specific treatment guidance will find this episode too focused on policy and economics to be directly useful.

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A thoughtful health-policy conversation that makes patient costs and insurance design feel immediate.

MedEvidence handles health policy with physician-to-physician clarity, which keeps a serious subject easy to follow without sanding off its weight. Dr.

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