Measuring value to ensure access in divisive times

Views & Analysis

Globally, balancing rising healthcare costs with the drive for innovation is a political hot potato – is a greater focus on patient-reported data the centre of value-based gravity we’ve been looking for?

Innovators are developing new treatments and cures quicker than ever, yet for the first time in a century the United States has recorded three consecutive years of decreasing life expectancy.

But it is possible to invest in innovation in a way that ensures Americans have access to new therapies, said speakers at a special event hosted by The Atlantic in Washington DC earlier this month.

Speaking during a panel discussion at The State of Care: The Health Ecosystem, Anand Parekh, chief medical advisor at the Bipartisan Policy Center, said the problem was not a lack of resources.

“In America, we spend between $3.6 trillion and $3.8 trillion on healthcare. That’s 18% of our gross domestic product, but it’s estimated that 25 to 30% of those dollars do not go towards improving health outcomes,” he said.

“The Lower Drug Costs Now Act intends to ensure Americans pay a fair price for medicine. But to truly understand value, the healthcare ecosystem must embrace modern evidence collection methods”

“Just imagine what we could do if we could redirect some of those resources, whether that’s to other sectors of society, to pay down debt – or whether that’s to invest in innovation, to ensure that Americans get access to all the evidence-based health services that they need.”

Value-based pricing

Whether a drug is a good use of resources is a complex equation depending on much more than its clinical benefits, said Rena Conti, associate professor at the Boston University Questrom School of Business and associate research director at the BU Institute for Health System Innovation and Policy.

Factors such as people being able to continue working or take care of their family as they undergo therapy must form at least part of the value assessment, she said.

The Lower Drug Costs Now Act of 2019, known as H.R.3, is currently before Congress. It includes a provision for an international price index, or Average International Market price, that would set maximum cost thresholds for new treatments.

The intention is to ensure Americans pay a fair price for medicine. But to truly understand value, the healthcare ecosystem must embrace modern evidence collection methods, rather than rely on data collected in other countries, the panellists said.

Josh Seidman, managing director at Avalere Health, said: “We are obviously moving from a fee-for-service to a more value-based payment environment. But one of the challenges we are facing is that the evidence being used is not based on the full range of information we have.

“We need to think about more creative ways of understanding evidence – collecting data across what's going on in real world settings, making the most of existing information systems and sharing that information.”

Real-world evidence

Closing the loop between drug development and the clinical setting could inform better decisions around value as well as reduce waste in the system and drive innovation, said Parekh.

“Right now, we're having conversations where there are FDA approved treatments for a particular illness. They're paid for by an insurance company, but the clinician and the patient don't know which treatment is better than another.”

This, he said, demonstrated a real need for the US to invest in patient-centred outcomes research and comparative effectiveness studies that could better explain value and drive innovation by incentivising comparability.

“We need to ensure that patients get the right treatments at the right time. We will only be able to do that, and allocate our resources appropriately, if we can get that information in the hands of patients and clinicians so they can use it for shared decision making,” he added.

Political will?

Despite political wrangles over the best way to support the affordability of drugs, there is clear appetite for change, Conti explained.

Both the proposed H.R.3, with its controversial provision to allow the Medicare program to negotiate prices with drug makers, and the Senate Finance Bill on Drug Reform demonstrate this political will.

Conti said: “It's clear that there's bipartisan support to improve the affordability of drugs in America, particularly for those who are under insured or who are living on fixed incomes.

“Stakeholders are very focused on addressing those issues. Whether or not the more controversial parts of H.R.3 becomes reality, we will see, but certainly addressing affordability for seniors and other folks living on fixed income has to happen.”

It’s a debate that is not going away, said Seidman, explaining that the scale of the issue meant it would continue to loom large in the public consciousness.

“We know that about 40% of people are skipping treatments of some sort because of the cost of care.  That is obviously high in the minds of people right now.”

How that translates into solid action in the current political environment, he added, was another question.

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