We hope you were able to see some fireworks, eat barbecue and relax by the water this July (all socially distanced, of course!). As the summer continues to unfold, we are here to once again bring you the latest and greatest in health spending research and policy. This month, we introduced a new tool to help organizations identity low-value care and unpack challenges measuring the benefits of innovation.

Digging Deeper

GBTS Launches the Low-Value Care Roadmap

COVID-19 has caused unprecedented financial disruption to a health care system already grappling with questions around how to allocate limited resources. This increased pressure on our system illustrates the need to ensure we are getting the most value from health interventions to optimize patient outcomes.

To aid in this effort, the Going Below the Surface (GBTS) Forum is launching The Roadmap to Address Low-Value Care. This step-by-step guide was outlined by a group of experts and academics convened by the GBTS Forum to identify critical considerations for ensuring effective health care resources. Using their real-world experience and academic expertise, this task force compiled an array of considerations and illustrative examples stemming from peer-reviewed sources. The Roadmap focuses efforts on prorating high-value care and eliminating wasteful spending to give funds back to the system and ensure our resources are effective during this unprecedented time.

Why it matters: Incentivizing our health care system to address costly inefficiencies is crucial during this global crisis, especially as high-value therapies to tackle COVID-19 become available. By reducing low-value care and the associated costs, we can create greater opportunities to improve patient outcomes and quality of care while reducing spending. Taking necessary steps to now to improve efficiency and care delivery across all sectors can help us prepare for the challenges ahead as coronavirus-related costs continue to rise. To learn more about the GBTS low-value care Roadmap, join us on Aug. 5 at 2 p.m. for a webinar hosted by the AMGA (American Medical Group Association) about how their members are taking steps to reduce low-value care throughout their organizations. Register here.

Why Is Measuring Innovation and Value So Complicated?

Innovation in other industries often leads to cost savings, but why is this not the case for health care? It may be because our traditional understanding of how to value innovation fails to encompass all factors relevant to patients and society. In a recent Health Affairs blog post, the International Society for Pharmacoeconomics and Outcomes Research’s chief scientific officer, an academic from the University of Pennsylvania and two health care industry consultants argued that current value measurements must evolve beyond the quality-adjusted life year (QALY) framework. Particularly for novel COVID-19 treatments, the authors suggested new value metrics are critical. They outlined eight alternative value elements, including the value of hope, family spillovers and health equity. These indirect and direct costs are not captured in typical cost-effectiveness models, but they remain essential when reviewing innovation and expenses associated with the health care system overall.

The reality of how we value innovation can be seen in a recent study from the Health Care Cost Institute. Researchers examined robot-assisted surgery for several procedures including hysterectomies, prostatectomies and knee replacements from 2013-2017. The authors noted that, though anecdotally, robotic surgeries lead to cost savings, their data showed mixed results. Spending for robot-assisted procedures was higher for inpatient and outpatient hysterectomies, and spending per hospital day for all five inpatient surgeries examined increases. All in, robotic-assisted operations are not driving down medical costs for patients. However, by broadening our value metrics, we see that other measures improved, such as a decreased average length of stay.

Why it matters: As we see with the Health Affairs piece, value frameworks and cost-effectiveness analyses are often remiss in considering factors important to patients. Two treatments could equally address a clinical need, but often times one option can offer more benefits than another, such as reduced caregiver burden or increased patient productivity. And more often than not, cost-effectiveness models fail to recognize this. We should be investing our limited resources into the therapies that produce these additional benefits in addition to cost savings and clinical outcomes. To do this, we need to assess if our current spending is appropriate, just as the researchers did from the robotic surgery analysis. By looking closely at all the value outputs, the authors determined whether the touted benefits of robotic assistance represented innovation that produced more value for society. On the surface, sometimes innovation appears to advance our health system, but when we dig deeper to assess the data surrounding multiple elements of value, the findings may surprise us.

What We’re Reading

The challenges in dealing with the COVID-19 pandemic have put a spotlight on racial and health disparities across our health care system. It’s no surprise that we’ve seen an uptick in journal articles examining this important issue.

  • Carlson MD, Roy B, Groenewoud AS. Assessing Quantitative Comparisons of Health and Social Care Between Countries. July 15, 2020, JAMA.
    • Researchers took a look at the United States’ lower life expectancy and higher infant mortality rates compared to other economically comparable countries that spend more on social services. Specifically, they wanted to learn if the ratio of social spending to health spending impacted health at the individual level. First, they examined social and health care use in the Netherlands and the United States using databases with individual-level data. However, they ran into limitations comparing the two countries due to serious differences in what outputs each government valued, variation among the patient populations and differences in database information. They proposed a new framework to effectively produce cross-nation database studies that address these factors.
  • Shafrin J, Venkatachalam M. Creating Incentives To Narrow The Gap In Health Outcomes: Expanding Value Assessment To Incorporate Health Inequality, July 15, 2020. Health Affairs Blog
    • The authors argue that the drug development process should incentivize therapies in disease areas that disproportionately impact minority populations. The first step to achieve this goal is to reconsider how value assessment frameworks like the Institute for Clinical and Economic Review and the UK’s National Institute for Health and Care Excellence address inequality in cost-effectiveness models. Though each organization acknowledges inequality as important, the authors argue neither explicitly incorporates health disparities to reduce inequality in health outcomes.

Dialogues on Health Care Spending

Conversations about health care spending aren’t taking a vacation (though we all could use a change of scenery). Check out some lively dialogues that are taking place online. 

  • Reducing Low-Value Care Roadmap: How AMGA Is Charting a Course to Change Health Care: Join us for a webinar on Aug. 5 at 2 p.m. ET to learn how AMGA members are taking steps to reduce low-value care throughout their organizations. Presenters will unveil a roadmap for addressing low-value care developed in partnership with Going Below The Surface.
  • 2020 Annual Research Meeting, July 28-Aug. 6, 2020: Academy Health will host its annual research meeting online this week, focusing on new research, innovative methods, and robust discussions about the impact of health services research on health policy and practice. Register here.
  • Why Danish Concrete Prices Matter for Health Care: Can price transparency help to lower health care spending? The Tradeoffs podcast tackles this question and compares it to what happened in Denmark in the 1990s, when the government required negotiations between construction and concrete firms to be transparent.