Before diving in, we suggest snuggling up on the couch with a fall-themed beverage to achieve maximum value from your monthly health economics and policy research roundup. If you’d like, you can even go with decaf: the topics this month are lively ones. We look at an article that examined the tension between higher-value care and the need to reduce spending, as well as take a deep dive into the key health intervention drivers and conditions responsible for increasing life expectancy over the past 25 years.

Digging Deeper

More Spending Is Not Always Bad

The underlying goal of Going Below The Surface is the examination of the drivers of health spending – it says so right on our home page – so last month’s New England Journal of Medicine article, “Do We Spend Too Much on Health Care?” hit with a special thrill. The article, by the University of Chicago’s Katherine Baicker and Harvard’s Amitabh Chandra, manages to dodge a binary answer to the question posed in the title while opening up an even more important conversation.

Baicker and Chandra make the point that more spending should not automatically be viewed negatively, especially in a high-income country such as the United States, where individuals and government may be willing to pay more, particularly for high-quality care. Instead, the authors suggest a more rigorous focus on whether the care delivered is high value or low value, not high cost or low cost.

Why It Matters: The NEJM article makes clear that a re-thinking of how health care is allocated with a focus on value has clear policy implications. A value-first approach means that there should be great skepticism around what the authors call “crude cost-sharing implementations” such as “across-the-board high deductibles,” coupled with a greater willingness to pay for fewer – but more high-value – services in an effort to cover more Americans. Still, as we’ve documented over the months, it’s not always clear which interventions drive the most value, meaning that Baicker and Chandra’s piece should – at a minimum – be seen as a call to action to build a better evidentiary base.

Getting The Most Value Out of Our Spending

This month in Health Affairs, Harvard researchers David Cutler, Michael Chernew and co-authors assessed the most significant health interventions that contributed to the 3.3-year life expectancy increase in the United States between 1990 and 2015. Their findings shouldn’t be too surprising. Public health interventions such as smoking reduction and seatbelt usage accounted for 44% of the increase, followed closely by innovative pharmaceuticals, which contributed to 35% of improvements. Medications’ contributions to life expectancy were nearly three times greater than all other medical interventions combined.

The study underscored the important role pharmaceuticals play in preventing leading causes of death, including heart disease and cancer. The authors urged policymakers to consider the “central role of medications overall in explaining reduced mortality.” Although not a direct comparison, a 2018 National Pharmaceutical Council and RTI International survey (described in one of our first GBTS e-newsletters) found similar results. That study compared biopharmaceutical interventions with surgical procedures, diagnostics and medical devices, rather than public health interventions, and also found that biopharmaceutical interventions drove the greater percentage of improvements.

Why it Matters: The Health Affairs study confirms a trend we’ve been observing as the country tackles the COVID-19 pandemic. While we know public health efforts like social distancing and mask-wearing are critical to overcoming the virus, a vaccine is an equal piece of the puzzle. This study affirms the health care system’s need to make strategic investments in biopharmaceutical intervention. As organizations, policymakers and patients assess where to spend limited health care dollars, we should aim to invest in interventions that produce the most “bang for our buck,” and medications provide that.

Your Guide for Prioritizing High Value, Cost-Effective Treatments

Of course, understanding when to use specific treatments is equally as important as knowing which services to use. Need a refresher on how to prioritize high value, cost-effective treatments? Check out the Going Below The Surface Forum’s Roadmap for Addressing Low-value Care for a step-by-step guide to reducing wasteful spending and promoting value-driven interventions. Download it. Share it with your staff and colleagues. Maybe include it in your upcoming meeting materials? It’s here for you to use.

What We’re Reading

COVID-19 has certainly shed light on some of our health system’s shortcomings, but it has also allowed us to apply insights from the pandemic to improve health care delivery.

  • Navathe AS, Liao JM. After COVID-19, A Payment Policy Reboot: Three Lessons From The Pandemic On How To Improve Value-Based Payment, August 11, 2020, Health Affairs Blog.
    COVID-19 has disrupted our health system as well as the movement toward value-based payment reform. Despite many research setbacks, the authors highlighted several lessons learned from the pandemic that could help inform more robust alternative payment models in the future. The widespread use of telehealth, the implementation of better patient triaging tools, and a new focus on racial disparities will likely contribute to a more effective value-based payment model.

Dialogues on Health Care Spending

Looking for a good podcast or webinar to pair with your fall-themed beverage? Check out these suggestions below.

  • Tradeoffs Podcast: A crop of new episodes were posted this month, focusing on the Trump Administration’s response to COVID, how vaccines might be priced, and surprise medical bills, to name a few topics.
  • Webinar: Taking Bold Action to Achieve Health Equity: The COVID-19 pandemic has brought greater visibility to the issue of health inequities in the United States, but it is a challenge health care leaders have already been working to address. On Sept. 30, hear from innovative organizations that have taken steps to prevent gaps in health care quality and accessibility. The webinar is being hosted by GBTS Forum partner Healthcare Leadership Council.