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Issues and Considerations of Promoting Cost-Effective Care


Coverage of the “decisions at the point of purchase” segment for the Health Spending: Moving from Theory to Action event at the National Press Club in Washington D.C.

During a panel on decisions at the point of purchase, Robert Dubois, MD, PhD, chief science officer and executive vice president of the National Pharmaceutical Council (NPC), moderated a discussion that answered questions regarding the use of cost-effectiveness by payers and the considerations surrounding the topic. Decisions at the point of purchase, also known as the bottom-up approach, revolve around the issue of low-value care, which promotes unnecessary or inefficient healthcare services.

The panel, which met during the “Health Spending: Moving from Theory to Action” event held by NPC and Health Affairs, consisted of Otis Brawley, MD, Bloomberg distinguished professor at Johns Hopkins University; Dan Ollendorf, PhD, director of value measurement and global health initiatives for Center for the Evaluation of Value and Risk in Health (CEVR) at Tufts Medical Center; Surya Singh, MD, president of Singh Healthcare Advisors; and Elizabeth Mitchell, president and chief executive officer of Pacific Business Group on Health.

Perspectives and Solutions to Low-Value Care

Speaking on low-value care, Brawley opened the discussion by quoting Warren Buffet, “cost is what you pay, and value is what you get,” said Brawley. The overconsumption of care is an issue that Brawley prioritized as he evoked examples correlated to positron emission tomography—computed tomography (PET/CT) scanners and proton beam therapy.

It has become common that women who survive breast cancer be scanned every 6 months or yearly with PET/CT scanners. This process causes a myriad of issues for patients relating to radiation exposure and anxiety from false alarms that lead to unnecessary procedures. Radiation from PET/CT scanners can potentially cause leukemia which emphasizes why surveillance methods such as a physical exam, blood test, or mammogram, recommended by medical oncology boards, are optimal alternatives.

Proton beam therapy is an additional problem for cost-effectiveness in healthcare. As Brawley described, there are no studies that show a heightened benefit from proton beam therapy for prostate cancer when compared with conventional intensity-modulated radiation therapy (IMRT). Yet, since proton beam therapy is the new treatment for prostate cancer and subsequently underutilized, Medicare reimburses providers a range of $40,000 to $80,000 for treatments while IMRT reimbursement hovers around $18,000. This incentivizes providers to promote the treatment that harms patients economically.

Ollendorf focused on value-based treatment, and the inconsistent use of cost-effectiveness analysis (CEA), which can deter medical practice and policy. Market access is an underlying cause for this as Ollendorf attributes the United States’ health technology assessment (HTA) as an inadequate gatekeeper, especially when compared with other regulatory bodies like the United Kingdom’s National Institute for Health and Care Excellence.

CEA’s ability to assess health gain and cost at the margin was emphasized by Ollendorf as it can identify areas of uncertainty for evidence of benefits and flag possible implementation challenges for drugs. Its importance, as well as budget-impact analysis, will grow as this lack of a gatekeeper mandate persists to understand breakthrough therapies, monitor unmet needs for public health burdens, and anticipate potential budget overload.

Singh, the former vice president and chief medical officer of specialty pharmacy for CVS Health, focused on more of the payer-review point and the activities that payers engage in for the bottom-up approach. Singh alluded to his time at CVS and how it focused on data and whether the overall expenditure of the main plan sponsor for customers economically managed utilization. While CVS found utilization to be in normal levels, price was becoming significantly more costly.

To combat rising costs, CVS came up with a plan design with a mechanism to “eliminate coverage for low-value prescriptions and care,” said Singh. Delineating which prescriptions and care fell under this low-value distinction was helped through utilizing incremental cost-effectiveness ratio body analyses and deferring to the FDA. By focusing on more cost-effective treatments, employers and employees began to pay for more value-based treatments that applied to their needs.

Focusing on affordability and accountability of care, Mitchell described how the burden placed on employers to manage healthcare costs is reflective of the instability of the healthcare industry as, for these employers, “healthcare is not their day job,” said Mitchell. Taking initiative in finding cost-effective care can be necessary for “employers, employees, and their families who are paying these outrageous price increases for these low-value services," she added.

Policy intervention is one solution presented by Mitchell that cannot be directly handled by employers, but heightened awareness can push policy makers to impose restrictions.

“We have concluded that there are some anticompetitive practices happening that won’t be solved by the market, it is going to require policy intervention,” said Mitchell. These practices monopolize healthcare services and inhibit the value of care through their focus on garnering increased profit rather than results, she explained.

Key Takeaways

Each panel member had their distinct message about the bottom-up approach that they wanted to leave audience members with.

Brawley focused on preventive measures as he described how “we need to educate the second and third graders about healthcare, how to eat, how to exercise, how not to smoke, not to drink, and how to actually think about science,” said Brawley.

Ollendorf prioritized the creation of a true market gatekeeper as he stated, “An advisory, but [subsequently] comprehensive HTA body who reviews clinical evidence and provides advice on whether additional reimbursement is justified for a new service, does an evaluation to understand how cost-effective the price of that service is, and works with the clinical societies to set evidence-based clinical guidelines,” said Ollendorf.

Singh emphasized that managing and utilizing the extensive data available in a unified way is key. “Instead of lobbying or supporting only the things that are going to help our own bottom lines, thinking about what’s going to help our industry…we’ll be better off,” he said.

Mitchell highlighted that improving behavioral health is a significant goal that serves as a top priority amongst her members. “There is no mental health system that is functionable in this country, and it drives so much need,” said Mitchell. Additionally, she stressed the need for more accountability on board members who create these substantially high prices.

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