Healthcare—fueled by objective data and reliant on metrics—has been steadily moving toward a “value-based” system. But the common interest to deliver value has not led us to find common ground in how we measure it.
The most-established approach to assess and measure value is cost-effectiveness analysis.
The Institute for Clinical and Economic Review’s (ICER) cost-effectiveness analysis reports on specific drugs are garnering interest, and ICER is collaborating with the Department of Veterans Affairs in drug coverage and price negotiations. The Medicare Payment Advisory Commission (MedPAC) has even shown interest in using cost-effectiveness analysis to determine Medicare payment policy in the future.
But despite growing interest, cost-effectiveness analysis and similar methods of value assessment, including quality-adjusted life-year measurement, the programs have received criticism from those who say these measurements don’t account for individual patient diversity.
Cost effectiveness, they say, implies that you can quantify what someone’s health is worth, or that someone’s livelihood is less valuable if they have a disability. Patients and patient groups accuse present methods of painting with too broad a brush, distilling patients down to calculated averages.
The Patient-Centered Outcomes Research Institute (PCORI) has prohibited the use of cost-effectiveness analysis, and the Centers for Medicare & Medicaid Services (CMS) has thus far barred cost-effectiveness analysis in coverage decisions.
Value is a matter of perspective, and no patient is average. As stakeholders across healthcare struggle with and refine the process of determining value, differing perspectives will trigger fierce debate, with some arguing that cost-effectiveness analysis should never have a place in a value-based health system.
But it would be a mistake to completely disregard the progress we have made with such analysis. Instead, it’s important to identify what makes these models imperfect and work together to improve upon the tools and methods we employ to ultimately find consensus on value assessment.
In short, it’s time for Value Assessment 2.0 in healthcare.
One way value assessment needs improving is by capturing value from the patients’ perspective. The only way to understand how patients define value is by making them equal partners at the forefront of value measurement.
Patients differ in their individual characteristics, personal preferences, progression of illness and response to treatments. Value assessments must become more personal and account for these differences to match the real-world diversity in patient preferences and clinical characteristics.
Another “must have” for next-generation value assessment is tailoring quality-adjusted life-year measurements to the unique realities of experiencing different diseases.
For example, asthma and pancreatic cancer are vastly different, and so are the experiences of patients with such diseases. An understanding of the benefits and costs of treatment may be seriously flawed if quality measures are not specific to that disease.
Quantification needs to be improved, not tossed out. Policymakers do need mechanisms to understand what kind of return on investment taxpayers are getting in publicly financed healthcare programs, they just need better tools. And if patients are at the table from the beginning, methods to quantify therapeutic value will improve.
By accounting for the unique differences in people, policymakers will gain a much deeper understanding of real-world value. Not only will this help inform their decision-making with scarce resources, but also having the patient perspective at the core of value assessment decision blunts the accusation that cost is the only way to quantify value, and thus what someone’s health is worth.
Improving value assessment is a science that will take time, but we can be optimistic about the progress we’ve made to date. To arrive at a better way to measure value, healthcare decision-makers with different points of view need to come together to transparently find—and refine—a recipe that works for them.
Mark Linthicum is the director of scientific communications for the Innovation and Value Initiative (IVI).