Measurement of value in health care has become an increasingly important goal given assessments of both questionable benefit and high cost in the United States. However, value can be very difficult to define in a way. Quality measures include clinical structure, process and outcome measures of overuse, underuse, and misuse, and patient experiences of care—each with barriers and problems to implementation and use, he asserted. Transparency and problems with reliability of measurement hinder resource use measurement, he continued.
Measurable clinical efficiency can then be defined by combining composites of quality with resource use-cost measures in the same population of patients displayed in various combinations ratios, scatter plots, etc. The choice of what level individual clinicians, sites, groups, integrated delivery systems, health plans of the healthcare system to attribute measures of quality and resource use is also a major challenge with important trade-offs.
Dimick of the University of Michigan considered the value of surgical care from two perspectives. The first considered the effectiveness of surgery, relative to other approaches, for treating medical conditions. He stated that value assessment in this context is the domain of evidence-based medicine, where comparative effectiveness is assessed by critical evaluation of randomized clinical trials and observational studies.
Ensuring that patients receive surgery only when the evidence indicates the benefit outweighs the risk clearly improves patient value, he said. The second perspective is motivated by the widespread variations in quality and costs across providers. Dimick stated that value assessment in this context—provider profiling—is particularly timely and is the focus of several public reporting and value-based purchasing efforts. Eliminating variations across providers would undoubtedly lead to large gains in patient value, he asserted.
However, for these efforts to be successful, good measures of quality and cost are needed. Dimick suggested that good measures of surgical quality are close on the horizon. For some conditions, good measures are already available and are being applied, he continued.
Achieving Better Value for Money in Health Care
Although good measures of cost are. Thus, ensuring high-quality care will also lead to lower-cost care. Finally, Dimick concluded that despite a growing emphasis on profiling the technical quality of surgery, there is very little focus on the decision to perform surgery in the first place. To fully assess the value of providers, it will be important to incorporate appropriateness criteria into provider profiling.
Achieving Better Value for Money in Health Care
Diagnostic imaging spending has exceeded overall healthcare expenditure growth, straining public primarily Medicare and private primarily employer-sponsored health benefits sector contributions to healthcare delivery. Forman of Yale University suggested that value to the beneficiary has been measured in terms of cost-effectiveness for a very small proportion of total imaging. Even in situations where imaging is proven not cost-effective or not effective at all , private and public payers have had a difficult time limiting its application e.
Forman said that value to the referring clinician has only peripherally been explored and never explicitly been measured. Whether due to defensive medicine e. He concluded that further research and demonstration projects may be necessary to better assess the role of gain sharing or global payments for imaging delivery in the inpatient, outpatient, and emergency room settings. Meltzer of the University of Chicago stated that prevention is an important contributor to improvements in population health. Prevention can also sometimes avert the need for costly future medical treatments, causing some to focus on prevention as a potential mechanism to control healthcare costs, he continued.
This presentation reviewed the use of medical cost-effectiveness analysis to address these questions. Meltzer suggested that although prevention can be, but is not always, a cost-effective approach to improving health, it is infrequently a powerful approach to controlling healthcare costs, either in the short term or in the long term. He concluded that, moreover, the value of prevention can be influenced profoundly by the context in which it is used, with patient preferences and other characteristics often playing a major role in its value.
McElwee of Pfizer, Inc. He discussed how one framework views value in the context of specific decisions and their respective stakeholders. Descriptions of several key decisions during the life cycle of a healthcare technology illustrated how value is considered in decision making, including the early-phase investment decision by the technology developer, the marketing approval decision by the regulatory agency, the adoption or diffusion decision by the payer, and the individual treatment decision by the patient and the physician.
As a result of the growth of molecular diagnostics, a tremendous wealth of information has been gained about the molecular characteristics of the human genome, according to Ronald E. Aubert of Medco Health Solutions, Inc. In the past few years, we have also gained a clearer understanding of the functional aspects of the genome. Aubert explained the concept underlying pharmacogenomics PGx —that the response to drug therapy varies, in part due to genetic variation. This interaction between genetics and drug therapy allows us to understand how drugs may work more effectively or safely.
This presentation reviewed the use of PGx testing and its potential to help physicians and patients achieve more predictable and better outcomes. Given the potential benefits and increasing use of PGx testing, Aubert concluded that careful consideration should be given to the evaluation of testing strategies, including the determination of overall value.
The clinical and economic evaluation of medical device interventions varies greatly across the spectrum of existing devices.
While therapeutic devices achieve many of the same effects as surgical procedures, Parashar B. Although devices have a faster cycle of innovation than drugs, their rates of adoption and short-term economic impacts are slower, and the evaluation approach should differ accordingly, asserted Patel. New device interventions are typically studied and reserved for use in small, highly refractory patient populations after other treatment options have failed. Early life-cycle device evaluations thus focus on clinical safety and effectiveness from societal, payer, and facility perspectives.
While many models have been produced to estimate the economic value of device interventions, it is still uncommon to conduct comprehensive economic evaluations for devices, stated Patel. These are typically reserved for a later stage when there is potential for broader adoption and expansion of patient indications, and head-to-head comparisons with alternative treatments are desired and more practical. This presentation discussed measurement of the value of device interventions and its unique challenges, including difficulties with randomization and blinding, methods of comparing different treatment modalities, and accurately assessing economic value in the face of rapid technological and procedural improvements.
Given these challenges, measuring and comparing the value of therapies across treatment modalities can be difficult. The next set of speakers presented specific examples of current approaches to improve value in health care in three main areas: Each session explored the nature of the efforts, and the best practices and results to date. Speakers focused particularly on the evidence of impact and the future potential to improve value with each approach. The first session focused on the use of a variety of consumer-oriented strategies to promote value.
Value-based insurance design A. Mark Fendrick of the University of Michigan suggested that healthcare reform discussions increasingly focus on. Unfortunately, value—the clinical benefit achieved for the money spent—is frequently excluded from the dialogue on how to solve the healthcare dilemma, he added. Instead, the dialogue focuses on two trends—quality improvement and cost containment. Fendrick asserted that efforts to lower costs such as increasing premiums or increased copays can create financial barriers that discourage the use of recommended services and the overuse of interventions that are of questionable benefit.
Patient copayments for services designated as quality indicators have risen dramatically and at the same rate as less valued services. Fendrick stated that this is a concern because studies show that patients who are required to pay more for their health care buy less—of essential and excessive therapies alike. He described how value-based insurance design VBID offers a potential incremental solution to enhance efficiency in healthcare spending. The basic VBID premise is that patient contributions for high-value services remain low, mitigating the concern that higher cost sharing will lead to deleterious clinical outcomes.
Higher cost sharing will apply to interventions with little or no proven benefit. This presentation reviewed examples of VBID programs that encourage the use of high-quality services and demonstrate significant increases in patient compliance. The net financial impact of copayment relief on healthcare spending and nonmedical expenditures remains unclear, stated Fendrick. This presentation concluded that efforts to control costs should not lead to preventable reductions in quality of care.
By aligning financial incentives, he asserted, this strategy would encourage the use of high-value care while discouraging the use of low-value or unproven services and ultimately would produce more health at any level of healthcare expenditure.
Consumer-directed, high-deductible health plans Melinda Beeuwkes-Buntin of RAND discussed the experience with and the potential for improving value through consumer-directed, high-deductible health plans CDHPs. Buntin stated that CDHPs should be shaped to increase value by promoting the collection and dissemination of information about the cost and quality of care. Additionally, the value of CDHPs could. Building on this overview, conclusions for policy and practice were offered. Scanlon of Pennsylvania State University described how tiering systems typically allow the patient or consumer to select a provider, service, or therapy in any tier, with the required out-of-pocket cost to the consumer or patient varying based on the tier selected.
Most tiering programs provide some information about the criteria used to define the tiers, though to varying degrees of detail. By providing better coverage i. This presentation examined the research evidence for tiering programs in health care, and several examples of tiering programs were provided. One example discussed in detail is a hospital tiering program, called the hospital safety incentive HSI , implemented by a large midwestern employer.
Under the HSI, eligible employees and their beneficiaries associated with two union groups were required to pay hospital coinsurance, set at 5 percent of total approved hospital charges, up to an annual out-of-pocket maximum. However, the coinsurance was waived i. Salaried non-union employees and their beneficiaries were not eligible for the HSI and served as a control group in the analysis.
The results indicated that the HSI influenced the selection of hospital for one of the two union groups—beneficiaries admitted to the hospital with a medical diagnosis. Specifically, beneficiaries in this category were 2. These beneficiaries were also significantly more likely to choose a hospital that qualified for the HSI relative to the control group as a result of the incentive.
The presentation ended with a discussion of the key policy issues associated with tiering programs in health care. Goetzel of Emory University suggested that the scientific evidence is mounting that worksite health promotion and chronic disease prevention programs can reduce health risks and produce a posi-. However, challenges arise in designing and implementing effective programs that achieve the best results, documenting program achievements so that scientists and lay people can readily understand and accept research findings, and communicating results to the broad healthcare community.
This presentation discussed those challenges with particular emphasis on how to disseminate timely information to the business community. Goetzel highlighted examples of large-scale research studies previously conducted and those currently under way that are supported by federal and private sector grants. For example, in a project funded by the National Heart, Lung, and Blood Institute, several research organizations are working with employers to design, implement, and evaluate an environmental and ecological intervention program aimed at preventing and managing overweight and obesity in the workplace.
Other worksite studies funded by the Centers for Disease Control and Prevention CDC are looking at the effectiveness of employer-based programs. In addition to discussing how workplace wellness programs can serve as vehicles for health behavior change, recommendations to increase employer engagement in providing evidence-based health promotion programs to their employees were offered. This session explored examples of approaches to improve value in health care, with a focus on the use of payment design and coverage and reimbursement policy to improve value.
Pay-for-performance Although the current healthcare financing system encourages the provision of more care, it does little to ensure that individuals receive appropriate care or that the care they receive is effectively or efficiently provided, asserted Carolyn M. Clancy of the Agency for Healthcare Research and Quality. She discussed how, in recent years, payers have implemented an array of strategies aimed at using financial incentives.
She suggested that although some research is being done on the alignment of payment incentives with quality, critical gaps in our collective knowledge exist. These gaps include evidence related to the impact of payment mechanisms that reward healthcare providers for improving quality and evidence on financial incentives aimed at rewarding patients for choosing high-quality providers. This presentation addressed the issues of what we know and do not know about performance-based value and reaching a stage where people are paying for value and collecting data in ways that address the potential benefits for all stakeholders.
Incentives for product innovation Donald A. He began with an overview of the facts and figures behind pharmaceutical research and development. He stated that innovative medicines are an important part of the solution to chronic disease and controlling healthcare costs.
However, he added that the value of innovative therapies is often not realized by current incentive structures e. Sawyer also discussed the need to change current budget and contracting processes with payers by the use of specific examples. The presentation concluded with options to recognize the long-term value of a product to patient health while maintaining an environment that rewards and encourages innovation for lifesaving medicines.
Tuckson from UnitedHealth Group, representing the payer perspective, stated that the nation has an impressive history of stimulating and translating innovation in health and medical care that has led to demonstrable improvements in relief of suffering, enhanced longevity, and reductions in mortality. As new knowledge, pharmaceuticals, and technologies become available, he asserted, it is essential that the science, infrastructures, and processes that inform their translation into practice be responsive and robust.
The context of unsustainable healthcare costs and related rates of uninsured people, unacceptable deviation of care delivery from evidence-based standards, inappropriate use of expensive healthcare assets, and safety concerns exert significant pressure on all stakeholders to make responsible choices regarding the incorporation of new healthcare assets.
How to get better value healthcare
Health plans, given their responsibility to organize affordable access to healthcare services on behalf of consumers and their desire to work with care providers to improve quality and appropriateness in care delivery, have special opportunities and responsibilities in this regard, continued Tuckson.
He additionally explored some of the perspectives, tools, and requirements necessary to advance responsible use of new innovations in service to the American people. Coverage and reimbursement decisions Steven D. Pearson of the Institute for Clinical and Economic Review suggested that coverage and reimbursement policies are among the most visible tools by which public and private payers in the United States seek to enhance the value of healthcare delivery. He stated that another element considers how payers use evidence, both scientific and contextual, for distinguishing among healthcare interventions.
Several specific examples were discussed in detail, and three overarching goals among these efforts were highlighted: This final session on approaches to improving value focused on changing the organization and structure of care to improve value. Electronic health records Focusing on the definitions and evidence on the value of electronic health records EHRs , Douglas Johnston from the Center for IT Leadership discussed the central issues associated with measuring and realizing this value.
To help frame the review of evidence on EHR value, he started by defining the types of value that widespread adoption of EHRs might produce, and reviewed basic and advanced EHR functions within the context of healthcare information technology. Johnston examined selected empirical evidence of the quality, safety, and financial impact and costs of EHRs, considering examples from case studies and the peer-reviewed literature.
Projections of potential EHR value based on this evidence were reviewed, as were other areas of possible value for which no evidence is currently avail-. The session concluded with an overview of some of the issues associated with EHR value measurement and realization, including the current state of EHR adoption, development of valid measures, definition of best practices, unintended consequences of EHR use, misalignment of incentives, access to capital, and the development of data standards.
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Patient-centered medical home Arnold Milstein from the Pacific Business Group on Health posited that if medical homes deliver better quality without increasing total healthcare spending, they will generate social benefit. Continuing, he argued that social benefit will also increase if medical homes shift physician payment toward primary care.
However, for medical homes to profoundly benefit non-affluent adults who do not qualify for Medicaid and persuade most purchasers to pay higher medical home fees, they must also lower total near-term healthcare spending. His observation of four such practices suggested that these design features are likely to enhance, rather than conflict with, current principal medical home quality objectives of improved access, patient-centeredness, and effectiveness of care.
He suggested that while medical homes cannot alone solve our healthcare affordability challenges, they can substantially reduce total near-term healthcare spending in addition to elevating the quality of care.
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Milstein stated that roughly 60 million uninsured and underinsured lower-income Americans need physician and health plan leaders to jointly pursue this higher aspiration for medical homes. Otherwise, their numbers and preventable health deterioration will continue to mount. Disease management Tracey A. The presentation outlined this evolution and highlighted case studies from both public and commercial populations that demonstrate the significant value of population health improvement. This concluding session discussed how the health system could be better aligned to promote value in all aspects of health care, both now.
Cassel of the American Board of Internal Medicine considered the future in two dimensions: In conclusion, a panel comprised of Ezekiel J. Nussbaum from Wellpoint, Inc. Rother from AARP closed the workshop by drawing together themes and conclusions from the meeting on how the health system could be aligned to promote value, in terms of both improvements that can be achieved within the existing system and the longer-term changes that need to be made.
The panelists discussed the importance of health information technology in enabling changes in the healthcare system and the pivotal role that reliable, quality data will play in transforming the current system into a value-based system. Focusing on long-term goals, the panelists echoed previous presentations by highlighting the continued need to reorganize both the payment system to reward outcomes over volume and the clinical care delivery system to better facilitate management of chronic illnesses.
Health information technology Since promoting health information technology was the most commonly mentioned priority as a prerequisite for sustained progress toward greater value in health care improving quality, monitoring outcomes, clinical decision assistance, developing evidence, tracking costs, streamlining paperwork, improving coordination, facilitating patient engagement , how might Roundtable members and the Electronic Health Record Innovation Collaborative help accelerate its adoption and use?
Transparency as to cost, quality, and outcomes What efforts by the various sectors represented by Roundtable members—patients, providers, healthcare delivery organizations, insurers, employers, manufacturers, regulators, the information technology sector, and researchers—might help bring about the true transparency necessary to sharpen the focus on the key elements of the value equation? Life-cycle evidence development for interventions How might Round-table professional societies, manufacturers, insurers, and regulators help transform the process of monitoring the value achieved from various interventions from what amounts to a snapshot in time to an ongoing capacity?
Value-based insurance design How might the conditions be identified that may be best suited to further testing the notion of adjusting payments to the level of evidence in support of the effectiveness and efficiency of a particular approach? Outcome-focused bundled payment approaches What means might best be considered to identify conditions and services most amenable as bundled components in payment-for-outcomes approaches? Value-based payment or reimbursement structures How might better information be developed for tailoring payment for care to the likely value of the outcome, and once available, what strategies will be most effective in developing the information and incentives necessary for its promotion?
Care organization incentives What issues and incentives are needed to expand the development of a medical home model most conducive to more efficient and better-coordinated care? Clustered care for the very sick If, as was presented, there are demonstrated effectiveness and efficiency advantages from certain organizations specializing in the care of the poor and very sick, how can that model of heroism be taken to scale?
Incentives for triage and coordination functions Because the ancillary services of triage, care coordination, and follow-up are so key to improving outcomes and reducing costs, what can be done to introduce them as a routine into the culture of care? Decision assistance at point of choice With growing awareness of the challenges to providers of keeping up with changes in the knowledge base, what might the Roundtable do to explore expanded decision assistance at the point of choice?
Appropriateness score for five important diseases Since five conditions— heart disease, cancer, stroke, diabetes, and chronic lung disease—account for three-fourths of health expenditures, can an appropriateness of care score be developed and applied for their management? Structured information-sharing on high-value services How might insights and information generated on services identified as high value be disseminated most effectively to help inform and motivate patients?
Purchasing models focused on outcomes Since it was proposed by a representative of the manufacturing sector that consideration be given to the development of product purchase models that focus on actual outcomes i. High-value service gaps Because some high-value services—for example, certain preventive services—are underutilized, what criteria might be used to develop an inventory of the top 10 services for which the gaps between evidence in-hand and delivery patterns are most substantial?
High-cost service evidence Similarly how might an inventory be developed of the top 10 high-cost services for which comparative effectiveness studies need to be done?
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Capacity for comparative effectiveness research What additional issues need to be engaged to improve prospects for the successful development of a deeper national capacity for comparative effectiveness research? Analytics for value assessment What are the most important analytical challenges to assessing value and how might they best be engaged, especially with healthcare costs reaching near crisis levels in the context of a weak economy?
Projected financial spending in the long run. Washington, DC, July 9. Technology, health costs, and the NIH. The implications of regional variations in Medicare spending. The content, quality, and accessibility of care. Ann Intern Med 4: IOM Institute of Medicine. To err is human: Building a safer health system.
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Hidden costs, value lost: The National Academies Press. Building a value-based health care system. Washington, DC, April The boomers are coming: A total cost of care model of the impact of population aging on health care costs in the United States by major practice category. If plotted on a graph, the curve of health gain is a hump: Value, though, means different things to different people. Payers, patients, clinicians, managers and industry all have their own perspective. There are dictionary definitions of value and numerical definitions of value. As well as attempting to understand and reconcile these differences, Muir Gray has created a series of single-page aides-memoire to help managers and payers achieve better value health care.
One failure of health care is the burden of information on health professionals. The complex thinking that helps determine value in health care is compressed into less than a hundred short, simple pages. For time-strapped professionals without the patience for even these few words, or those with a hunger for more, there is an associated radio station http: National Center for Biotechnology Information , U.
J R Soc Med. Reviewed by Kamran Abbasi. Author information Copyright and License information Disclaimer. Open in a separate window.