Study Finds That Costs Dropped, Outcomes Improved for Major Causes of Death and Illness Between 1995 and 2015

What’s Been The Bang For The Buck? Cost-Effectiveness Of Health Care Spending Across Selected Conditions In The US

Spending for six of the top seven causes of death and disease over the last 20 years was both cost-effective and improved patient outcomes, according to a study published in the January 2019 issue of Health Affairs, a leading health policy journal. The research addresses concerns about the rising cost of health care in the United States and the costs associated with innovative treatments by measuring whether — when considering inflation and disease prevalence — the cost of treatment for the top conditions associated with disability and mortality actually became costlier over time.

Researchers at the National Pharmaceutical Council (NPC) and RTI Health Solutions examined health spending on prevalent chronic conditions from 1995-2015 to determine the estimated changes in the cost and burden of disease (in terms of morbidity and mortality) over time. The conditions analyzed included ischemic heart disease; cancer of the trachea, bronchus, or lung; breast cancer; HIV; cerebrovascular disease; chronic obstructive pulmonary disease (COPD); and diabetes. With one exception COPD there was an increase in benefits across the board as measured by disability-adjusted life-years.

While medical costs, in aggregate, are growing, the Health Affairs analysis found that disease prevalence and general inflation account for a significant portion of cost increases. For example, for lung cancer, heart disease, stroke and HIV, an improvement in health was coupled with a decrease in spending when adjusted for inflation. The findings underscore the need to correct for changes in disease prevalence and inflation over time to understand the true drivers behind health care spending.

“The study clearly demonstrates two truths about health spending,” said NPC Vice President of Research Michael Ciarametaro, MBA. “First, investing in medical care can create enormous value for a society. For example, per-patient spending on lung cancer dropped more than $10,000 between 1995 and 2005, even as the average patient lived longer and healthier lives. Second, when we think about rising health costs, rather than blunt approaches that target all spending, we need policies that enable a disease-based approach focused on conditions where increasing costs are not justified by associated health gains.”

The new research carries several implications for future health policy. First, it emphasizes the importance of adjusting for changes in inflation and in disease prevalence in future funding and legislation to prevent undue attention on disease areas where per-patient costs are well-controlled. Focusing solely on total rising costs may lead to misguided policies. The research also illustrates that for some diseases, additional spending is both cost-effective and a source of high value creation. This underscores the need to tailor future cost-management strategies specifically for diseases where increased spending is not leading to substantial benefits.

“There is clear and well-placed concern about the rising cost of care, as well as the impact of high-priced innovation,” said David Wamble, PhD, MBA, Senior Director, Health Economics, RTI Health Solutions. “This research helps us understand what’s driving spending at a deeper level so that we can move toward a high value health care system.”