Going Below the Surface E-newsletter: November 2018

We hope you were able to relax and enjoy the Thanksgiving holidays and not get into heated health policy debates at the dinner table. If you did manage to solve the challenge of how to address health care spending during your discussions, however, please let us know so that we can share it via this e-newsletter and on social media using #GoingBelowTheSurface.

Digging Deeper

We often use the phrase “health care system” to suggest a well-defined world of patients and medical interventions. But two articles this month serve as a reminder that the edges of the system are not always well defined. The first article serves as a crucial reminder of the way that social determinants of health shape our outcomes, and the second article looks more deeply at how we measure value in the system, with an important warning about assuming that all patients are the same … or value the same things.

Looking Beyond Medicine to Social Services to Improve Population Health Outcomes

Health is about far more than access to the most cutting-edge medicines; social determinants — conditions in the places where people live, learn, work and play — also have an enormous role in keeping both individuals and populations healthy. Yet, in the United States, spending on social services as a percentage of gross domestic product is below the average of other developed countries. That may help explain the paradox of health care in the United States, where the world’s highest rate of medical spending has not translated into better outcomes. Writing in the Journal of the American Medical Association (JAMA), University of Pittsburgh Medical Center researchers suggest that recent government efforts, as well as more aggressive investment in social services, may help turn the tide. “This broadening of the nation’s vision of health to include social well-being as well as medical care increases the likelihood of achieving better health outcomes for more people in the United States,” the JAMA article concludes.

Why It Matters: Efforts to solve issues of high health spending in the United States often focus on pitting one medical intervention against another, but the problem — and the solution — may require a more holistic view of not only the health care system, but also the social determinants of health. It also will require a broader understanding about how to pay for what matters most in improving health care outcomes. This is no longer just an academic discussion. The JAMA article lays out the groundwork now in place to accelerate investments that are likely to have long-term benefits in both costs and spending.

QALY Calculations Stacked Against Persons With Disabilities

This year has seen the quality-adjusted life year (QALY), long a staple of the academic community, gain public attention, most notably via CVS’s announcement that it would use a QALY-based system to exclude new medicines from its formulary. But one of the longstanding critiques of the QALY is surfacing, too: The measure is often intrinsically biased against those with disabilities, who are concerned that the disability weighting or utility calculation will, by definition, value nondisabled lives over disabled lives. That viewpoint received a thorough look this month on the Health Affairs Blog by patient advocate Ari Ne'eman, who wrote: “People with disabilities deserve better than to be held hostage in the growing fight between payers and pharmaceutical manufacturers.”

Why It Matters: There is an increasing interest in “objective” measures of value, such as those defined by the QALY. But Ne'eman’s post is a reminder that the QALY has severe shortcomings, and an inability to unearth — and correct for — those failings will have profound consequences for certain patient populations.

What We’re Reading in the Journals

In this month’s round-up of peer-reviewed journal articles, the verdict is still out as to which payment incentives and programs are driving improvements in the quality of patient care and outcomes and lowering costs. States are serving as learning incubators for many of these programs; part of the challenge is getting these programs effectively aligned among health care providers, payers and consumers. Another potential payment model suggests that we take a subscription-based approach like Netflix. With that, chill on your sofas and check out the latest from the journals.

  • Aligning Patient and Physician Incentives. Navathe AS, et al. October 23, 2018. JAMA. As payers pursue mechanisms to increase the value of health care, there is a lack of alignment between consumer benefit design and physician quality bonuses. The authors suggest "simple changes" to "generate synergies that help patients, physicians and insurers achieve greater improvements in population health."
  • The Evidence on Pay-For-Performance: Not Strong Enough on Its Own? Delbanco SF, Lehan M, Murray R. October 24, 2018. Health Affairs Blog. There is scant evidence showing that pay-for-performance models — which use financial incentives and penalties to encourage hospitals, physicians and other providers to meet performance standards — are working to improve patient outcomes and lower health care costs. The authors suggest that pay-for-performance models could have more impact if they are used in conjunction with other payment mechanisms.
  • Can The Health Care Cost Trajectory Be Tamed? States’ Leaders Tackle The Cost Conundrum. Riley T. November 1, 2018. Health Affairs Blog. States have finite budgets and recognize the need to address the growth in health care spending, largely attributed to the price and intensity of health care services. In response, states have implemented a range of health care cost containment and oversight tools and are continuing to measure and improve on these efforts to tame spending.
  • Alternative State-Level Financing for Hepatitis C Treatment — The “Netflix Model.” Trusheim MR, Cassidy WM, Bach PB. October 29, 2018. JAMA. The authors ponder whether a monthly, subscription-based payment model — a la Netflix — could work in financing payments for curative therapies like those for Hepatitis C.

Dialogues on Health Care Spending

This month, we’re thankful that the thoughtful dialogue about health care spending is continuing in a variety of communications channels, from journals and social media to conferences and around the water coolers.


About Going Below the Surface The Going Below the Surface initiative was launched by the National Pharmaceutical Council in 2018 to broaden and improve the conversation around how health care resources are used in the United States. The initiative is aimed at better understanding the roots of the nation’s health spending and investments by promoting a discussion that is firmly based in health policy and systems research. Our goal is to provide clarity on how best to optimize health care spending so that patients receive the right care while simultaneously providing the right incentives to sustain next-generation innovation to improve patient well-being and health system efficiencies.

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