When It Comes to Health Spending, How Can We Better Allocate Resources and Reduce Low-Value Care?

A webinar hosted by AcademyHealth and the National Pharmaceutical Council (NPC) delved into new research aimed at getting to the root of two vexing health care spending challenges – what could we do in the United States to better allocate our resources, and how can we ensure those resources are not wasted on low-value care.

“Our goal is to begin a very broad discussion about these types of very important issues,” said Robert W. Dubois, MD, PhD, NPC Chief Science Officer and Executive Vice President.

“How we spend our health care dollars and how we can spend them as wisely as possible are important questions.” The webinar, moderated by Fiona Grieg, PhD, Director of Consumer Research, JPMorgan Chase Institute, brought together Craig Mitton, BSc, MSc, PhD, professor and senior scientist, University of British Columbia, and Corinna Sorenson, PhD, MHSA, MPH, assistant professor, Duke University School of Medicine.

Dr. Mitton has undertaken work to examine the approaches taken by other countries to allocate health resources and how we could apply them in the United States; Dr. Sorenson is tackling how to address barriers to reducing low-value care. Both research projects are being funded by NPC, a health policy research organization leading an effort to bring together stakeholders in a broader initiative on health care spending and value.

The United States is not alone in facing challenges in how it makes value-based health care decisions and allocates its health care resources, but the structure of the US health system requires decision-makers to take different approaches. According to Dr. Mitton, comparable countries in Europe, along with Canada and Australia, tend to make allocations based on health system, or population-level decisions. Unlike the U.S., many of these countries have national health care bodies and specific or limited budgets, as well as other common traits.

“Every other comparable country uses population level trade-offs as part of resource management in health care. It clearly is different in the U.S.,” said Dr. Mitton.

“What specific lessons in terms of value assessment and prioritization are applicable to the U.S. context and how would they best be applied is an important question to answer.” When other countries make health care trade-offs, they utilize processes based on economic and ethical principles. They have a proven track record to shift resources and achieve better outcomes for a given amount spent, Dr. Mitton noted. Experiences elsewhere justify efforts to introduce priority-setting in the US system as a mechanism to achieve better value, but he said we would need to carefully consider the feasibility of doing so.

Dr. Sorenson explained that a lot of U.S. health care resources are being wasted on low-value care, described as unnecessary, ineffective, or even harmful care. Estimates suggest that roughly 20 percent to 47 percent of health expenditures are wasted on low-value care. There are a variety of persistent barriers that have been hampering our ability to reduce low-value care in the U.S., she said. To have an impact on low-value care, Dr. Sorenson noted that stakeholders will need to address economic barriers, such as reforming how we pay for care; professional barriers, as in changing physician practices in care; sociocultural political barriers, such as helping all stakeholders recognize that “less may be more” when it comes to certain types of care; and procedural barriers, like being able to identify, assess and draw awareness to low-value care, among others.

“We can make progress on most of these barriers. We need to think about getting more innovative in our approach rather than focusing on one type of barrier, stakeholder group or system,” said Dr. Sorenson.

“Cultural, social and political barriers are probably the most challenging to change.” The webinar is part of a broader health care spending and value initiative spurred by the National Pharmaceutical Council (NPC).

NPC, in conjunction with Anthem, is also supporting the “Considering Health Spending” series in Health Affairs’ journal and blog, along with a Council on Health Care Spending and Value to be chaired by former U.S. Senate Majority Leader Dr. Bill Frist and former U.S. Food and Drug Administration Commissioner Dr. Margaret Hamburg. Additionally, NPC has brought together a diverse group of organizations that are committed to tackling health spending challenges and finding solutions as part of the Going Below the Surface Forum.