Elements of Value

Evaluating the true societal value of prescription medicines and medical services requires a comprehensive approach to measuring value. To achieve this, value assessments must capture less tangible, patient-centered measures such as improvements in quality of life, productivity and caregiver burden.

Why we need a comprehensive definition of value

In response to rising health care spending, there has been growing interest in measuring the value of health care treatments and services in the United States. As a result, multiple organizations in the U.S. have developed value assessment frameworks to assist patients, clinicians, and payers as they assess the relative value of healthcare treatments and services. However, for health care decision-makers to assess the true societal value of prescription medicines and medical services, a comprehensive approach to measuring value must be used. This includes incorporating less tangible, patient-centered outcomes often referred to as “indirect benefits,” such as improvements in quality of life, productivity and caregiver burden.

Failure to account for improvements in indirect benefits like productivity or quality of life may lead to the undervaluation of a treatment that a patient feels is high value.

Underestimating the value of treatment could have substantial consequences for patients today, as they may struggle to gain access to needed medications, and tomorrow, as underestimation of new therapies may lead to undesirable market incentives for continued innovation.

Capturing what matters most to patients

Value assessment tools can be one of many important inputs that health care decision-makers consider when making complex decisions related to health care services and treatments. But now that value assessment frameworks are being used more often in health care decision-making, it is critically important that frameworks incorporate the elements that matter most to patients. Patients’ clinical characteristics and preferences vary considerably, and therefore assessments of value should not be one-size-fits-all.

An NPC study published in 2020 assessed patient preferences for aspects of breast-cancer treatments to evaluate the usual assumptions in scoring rubrics for value frameworks. The goal was to test an assumption underlying the most commonly-used oncology value frameworks: that patients view treatment outcomes the same way.  Current frameworks use formulaic or expert-driven scoring procedures with pre-specified treatment attributes, which do not resemble the tradeoffs that patients would be willing to make between these outcomes.

The study found that while life extensions with treatment were considered to be most important, patients priorities and preferences varied and patients also assigned great value to out-of-pocket cost of treatment, treatment route of administration, and the availability of reliable tests to help gauge treatment efficacy. Although value frameworks can be an important step in the routine evaluation of medications for a complex treatment plan, frameworks are still largely driven by the views of medical experts and fail to consider how patients view the effectiveness of a treatment.

Accounting for productivity is key

For value assessments to comprehensively capture value, they must include the full balance of costs and benefits to patients and society. Unfortunately, productivity is a key component of value that’s often overlooked by current U.S. value assessment tools. Capturing productivity in value assessment is critical, as a treatment’s ability to improve a patient’s productivity has substantial downstream consequences that affect not only the patient and their family, but often their employer and their broader community.

For example, the onset of a new health condition, or the deterioration of an individual’s health status, can affect an individual’s performance in the workforce or result in inefficient work or missed days from work. Medical treatments can have a positive or negative effect on an individual’s health status and can therefore have either a positive or negative effect on an individual’s productivity. Employers are often responsible for providing health insurance coverage for their employees, and in some cases must reallocate staff or train new hires to account for an ill individual’s time away from work. Therefore, any loss in productivity due to health comes at a cost to both the individual and his or her employer.

NPC research published in the Journal of Managed Care & Specialty Pharmacy found that including non-health care costs like productivity in value assessment frameworks can change the value assessment of interventions, impact payer coverage decisions, and subsequently influence patient access to needed treatments and services.

NPC researchers reviewed value assessment reports of pharmaceutical interventions published between March 2017 and July 2019 by the Institute for Clinical and Economic Review (ICER). The analysis shows several key points on the inclusion of productivity in value assessment frameworks:

  • Productivity was included in most, but not all, value assessment reports issued by ICER (18/19 reports, 94.7%), but usually in a scenario analysis (2 reports, 11%) rather than a co-base case analysis (16 reports, 88%)
  • Excluding productivity underestimated the value of an intervention for 90% of the treatment comparisons. However, the magnitude of the change in value varied.
  • Productivity could change health care decisions and patient access to medications, but the extent depends on how a payer chooses to use value assessment reports and whether they use commonly used thresholds to determine which treatments are “good value.”

When productivity is not included in assessments of value, the value of a health intervention is often underestimated. After including productivity, the value estimate may change by up to 80%.

Challenges to capturing indirect benefits

In a study published in the Journal of Occupational and Environmental Medicine, researchers at NPC and RTI Health Solutions explored how institutional barriers prevent the inclusion of indirect benefits from being considered when assessing the value of medical treatments and making health care coverage determinations.

Researchers surveyed U.S. health insurance providers, pharmacy benefit managers, employee benefit consultants and employer groups about their perspectives on the barriers and solutions to evaluating four indirect treatment benefits: absenteeism, presenteeism, caregiver burden and quality of life.

Survey results showed that the inclusion of indirect benefits was of less importance to payers, but of higher importance to employer stakeholders, particularly for absenteeism.

The study identified key barriers to collecting and incorporating data, including:

  • The lack of a standardized approach to capturing and validating data
  • It is difficult to establish cause-and-effect between treatment and indirect benefits
  • Payers and purchasers lack resources to collect and analyze such data
  • Insurers don’t consider productivity to be actionable
  • Health plans generally don’t include productivity data in P&T assessments
  • Concern among purchasers that indirect measures are too generic and not company or industry specific

Opportunities to improve the measurement of indirect benefits

In a blog published in Health Affairs, NPC researchers identify several opportunities for capturing and improving integration of indirect benefits in health care decision-making, including:

  • Guideline bodies need to establish clear standards for measuring the value of indirect benefits by gathering data through clinical trials.
  • Industry needs to generate data on product-specific indirect benefits using clinical trials and peer-reviewed literature.
  • Payers and purchasers need to make payment decisions that reflect what matters to patients and their families by using the gathered data to inform their decision-making process.