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Business of Pathways

Broadening the Value Assessment Paradigm: Including the Value of Hope and the Value of Insurance

Authored by

Sean McElligott, MS1; Ira Klein, MD, MBA, FACP2—Column Editor

Affiliation

1Market Access, Scientific and External Strategy, Janssen Pharmaceuticals, Titusville, NJ.

2Healthcare Quality Strategy, Strategic Customer Group, Janssen Pharmaceuticals, Titusville, NJ.

Disclosures

Dr Klein owns stock in Johnson & Johnson and Aetna, Inc and is an employee of Janssen pharmaceuticals. Dr McElligott owns stock in Johnson & Johnson and is an employee of Janssen pharmaceuticals. 

Citation

J Clin Pathways. 2019;5(8):31-32. doi:10.25270/jcp.2019.10.00100

While social media is all about sharing, very little personal preference data makes its way into health plan contracting around specific interventions and pathway programs today. As a result, the impacts of the value of hope and the value of insurance are left out of the discussion. This dichotomy, between a health sector perspective that only valuates fungible assets (eg, the cost of a drug or a hospital bed day) and a societal perspective that valuates a more holistic set of measures, is an issue that must be addressed in order to further the overall debate on the meaning of health care in the United States.


A hallmark of the social media era is its dramatic increase of personal information sharing between individuals as well as between individuals and corporations. This includes habits, preferences, and “likes.” Commerce around consumer goods and services has been forever altered by the intake of massive amounts of personal information at individual and population levels, with the insight-driven outputs providing recommendations on what to wear, eat, do, and value based on our revealed preferences.

At the same time, the health care insurance world has high-deductible health plans with health savings accounts as one of its fastest growing benefit designs. They feature “choice” in the form of economic carrots and sticks for selecting and paying for certain services, presumably also related to personal habits, preferences, and “likes.” Some of these offerings, including provider network services, have themselves contracted with the same health insurance company for condition management pathways programs, deployed at an individual and population level. But do any of these pathway programs have analogous habits and preferences integrated in their metrics in the form of appealing to what values matter to individual patients beyond population level measures of quality and outcomes in a value-based contract? Few today do—a state of affairs the authors would like to see change.

Where the Disconnect Is

The root of this disconnect—between what people want as value in health care and what is measured today—can be traced back to a split between the societal perspective and the health system perspective. Pathways programs grew up with a health system perspective, having the definition of value as being outcomes delivered divided by direct costs accrued. Both outcomes and costs were defined as direct factors of a disease and care delivered for that disease. This included measurable parameters such as cost of drugs, hospitalization, lab and radiology testing, physician, nursing, other health professional care, etc. Avoidance of costs, or shifts to lower cost services, with upholding of basic outcomes measures such as survival, disease remission, and adherence to evidence-based medicine protocols, became the basis for calculating pathways savings and value improvement. The traditional attributes of value, in the form of cost-effectiveness and some elements of condition burden, are preserved here, but not much more is included.

As

What about the societal perspective? Other attributes of value that economists agree upon are not generally measured in pathway programs, eg, measures of improved productivity, reduced burden on caregivers, and others, even though they could have significant long-term impact for populations.1 These attributes of value are tied to the societal perspective of health care. Ironically, despite the oversharing by society of our personal preferences in the social media space, these elements are largely not captured for health insurance plan use. Specifically, we would like to focus on the following two missing elements: the value of hope and the value of insurance. These are not imputed into the overall value equation for most health economics outcomes analyses of a pathway program, a surgical intervention, or a drug therapy application. There is broad support in the health economic community for inclusion of these additional elements of value (see, ISPOR “flower” in reference source).2

The Value of Hope and Value of Insurance

Briefly, the value of hope is the benefit that patients derive from being able to take a chance at being able to get better, ie, being able to purchase a health lottery ticket through treatment. The value of insurance is derived from the comfort one gets while healthy knowing that, if they do become ill, there are potential treatments, or cures, for that disease. For instance, if there was a cure for Alzheimer disease (AD) it would be the value a person derives knowing that there was an existing cure for this devastating disease, although they may never actually get AD. The existence of both has been well established in health and behavioral economics.2-5

The value of hope and insurance for health care interventions can be derived through fuller quantification of the distributions of health states when patients are sick and after they have received a treatment.3 These values can be estimated with higher statistical moments beyond mean effects from patient-level data from randomized controlled trials, for instance. (The theoretical derivation to support these estimations is beyond the scope of this piece, the reader may consult the reference list for expanded discussion.2,3) Omitting these aspects of value can lead to errors in the valuation of the impact of certain health care interventions, both positively and negatively. For instance, health interventions that give a small probability of much longer health can have positive values for hope or insurance compared to those that give a larger probability but lower chance of longer life, depending on the shapes of the treatments’ effects distributions.3 Societal preferences for cures over chronic treatment may be partially captured by these aspects of value that, to date, have not been included in most health care valuation exercises.

Future valuation of health care interventions should attempt to capture most of these identified additional aspects of value. Their inclusion will reflect more accurately patients’ and societies’ preferences for risk-seeking and aversion in their health care choices. Exclusion will lead to errors in understanding the full value of medical interventions and create bias in treatment pathways and coverage decisions.

Conclusion

The advent of social media and collection of people’s “likes” has created a way to recommend consumer goods based on revealed personal preferences. In many ways, as medical science advances to improve the lives of patients through better treatments and cures, so should the science of valuation. This will create a more accurate way to value and inform decision-making around treatment pathways and appropriate coverage for existing therapies and cures. These considerations are not only important for existing patients but also serve a crucial role in setting appropriate incentives for innovations for future patients. Medical interventions that provide more hope to patients who are sick and reassurance to patients who are healthy and may become sick are important to inform treatments and reflect overall societal preferences now and in the future.

References

1.    Drummond MF, Neumann PJ, Sullivan SD, et al. Analytic considerations in applying a general economic evaluation reference case to gene therapy. Value Health. 2019;22(6):661-668. doi:10.1016/j.jval.2019.03.012

2.    Lakdawalla DN, Doshi JA, Garrison LP Jr, Phelps CE, Basu A, Danzon PM. Defining elements of value in health care: a health economics approach: an ISPOR Special Task Force Report. Value Health. 2018;21(2):131-139. doi:10.1016/j.jval.2017.12.007

3.    Garrison L, Phelps CE, Chapman R, Klein I. Value Assessment: Next-Gen Cost-Effectiveness Analysis Needed? Presented at: 8th Conference of the American Society of Health Economists; June 24, 2019; Washington DC. https://ashecon.confex.com/ashecon/2019/webprogram/Session3195.html.

4.    Garrison LP Jr, Kamal-Bahl S, Towse A. Toward a broader concept of value: identifying and defining elements for an expanded cost-effectiveness analysis. Value Health. 2017;20(2):213-216. doi:10.1016/j.jval.2016.12.005

5.    Lakdawalla DN, Romley JA, Sanchez Y, Maclean JR, Penrod JR, Philipson T. How cancer patients value hope and the implications for cost-effectiveness assessments of high-cost cancer therapies. Health Aff (Millwood). 2012;31(4):676-82. doi:10.1377/hlthaff.2011.1300

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