No matter which holiday you celebrate, we hope you’ll have some down time to relax with friends and family this month. There will be plenty of health care spending issues to talk about and tackle next year; we could all use a break to get ready. Cheers to a happy and healthy 2019!

Digging Deeper

This month, we saw two interesting perspectives on health system tradeoffs at both the micro level and the macro level. At the individual employee level, we highlight a white paper on a fascinating experiment that asked employees – not benefit managers – to consider the trade-offs needed to shape a health benefits package. And at the society level, the government released their National Health Expenditures data, which – setting aside whether 3.9 percent growth is “good” – reinforces the need for us to think hard about what priorities are reflected in the $3.5 trillion spent last year.

Taking Tradeoffs to the Consumer With an Employee-Designed Health Benefits Package

At first, it sounds like a great thought experiment to discuss around the coffee machine: what would happen if all the employees in an organization came together to collectively design their health benefits package? Would they create a super-expensive package? Dump dental to shave premiums? Opt for generous mental health coverage?

But staff at the American Speech-Hearing-Language Association had the opportunity to take it beyond a thought experiment, coming together with their head of human resources and experts from George Mason University to build their own health plan together via a set of structured interactions. The results from this effort, funded by the National Pharmaceutical Council, were published last month as a white paper.

In the end, employees traded more modest benefits for a lower premium and prioritized hospital care over expansive emergency services. But most important, 83 percent of those who participated, agonizing over the choices, were satisfied with the final outcome, a higher satisfaction rate than the national average.

Why It Matters: While the case study provided interesting data on what one group of employees chose to prioritize, the more intriguing conclusion was the unusually high satisfaction rate with the plan. Getting individuals to understand – firsthand – that the health system is loaded with tradeoffs was powerful enough to boost satisfaction without boosting costs.

National Health Expenditure Data Give 3.5 Trillion Reasons to Think About Tradeoffs

The Centers for Medicare and Medicaid Services published their annual deep dive on U.S. health system spending, announcing that the tab for 2017 came to $3.5 trillion, a 3.9 percent increase. By historical standards, 3.9 percent is a low growth rate, and it suggests that soaring growth prompted by the ACA coverage expansion may be behind us.

Spending on retail pharmaceuticals inched up only 0.4 percent, and out-of-pocket spending also saw muted growth: 2.6 percent. Hospital care was up 4. 6 percent, and physician and clinical services also grew at more than 4 percent.

Why It Matters: Despite the framing by policy experts as good news showing a slowing rate of growth, Americans managed to spend well over $100 billion more on health care in 2017 than in 2016, and asking how that $100 billion was invested – and where it could have been spent more wisely – is critical. That’s more than three times the budget of the National Institutes of Health.

To dig even deeper on the numbers, read related articles on the Health Affairs Blog and a perspective from NPC Chief Science Officer Robert Dubois, MD, PhD, on the Going Below the Surface website.

What We’re Reading in the Journals

Which peer-reviewed articles caught our eye this month? In our latest round-up, there’s a common theme around steps we can take to improve patient health outcomes and potentially reduce spending on overtreatment or low-value care.

  • Understanding and Improving Value Frameworks With Real-World Patient Outcomes. Jena AB, et al. November 13, 2018, The American Journal of Managed Care.
    A working group of health care experts outlines why “new value frameworks should incorporate real-world evidence that reflects patient treatment behavior, adherence to medication, and equity concerns arising from disparities in care.”
  • Talking About Costs: Innovation In Clinician-Patient Conversations. Ganos E, et al. November 27, 2018. Health Affairs Blog.
    Patient-health care provider conversations about treatment options and their potential financial impact are not happening on a regular basis. This study found that most patients want to have these conversations but are waiting for the providers to initiate them, and these dialogues do not add significantly to the length of medical visits. The study authors are working to develop tools to help health care providers address and overcome barriers to cost conversations.
  • Medical Overuse as a Physician Cognitive Error: Looking Under the Hood. Korenstein D. December 3, 2018, JAMA Internal Medicine.
    Could physicians who are more likely to assign low-value care be identified by characteristics like age, training or research activities? This study explored that possibility, but ultimately found little connection to physician characteristics, instead suggesting “that overuse drivers go beyond incentives and culture” and require deeper study.
  • Redistributing Investment in Health and Social Services—The Evolving Role of Managed Care. Shrank WH, et al. December 4, 2018, JAMA.
    Improving access to high-value care is just one part of reducing health care costs and bettering health outcomes. Managed care organizations, working in partnership with federal and state governments, are considering how to reallocate resources from medical to social services, such as family/child supports, disability, unemployment, and housing to improve health care.

Dialogues on Health Care Spending

Plan ahead for an important February event, curl up with your cup of hot cocoa and health spending reading and be sure to follow the conversation on social media using #GoingBelowTheSurface.

  • Paying for Cures: Join MIT and a full roster of leading health care experts for a conference on financing for curative therapies on February 12 at the National Press Club in Washington, D.C. View the agenda and register online today.
  • Considering Health Spending: Still haven’t gotten your fill of health care articles? Check out Health Affairs’ ongoing series, featuring more than 50 journal articles and blog posts examining a broad array of spending topics.

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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. To view the Going Below the Surface partners, visit www.goingbelowthesurface.org.

Join the conversation by following us on social media using #GoingBelowTheSurface or send us an email at contact@goingbelowthesurface.org.