This month brought us the end of an era – the Westeros era, that is – with the series finale of Game of Thrones. They say life imitates art, so of course we’ve found parallels between our favorite series and the subject of health spending. Much like the Battle of Winterfell, whose population came together to defeat the Night King, we in health care need to join in efforts to seek thoughtful, evidence-based solutions to address spending issues. There are no spoilers here, so we encourage you to read along and tweet using #GoingBelowTheSurface.

Digging Deeper

The complexity and all-encompassing nature of the health spending conversation can seem like it’s constantly calling into question everything that we thought we knew about health care. In the pursuit of innovative solutions, we’re often forced to come to grips with new understanding. This month, two important pieces ask us to question common wisdom and assumptions to shift our understanding and find new ways to move the health care sector forward.

Sometimes Intentions Aren’t Enough

Oncologists were among the first to adopt the term “financial toxicity” to highlight concerns over the impact of the high price of care on consumers, making efforts to control spending critical. But that’s a more intractable problem than it appears: a new study in Health Affairs found that a UnitedHealthcare program designed to financially incentivize physicians to use lower-cost generic drugs failed to change the behavior of doctors. It turns out that the physicians who used the new incentive program the most were already high prescribers of generics.

The authors suggest that the results “provide cautionary evidence of the limitations of voluntary payment reform initiatives.” That doesn’t mean that incentives are unimportant; the paper raises the possibility that mandatory programs or cooperation among multiple payers may have a larger impact.

Why It MattersThe phrase “misaligned incentives” has become a common refrain in the discussion about health spending, but this new research suggests that small changes in incentive structures are not necessarily enough to change entrenched behavior. The counterintuitive finding, too, is a reminder of the importance of research in answering key health spending questions, as it has become clear that assumptions that any one approach is a magic bullet must be tested.

Maybe the Grass Isn’t Always Greener

The idea that the United States spends more on health care and gets less in terms of outcomes as compared with other developed nations has hardened to conventional wisdom. It is frequently argued that this discrepancy in outcomes reflects the more financially challenging access that patients in the U.S. experience compared to countries with universal coverage — but the issue is far more complex.  In a just-released study in JAMA comparing life expectancies in Norway (which has universal coverage) with those in the U.S., at every percentile, individuals with a higher income experienced lower mortality rates — illustrating the strong relationship between income and health in both countries.

Harvard economics professor David Cutler, PhD, unpacked these findings in an editorial published in the same journal that digs deeper into the original research’s average life expectancy for both countries and calls into focus the underlying relationship between income and health.

Why It Matters:  Under Norway’s universal health care system, we often assume that health discrepancies by income level would not be as markedly different as the original research’s findings. However, Cutler calls into question that there is more to life expectancy than access to care, but rather other issues — notably disease risk factors and social determinants of health — that must be addressed to have real impact on health policy in the United States.

What We’re Reading

Sometimes when we take a closer look at the data, it tells us things that we weren’t expecting to find or that run counter to our conventional thinking. This month brought us three studies that challenge us to reconsider what we know about spending on primary care services, workplace wellness programs, and common medical procedures and tests.  

  • Primary Care Services Account for a Small Share of Medicare Spending
    Reid R, Damberg C, Friedberg MW. April 15, 2019. JAMA Internal Medicine
    Is there an optimal amount that we should be spending on primary care services under Medicare? RAND researchers found that it accounts for just a small fraction of the Medicare spend, even though “health system orientation toward primary care has been associated with higher quality.”
  • Effect of a Workplace Wellness Program on Employee Health and Economic Outcomes: A Randomized Clinical Trial
    Song Z, Baicker K. April 16, 2019. JAMA
    Workplace wellness programs have been touted as a way to improve employee health and decrease health care costs. This study took a closer look at employees at a large U.S. warehouse retail company and found that while employees in the program had greater rates of “positive self-reported health behaviors,” there “were no significant differences in clinical measures of health, health care spending and utilization, and employment outcomes after 18 months.” The study begs the question: Do we need to study these programs beyond 18 months, or are they not as beneficial as we once thought?
  • Past the Price Index: Exploring Actual Prices Paid for Specific Services by Metro Area
    April 30, 2019. Health Care Cost Institute
    When it comes to the prices for health care services paid by commercially insured individuals, there are differences both between and within markets. Across metro areas, the study found as much as a “25-fold variation in median prices of the same services,” such as c-sections and blood tests.

Dialogues on Health Care Spending

While a good portion of us may still be buzzing about the Game of Thrones finale, talk in health care circles has still been focused on how to address spending. Read an article that we should share or an event we should attend? Let us know!

  • The thoughtful “Considering Health Spending” series in Health Affairs continues with a slate of articles on topics including the challenges of high-deductible health plans and efforts to spend less through the use of generic oncology medicines. (Note: the series is funded by the National Pharmaceutical Council and Anthem, Inc.)
  • Since launching #GoingBelowtheSurface, we’ve worked with partners to publish research that takes a top-down, granular approach to evaluate our #healthspending, but work remains. We checked in with RTI Health Solutions Health Economics Director David Wamble (@DWamble) to get his perspective on the issue.

Conversations around health care spending in the US have long focused on questions of ‘How much do we spend?’ rather than delving deeper to ask, ‘How well do we spend?’ Let’s be strategic about health care spending. Specific disease spending approaches that show big improvements in patients’ health make sense to continue.”

-David Wamble, PhD, MBA
Director, Health Economics, RTI Health Solutions

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