On Sept. 11, Health Affairs, the National Pharmaceutical Council and several Going Below The Surface partners convened more than 350 health policy leaders in Washington for “Health Spending: Moving From Theory To Action,” a research-driven event aimed at exploring potential solutions to rising U.S. health spending.

Over the course of the day-long event, attendees examined system-wide “top-down” approaches and “bottom-up,” point-of-purchase strategies that are being used by organizations and local governments to address the unsustainable growth in health spending.

Digging Deeper

 Let’s dig deeper into the insights gleaned from two of the panels at the meeting.

A System-wide Approach to Better Spending: Looking at North Carolina

During one of the conference’s panels, North Carolina Secretary of Health and Human Services Mandy Cohen, MD, MPH, and Blue Cross and Blue Shield of North Carolina President and CEO Patrick Conway, MD, showcased how their organizations are using top-down strategies to shift the majority of the state’s prepaid health plans toward value-based payment models.

Both leaders issued a common call-to-action: health insurers must more aggressively pay for value, consumers must be engaged, and providers must adapt to a world without fee-for-service. A key component of their collaboration centers on large investments in the social determinants of health and data analysis to identify the right intervention, for the right patient, at the right time, that will improve overall population health. “I don’t want box checking,” Cohen said. “I want health.”

Why It Matters: While some states have pushed for regulations that increase negotiation power or boost transparency, North Carolina is a case study for a more systemic approach to tackling health spending under budget constraints. To dig deeper into North Carolina’s strategy, check out our recent blog post here.

Point of Purchase Decision-Making: Getting Employers Off the Sidelines

The case for bottom-up strategies was made during a separate panel moderated by the National Pharmaceutical Council’s chief science officer and executive vice president, Robert Dubois, PhD, MD. Among the approaches discussed, Dr. Dubois and panelists explored the roles of payers, employers and health technology assessment (HTA) organizations in the decision-making process to reduce low-value care at the point of purchase.

The increasingly important role of employers in bottom-up strategies was central to the panel’s discussion. Elizabeth Mitchell, president and CEO of Pacific Business Group on Health, described the “outrageous price increases” for low-value services that have driven employers to become more involved in direct negotiations with providers to set incentives, reduce barriers and support greater care integration.

Panelists also debated the use of HTAs as a component of medical benefit designs, exploring potential benefits and pitfalls of cost-effectiveness analyses in the U.S. health care system. Dan Ollendorf, PhD, director of value measurement and global health initiatives at the Center for the Evaluation of Value and Risk in Health (CEVR) at Tufts Medical Center, predicted that such tools will become more prevalent and useful in the U.S. if applied appropriately, including scenarios to better understand breakthrough therapies, monitor unmet needs for public health burdens, and anticipate potential budget overload.

Why It Matters: All health care stakeholders, including payers, manufacturers, providers and employers, have a role to play in the reduction of low-value care. Efforts to incentivize and reward high-value care are underway, but greater collaboration, consensus and action is needed to understand trade-offs and eliminate wasteful spending in the U.S. health care system.

What We’re Reading

This month, several journal articles examined different aspects of health care spending – low-value care in the military health system, population health management and state legislative activities. Here, we take a closer look.

Assessing Low-Value Health Care Services in the Military Health System
Koehlmoos TP, Madsen CK, Banaag A, Haider AH, Schoenfeld AJ, Weissman JS. Aug. 2019, Health Affairs

It doesn’t matter if a health care system is driven by fee-for-service incentives or the U.S. military’s direct care payments. Researchers found that treatments recognized as no or low-value—such as the use of antibiotics for colds and MRIs for low back pain—are prevalent across different types of health systems and are a factor in wasteful health care spending.

Population Health Management: Saving Lives and Saving Money?
Jha AK. Aug. 6, 2019, JAMA

Harvard’s Ashish K. Jha, MD, MPH, writes, “Although the literature leans toward health benefits of (population health management) interventions, there is little to no evidence that PHM actually reduces total spending. Although some interventions may be cost-effective, they are almost never cost-saving… As health care organizations and policy makers continue to invest in PHM, they should do it for the health benefits, not because it will save money.”

The State of State Legislation Addressing Health Care Costs and Quality
Murray R, King JS, Delbanco SF, Lehan M. Aug. 22, 2019, Health Affairs Blog

As states confront budget constraints on health care spending, some are turning to legislative action as a way to tackle costs and quality. An analysis of state laws shows that these fall into five general categories: price transparency, benefit design, provider payment, provider networks and market power.

Dialogues on Health Care Spending

We’re pleased that there’s a healthy dialogue going on around #HealthSpending and it was even a trending hashtag on Twitter in DC during the Sept. 11 event. Let us know what you’re hearing – drop us a line or share via social media using #GoingBelowTheSurface.

  • What are some of the tough questions that we need to consider about health care spending? We asked several health policy experts for their thoughts. Watch the video.
  • Alliance of Community Health Plans President and CEO Ceci Connelly revisits some of the tough questions posed during her panel at the “Health Spending: Moving from Theory to Action” event, making the case that it’s time for the health care sector and policy world to get serious about creating incentives that drive and reward value. Read her perspective.
  • This month, the “Considering Health Spending” series in Health Affairs included articles on the costs and benefits of gene therapies, market-based price caps and the relationship between health and social spending in high-income countries, among others. (Note: The series is funded by the National Pharmaceutical Council and Anthem, Inc.)

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