Who We Talk About When We Talk About Value
The notion of value is at once one of the most widely invoked and variably interpreted in American health care. As our country looks to value-based strategies to improve how we provide care to the vulnerable, pay hospitals and doctors, offer insurance, and cover Hepatitis C drugs and Epipens, that apparent discrepancy should concern patients, physicians, insurers, policymakers and other stakeholders alike.
Emerging value-based policies are no doubt well-intentioned efforts to achieve better outcomes at lower costs. However, missing from many initiatives seems to be clear recognition about whose value ought to be prioritized -- that of individual patients or society overall. As the two examples below suggest, this matters, and we may ultimately fail to deliver on the full promise of value-based reforms unless they enable, and in turn reflect, open conversations among stakeholders about priorities, trade-offs, and value for whom.
Value of clinical care - for patients or society?
Doctors are charged with both prioritizing patients’ best interests and considering social good. While these commitments often align in clinical care, they can also conflict and create difficult tradeoffs. How should physicians act when the interests of individual patients (e.g., who may insist on personal grounds on receiving diagnostic imaging for uncomplicated back pain) and society (e.g., which bears the costs of widespread low-yield imaging) are at odds?
The growing focus on value will likely heighten this tension. On the one hand, physicians are urged to deliver patient-centered care, and increasingly measured on related metrics such as patient satisfaction. On the other, national campaigns and value-based payment policies – for example, Accountable Care Organizations, bundled payment – stress clinicians’ broader responsibility over resource utilization.
Because it’s hard to argue against the importance of either prioritizing patient needs or controlling runaway health care spending (particularly when the appropriate spending allows more patients to access care), it’s not surprising that many providers believe it’s unfair to ask physicians to be both cost-conscious and concerned with welfare.
Value of pharmaceutical drugs - for patients or society?
A prevailing narrative in the reaction to high pharmaceutical drug prices is that pricing often reflects greed rather than true value. In turn, value-based pricing has emerged as a potential solution with a straightforward premise: pegging drug prices to the outcomes and benefits they confer can safeguard against bad behavior by pharmaceutical companies and benchmark appropriate prices for consumers to pay.
Without a clear understanding of who this value proposition benefits, however, the pursuit may prove challenging. Fundamentally, value-based pricing is a “social yardstick” that can prevent outlandish price-setting by monopolist companies that face no competitive pressure or restrictions. However, value-based prices are an external construct of societal appropriateness, and do not reflect appropriateness as defined by individuals’ market purchasing decisions. In turn, value accrued to society overall may not necessarily reflect value to any one group or individual.
This dichotomy between individual and societal value is evident in the methods used to calculate value-based prices. These analyses are inherently tethered to the economic value ascribed to one year of life -- an issue that, to date, has not made its way into the national discourse about drug costs. To the degree that individuals vary in how highly they value certain drugs and related health outcomes, there may not be one single value-based price for all patients for a given drug. Discussion is needed to identify variation and avoid misrepresenting the social values of American patients via calculations using estimates from other countries.
These two examples underscore the same central points: that the impact of new value-based initiatives relies in part on clearly defining who stands to benefit from them; and that in many situations, open discourse among stakeholders is needed to navigate trade-offs between individual and society perspectives.