Health Policy$ense

Toward a Value Proposition for Preventive Care

LDI Senior Fellow Mark Pauly wants to have a conversation about the ACA’s mandatory coverage of preventive care. In an article released today in the November issue of Health Affairs, Pauly, and colleagues from Duke University and the University of Washington, propose that decisionmakers take cost-effectiveness into account when mandating coverage of preventive services.

Mark Pauly
Mark Pauly, PhD, Wharton School Professor and LDI Senior Fellow

Under the Affordable Care Act (ACA), preventive care measures recommended by the Advisory Committee on Immunization Practices (ACIP) and the US Preventive Services Task Force 28 (USPSTF) must be covered in full by insurance. Currently neither ACIP nor the USPSTF explicitly incorporates cost or cost-effectiveness in making its recommendations (and the USPSTF explicitly ignores costs). Their decisions are based on a comparison of health benefits and risks alone. This sets up the situation where they are advising on policies that affect cost without guidance on how to consider those costs.

Lack of guidelines
Pauly and colleagues question the lack of decision-making guidelines for these advisory bodies and propose a model of cost-effectiveness analysis as a way forward. They argue that without a decision-making framework, recommendations of the organizations are ad hoc and inconsistent in logic, and also drive up costs of medical care. The authors propose a three-tier approach based on cost-effectiveness ratios. They write that:

(R)outine use of a preventive service should be recommended for full insurance coverage if the service’s cost-effectiveness exceeds a socially determined threshold. For less cost-effective services, we suggest that information about effectiveness and cost should be provided to consumers by physicians or government, but the choice of care and insurance coverage for care should be made by individuals. For the least cost-effective services, the two organizations should discourage public and private insurers from covering such services and report their unfavorable cost-effectiveness.

Underlying their suggestion is a stated belief that having strong recommendations for high-value preventive care, and promoting population adherence through insurance coverage, is sensible public policy. However, sound guidelines are necessary to correctly make recommendations and have a consistent understanding of ‘value’.

Expenditures budget
Pauly and colleagues note that the groups “have no responsibility for a total expenditures budget for medical services that would constrain their recommendations.” They cite an analysis that shows a 1.5 percent increase in private insurance premiums due to the cost of the US Preventive Services Task Force recommendations. “When they do recommend a new costly vaccine or service, that recommendation usually increases both public and private spending (including insurance premiums).”

The authors posit that the current workings of the two advisory bodies undercut the recommendation process by making it more arbitrary than it needs to be. They stress that both organizations are faced with an impossible task to perform unless the system is changed to permit considerations of value. How likely is that? Pauly and colleagues conclude, “Getting the political process to make the judgment about monetary value may be the greatest challenge.”

Consideration of costs
Policy change to implement the recommendations of Pauly and colleagues would be no small task. They acknowledge that precise dividing lines, in dollar values, between their three tiers is a political and ultimately a societal judgment. However, they suggest that a decision-making framework based on economic efficiency would provide a starting point for “the public conversation that ought to occur about how consideration of costs should factor into binding recommendations about insurance coverage.”