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Assessing value in healthcare: an interview with William Padula
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Assessing value in healthcare: an interview with William Padula
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Duration:
T00H09M07S
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Upload Date:
2020-07-09T00:00:00.0000000
Transcript:
Language: EN.
Segment:1 Introduction.
[MUSIC PLAYING]
WILLIAM PADULA: Bill Padula. I'm an Assistant Professor of Pharmaceutical and Health Economics in the School of Pharmacy at University of Southern California.
Segment:2 Reducing wasteful spending in healthcare.
WILLIAM PADULA: I think it's the point that we're spending a lot of money across the entire healthcare system. I take the USA as my closest example, since I'm in a center for health economics and policy. And looking at the fact that we spend US$3.5 trillion on healthcare in the USA – that's more than the budgets of the, after the first five largest economies in the world, the combined economies of the rest of the countries in the world. So out of that US$3.5 trillion, over US$2 trillion is spent on health services, so patients going to the hospital, seeing a doctor in an outpatient clinic, or nursing home and rehab care. And what some recent researchers have estimated is that over US$1 trillion is wasted care. So it's sending patients down the wrong route for care, it's administrative waste, it's doing more harm than good as a result of overuse or overtreating the patient. And so I think there's a huge opportunity here to take what we've learned in health technology assessment and apply that to healthcare services, where we could reduce waste by up to US$1 trillion and cutting out some of the low-value care options that are given to patients right now unnecessarily.
Segment:3 Value in healthcare.
WILLIAM PADULA: Value is what I like to think of as an explicit definition: it's quality, and it's cost, some ratio of those two things, and the idea that as you increase on your spending for healthcare, hopefully, you get more quality. However, there's clearly a rate of diminishing return as you spend more. If there's a cap on how much quality we can give to a patient, or to a population, then we need to be careful about how much we continue to spend to attempt to up that quality of care. In the USA, as a result of spending US$3.5 trillion, we've definitely hit a cap on what we're able to give to patients across the USA in order to improve their outcomes. So value, in this particular case, is finding that perfect fit between what we spend and what we can do to improve peoples' health.
Segment:4 Challenges.
WILLIAM PADULA: We just can't give a blank check to healthcare anymore. In a country where the national debt exceeds nearly US$20 trillion now, and healthcare is the fastest growing industry in the USA. So we need to be careful at this point at what we're spending our money on. There's a lot of things being offered as new, innovative technologies that I believe are disruptive. But the greatest challenge in the country is weeding out the things of the past that we realize no longer work, or don't work as well as what we're able to offer to patients today. And so value is this process of removing low-value care from the existing stream and reinforcing high-value, disruptive technologies or new innovative services that help improve the lives of a patient.
Segment:5 Improving value assessment in healthcare.
WILLIAM PADULA: There's a lot of people that have good technical skills in the healthcare sector, but don't know how to use value assessments effectively, or don't know how to communicate the results of value assessments to the stakeholders. It's not easy. You have payers, providers, patients. You have governments that are involved in delivering healthcare or paying for healthcare. So, each one of these stakeholders certainly cares about value. But value is just a concept. The explicit measures of value – like cost–effectiveness and cost–benefit, budget impact, return on investment – are the real statistics of value that we want to display to each of these stakeholders. But the challenge becomes that different stakeholders have different views on what value should be. An academic researcher like me, or a hospital medical director, likes cost–effectiveness analysis because they like to see the cost relative to the clinical benefit delivered to the patient. However, an insurance company is more concerned about budget impact, because they might have to cover the cost of treating a disease for a small population of patients. However, that money can be spread out throughout a risk pool in order to cover the high costs for a small amount of patients. And then finally, you might have a chief financial officer of a major health system – like a Geisinger or a Kaiser Permanente type of health system – who's looking at the return on investment, because if we're going to invest in a technology that changes the lives of a few patients today, cures a disease, are we going to be able to save money on the treatment of those patients in the future. And that savings represents an opportunity to treat other patients down the road who are being marginalized today.
Segment:6 Value-based payments.
WILLIAM PADULA: I think what we have to really look at is the US healthacre system is much different than the rest of the world. We have a lot of private payers, and so individuals belong to risk pools based on where they're employed or what state they live in. And so these payers have different populations of diseases, too. So, we look at the spread of hepatitis C, for instance, across the country – it is not consistently even across, say, the state of Maryland versus the state of Wyoming. There are pockets or clusters where there are greater densities. So, value-based payment means something different to different locations in this world, depending on who your panel is and how comorbid they might be. And therefore, the amount of money that an individual system is going to pay for treating, or paying for a curative therapy, will vary. And they need to work out these prices individually with the manufacturers and other stakeholders in the system, and come to some agreement about what we can afford to do, and what we need to do, for our patients. I think an amazing move that was accomplished lately with the state of Louisiana was that they've created what is being called the Netflix model. They're basically paying a one fixed rate in order to have access to the cure for hepatitis C treatment for all Medicaid patients in the state. And that was an agreement that they came to individually with the manufacturer of those drugs. And I think it works quite well, especially in a world today where you could easily break a budget for an entire payer on one or two types of therapies of this nature.
Segment:7 Patient input.
WILLIAM PADULA: It's becoming a thing. There was a stretch of about 10 years where PCORI has been completely focused on comparative effectiveness research in the USA, and a lot of that came out of the roots that patients didn't like the idea that value was based on some statistic, like a QALY, that downplayed their health based on some population figure of their disability or their quality of life. And so, we've stayed away from some of these measures, to this point, that didn't truly reflect the individuals' feeling of their health, or how they could improve, with good health technology or some intervention that helps make them better. I think that some of these new methods, like MCDA – multi-criterion decision analytics – could be great ways to bring other domains of patients' preferences for what their achievable outcomes should be into the weight of what we measure value by.
Segment:8 A future perspective.
WILLIAM PADULA: Well, certainly, we do not use value frameworks meaningfully in the USA. And that's with respect to countries, especially in Europe and the UK – UK sort of has this idyllic model of NICE and using health technology assessment to explore what technologies or services enter into the healthcare market there for coverage. But, the USA could be more effective at using value assessments in order to get back to this point of excluding low-value care. And by doing that, we are able to save money on the wasteful services and unnecessary medical care that patients receive today, increase financial bandwidth and use that savings in order to reinvest for patients that are, today, disenfranchised from the healthcare system because of issues of affordability or access to good quality care. And so, moving forward, I think that's the best way to fix this US$3 trillion issue that we have with healthcare. When you divide up what we spend all of our healthcare on, waste is the one thing that we can all agree can go away. And value assessment is a good way to figure out what we can get rid of first.
WILLIAM PADULA: [MUSIC PLAYING]
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