From Alan Steele, VP, Head of Art, Managed Markets, Palio

Currently, the U.S. leads the world in the amount it pays for healthcare – a whopping 17.3 percent of the gross domestic product in 2009 – according to the Centers for Medicare & Medicaid Services. As A. Mark Fendrick of the University of Michigan and his colleagues wrote in the December 2009 issue of The American Journal of Managed Care: “In short, we pay more than any other country for healthcare, but get less.”  On top of that, poor adherence increases annual healthcare costs in the U.S. by $290 billion according to the New England Healthcare Institute (NEHI).

Closed systems. In spirit, there is no healthcare “system” in America; there are various disconnected players guarding their turf. Stakeholders such as empowered patients, enlightened policy makers, treatment-deciding providers, cost-conscious payers, and profit-driven manufacturers measure value differently. For instance, a manufacturer sees value as the efficacy of a drug versus placebo based on select clinical trials while a payer thinks of a drug’s use as a loss (cost) to its members (patients). Our country needs consensus among all stakeholders, an understanding that revolves around a universal definition of better health: improved outcomes using more economical treatments and advanced tools for diagnosis and patient adherence.

Open system. Managed care is defined as the delivery of the best care for a specific patient at a particular time. This is reached by transparency. Transparency is a broad-scale initiative enabling consumers to compare the quality and price of health care services, so they can make informed choices about doctors and hospitals. In cooperation with America’s largest employers and the medical profession, this initiative is laying the foundation for pooling and analyzing information about procedures, hospitals and physician services. When this data foundation is in place, regional health information alliances will turn the raw data into useful information for consumers.

Government initiatives. The U.S. government, under the American Recovery and Reinvestment Act of 2009 (ARRA), has allocated over one billion dollars to several agencies including the National Institutes of Health (NIH), the U.S. Department of Health & Human Services (HHS), and the Agency for Healthcare Research and Quality (AHRQ) to increase studies which compare drugs and their effectiveness in certain populations. This is called Comparative Effectiveness Research (CER). One of CER’s goals is to cease the “adopt everything for everyone model” and to initiate the “adopt when appropriate” model. Three current inefficiencies in healthcare are overuse, misuse, or underuse of treatments or services. Evidence-based research obtained in real world settings will be used by the FDA to force manufacturers to demonstrate the value of new drugs. Pre-selecting patients and incorporating bio-markers, laboratory measurements indicating a disease or process occurring in the body, will bring us closer to “personalized medicine.” Electronic medical records filled with valuable patient data could also help improve the selection of patients who respond to therapies.

Extracts: “The New Value Equation”, Mike May, Scientific American Pathways. “The Social Life of Health Information,” Pew Internet and American Life project, June 2009. “Value-Driven Health Care,” http://archive.hhs.gov/valuedriven/index.html

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