Higher Health Care Value Post COVID-19


Editor’s note

This post introduces a Health Affairs Blog short series, “Higher Health Care Value Post COVID-19.” The series examines opportunities to create a research and policy agenda using the changes wrought by COVID-19 to help create a better health care system in its aftermath. The posts in the series were completed with support for the authors from the Research Consortium for Health Care Value Assessment, a partnership between Altarum and VBID Health, through a grant from the Pharmaceutical Research and Manufacturers of America (PhRMA). PhRMA extended complete independence to Altarum to select researchers and specific topics. Health Affairs retained review and editing rights.

During a once-in-a-hundred-years pandemic, what light can be found amidst the darkness? What opportunities can be envisioned for the U.S. health system as COVID-19 cases in this country eclipse 7 million, with over 200,000 deaths? Two experts even ask if 2020 could be the year that medicine is saved.

While the data are emerging and the unknowns are manifold, we asked seven prestigious research groups to investigate positive opportunities in the chaos. Their work addresses a broad spectrum of topics in health care value. David Cutler describes reasons for high administrative costs, discusses the need to reduce them, and presents strategies to accomplish this. Christina Cutter, Nicholas Berlin, and Mark Fendrick note that the pandemic has resulted in unprecedented adoption of telehealth services as a safe way to deliver health care for services without the risks inherent in in-person contacts. The authors propose policy and research agendas to inform a value-based approach to continuing the use of telehealth in a post-pandemic environment.

Bruce Stuart observes that COVID-19 has resulted in major swings in the provision of elective services. He reviews this phenomenon, considers how the supply of such services is likely to be affected once the crisis is over, and discusses relevant policy issues. As manufacturers work on treatments, cures, vaccines, and diagnostics to address COVID-19, researchers have begun to consider how these new technologies should be priced; William Padula examines problems with using traditional cost-effectiveness analysis to inform such price setting and proposes budget impact analysis as an alternative.

Two posts in the series focus on the natural experiment that has resulted from the reduction in both high- and low-value care during the pandemic. Kevin Griffith and Melinda Buntin describe experimental designs to improve our understanding of the reduction in wasteful services and consider ways to address it post pandemic. Jodi Segal and Allison Oakes explain how this natural experiment can expand our understanding of low-value care and inform the development of a research agenda and policies to permanently reduce it.

Finally, the COVID-19 pandemic has highlighted the health disparities that persist throughout the U.S. health care system. Harold Pollack and Caroline Kelly explore challenges that must be overcome to reduce these disparities and discuss steps to reduce them in preparation for the next public health crisis.

Background

This summer, the Research Consortium for Health Care Value Assessment (RC-HCVA) established a grant center aimed at funding research projects to inform efficient use of health care spending, mitigate the current public health crisis, and support a more sustainable health system. The goal of the 2020 funding cycle is to advance research to support a robust understanding of value in health care, focused on how to use health care dollars wisely in the context and aftermath of COVID-19, and on ways to cut waste and prepare for the next public health emergency. We awarded modest grants to seven teams to complete studies over the summer. (The context is important as COVID-19 impacts emerged in expected and unexpected ways while this work was being completed.) Besides the posts to be published on Health Affairs Blog, the researchers will present their work in a public webinar on October 8, 2020, from 1:00 – 3:00 PM eastern.

Seven Posts

Taming The Paper Tiger

David Cutler

If health care is going to spend less, inputs will need to be paid less. This post explores the possibility of saving money by reducing the administrative costs of health care, which is attractive for several reasons. Administrative costs are high, perhaps a quarter of health spending, so reductions in these costs could yield meaningful savings. The goal of medical care is clinical care, so reducing administrative staff likely has a smaller effect on quantity and quality of care than would reductions in clinical staff. Finally, excess administrative hassles adversely affect peoples’ ability to receive care, so reducing them could improve the timeliness of care received.

Clinical occupations account for two-thirds of health care employment; administrative occupations account for 22 percent (the remainder includes other occupations such as cooks and security guards). There are nearly four administrative workers for every physician and dentist. Even the 22 percent estimate is an understatement of the administrative burden, as physicians and nurses spend part of their time doing administrative work. There are many fewer people employed in health insurers than in clinical employment, yet the vast bulk of people employed in insurance companies are administrative workers.

Other areas requiring significant administrative time include regulatory compliance and measuring and reporting quality metrics. Reducing administrative waste is an especially fruitful and timely pursuit during the COVID-19 pandemic.

Establishing A Value-Based ‘New Normal’ For Telehealth

Christina Cutter, Nicholas Berlin, and A. Mark Fendrick, MD

The COVID-19 pandemic has necessitated an unprecedented level of innovation. One prominent manifestation is the movement of telehealth from fringe to mainstream. The impact of telehealth on quality and cost of care remains largely unknown. As policies facilitating telehealth’s expansion are set to expire with the public health emergency declaration, important decisions regarding its future role are in a state of flux.

Determination of the post-pandemic role of telehealth will be complex and consequential; it should be grounded in a value-based approach. This post capitalizes on the natural experiment afforded by the COVID-19 pandemic and proposes a value-driven telehealth policy and research agenda.

How The COVID-19 Pandemic Has Affected Provision Of Elective Services By American Health Care Providers: The Challenges Ahead

Bruce Stuart

“May you live in interesting times.” This curse certainly applies to the COVID-19 pandemic and its effects on the American health care system. Hospitals in the U.S. lost between 30 percent and 55 percent  of their elective patient volume during the first spike in COVID-19 cases in March through April, 2020.  Visits to physician offices, clinics, and outpatient departments sank to similar levels. By late May the health sector appeared back on track with demand growing across the country, only to face a second and even bigger spike of cases in June and July.

This post reviews how the pandemic impacted the delivery of elective health services and explores ways in which that experience is likely to affect the demand and supply of routine ambulatory care and elective surgery once the crisis has been tamed. Policy relevant questions include: How will the experience of not being able to access routine care affect patients’ longer-term behavior in seeking care? Will the economic consequences of lost jobs, income, and health insurance further reduce demand? What tactics will providers employ to build back patient revenues? Will they move to further expand their market power? Raise prices? Or push volume regardless of the value of the services provided?

Applying Value Assessment To The Health Care Sector For COVID-19

William Padula

We leverage economic evaluation methods, such as cost-effectiveness analysis (CEA), to determine the value and price of disruptive health technologies. The COVID-19 pandemic has brought suffering, mortality, and economic disturbance to the globe. Available options include non-differential treatment of acute respiratory distress syndrome relative to that of influenza, and social distancing. Manufacturers are working on treatments, vaccines, cures, and diagnostics to restore global health and economic order. Unlike in past instances where these discoveries offset the value of less effective solutions, there is a stark contrast in the likely costs and effectiveness of new technologies relative to current options.

Given this contrast, studies have begun to explore prices of treatments and vaccines, but the relative dominance (i.e., costs are lower and clinical effectiveness is greater) that health technology-based solutions may have over current options means that, at any price a vaccine or a treatment option will be cost-saving while improving health. Thus, CEA is incapable of offering price points for health technology which dominates its alternatives, regardless of a willingness-to-pay threshold. This post explores whether CEA has a role in decision-making when it comes to anticipating health technologies for COVID-19, and examines the pertinence that alternative methods of economic evaluation, including the role of budget impact analysis, may play in providing informed decisions and negotiations between payers, manufacturers and governments.

Opportunities To Improve Value In Health Following The COVID-19 Pandemic

Kevin Griffith and Melinda Buntin

The COVID-19 pandemic stalled routine and “elective” health care, some of which was of low value, but some of which was of high value. The postponed care may never be delivered, either because the problem has resolved naturally, or the patient learned to live with it (possibly with less invasive treatments such as exercise, diet, or physical therapy). The pandemic presents opportunities for natural experiments where researchers could observe the consequences of delayed or forgone care. The withdrawal of low-value care should have minimal effects on patients’ health, satisfaction, or future medical spending.

This post outlines several quasi-experimental research designs to identify whether care undelivered due to the coronavirus was high- or low-value across various settings. We also discuss how the U.S. may use the pandemic to revisit how health care spending is allocated. How do we avoid reverting to the pre-COVID system with high levels of inefficiency and waste? What novel financial policies or interventions could support the resumption of deferred high-value care, while disincentivizing low-value care? How may we encourage greater utilization of settings that are known to be more efficient (e.g., physician offices, telemedicine) while mitigating the pandemic’s economic impacts on hospital outpatient departments?

The COVID-19 Pandemic Can Help Us Understand Low-Value Health Care

Jodi Segal and Allison Oakes

The COVID-19 pandemic has upended every sector of the economy. Within health care, it has prompted dramatic innovation, but also deeply disrupted the practice of medicine. To meet the demands of the initial COVID-19 surge, and to protect patients and staff, health care facilities canceled elective procedures and outpatient visits. Fearful patients avoided care for emergent and urgent conditions. Patients have been harmed by this utilization reduction and they continue to suffer and die at home from conditions for which they would ordinarily seek care.

While deferred high-value care increases morbidity and mortality, the unanticipated pause in care delivery also provides an opportunity to revisit entrenched health care practices that may not be effective or efficient. Both high-value services that improve health and low-value care that does not have decreased. This period presents researchers with a unique opportunity to answer fundamental questions about low-value health care and advance the research agenda. The COVID-19 pandemic has created a novel sense of scarcity, which has forced health systems to cut profitable services and prioritize seriously ill patients. Simultaneously, it has revealed a previously unseen counterfactual: a health system in which there is no low-value care. This post describes how this natural experiment can expand our understanding of low-value care and inform the development of policies to permanently reduce it.

COVID-19 And Health Disparities—Insights From Key Informant Interviews

Harold Pollack and Caroline Kelly

COVID-19 illuminates health disparities across America and across the full continuum of prevention and medical care. Our response to the crisis reveals basic weaknesses in our disaster preparedness, primary prevention, management of chronic illness, and systems of acute medical care. These weaknesses have cost lives in several ways, including: disparities in access to personal protective equipment and advanced therapeutics between well-resourced academic medical centers and safety-net hospitals; failures of nursing home regulation, including those that produced high fatality rates in nonwhite communities; failures of public health for populations historically distrustful of government and the public health enterprise.

Through literature review and key informant interviews, this post explores three challenges: (1) closer integration of public health infrastructure and medical care, particularly to ensure adequate public health supports for nursing homes, safety-net providers, and others who serve high percentages of Medicaid patients; (2) enhanced federal supports for state and local health departments, with a focus on public health preparedness and prevention; and (3) improved public health supports for undocumented immigrants and other vulnerable populations that face elevated COVID risks. The post discusses key steps to reduce disparities and to prepare for the next public health crisis.



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