Determining Healthcare’s Genuine Value

How would you judge the value of your healthcare? A longstanding definition of treatment holds that value is the health outcomes achieved for the dollars spent. Yet behind that seemingly simple formula lies much complexity.

Think about it: Calculating outcomes and costs for treating a short-term acute condition, such as a child’s strep throat, may be easy. But it’s far harder to pinpoint value in a long-term serious illness such as advanced cancer, in which both both the outcomes and costs of treating a given individual—let alone a population with a particular cancer—may be unknown for years.

In this era of value-based payment, it’s worth considering how different actors in the healthcare sphere approach the value equation. The United States spends far more per person than any other advanced nation on healthcare, yet our health outcomes lag behind. Meanwhile, healthcare spending has crowded out investments in other areas like education and social services that may have a greater impact on health outcomes. As a result, getting better value from the nation’s investments in health and health care is critical to the Robert Wood Johnson Foundation’s goal of building a culture of health, notes Anne Weiss, who directs the Foundation’s work in this area.

Several value-creating initiatives in healthcare were topics of discussion at the recent AHIP Institute Conference in Nashville, where I served as moderator.

Lowering costs for lab tests: Elizabeth Holmes, founder and CEO of Theranos, has been the subject of a recent New Yorker profile and was featured last year on the covers of both Fortune and Forbes. She believes individuals should be “in the driver’s seat of our own care” —and that they should especially have the tools to enable prevention or early detection of disease.

Theranos offers blood tests that use a finger stick and tiny drop of blood, versus the larger needles and tubes of blood that characterize conventional testing. Prices for the tests, which are fully transparent and posted online, are far lower than what is typically charged or that Medicare or other payers will pay. 

Among other options, consumers can access the tests at Walgreens pharmacies, Capital BlueCross retail stores in Pennsylvania, and in some physician offices. And in Arizona, Holmes persuaded a bipartisan group of lawmakers to enact a state law that now allows any consumer to obtain any lab test without a physician’s order. 

Holmes said about 60% of patients don’t get the lab tests that their doctors prescribe for them, partly because of cost or fear of needles. So, the ultimate value for consumers may well be those low prices, ease of access to the tests, and the need to extract just those tiny drops of blood.

Personalized medicine: President Obama’s Precision Medicine Initiative, the Patient Centered Outcomes Research Institute, and proposed legislation in the U.S. House of Representatives on 21st Century Cures, all have in common the core understanding that a given health intervention that works for one person may not work for another.  According to Colin Hill, chairman and CEO of GNS Healthcare, a good guess is that about half of treatments given today fall into that category, leading to $500 billion to $1 trillion annually in what in effect is health care waste.

Fortunately, the tools exist to propel us past “knowledge blind spots” that still have the wrong care directed to a particular person. These tools include genetics and genomics, electronic health records, “Big Data,” predictive analytics, machine learning, artificial intelligence, cloud computing. 

Hill’s company is using genetic sequencing and EHRs to help predict the risk of premature birth, which causes an estimated 10,000 US deaths and at least $28 billion in health spending annually. It’s hoped that knowing who’s vulnerable ahead of time could lead to tailored interventions that could forestall the worst birth outcomes.

At AHIP, I asked Hill how many medical decisions today are made on the basis of such advanced analytical techniques. “Somewhere between 1% and 10%,” he replied.

For all of us who seek value from our healthcare dollars, that’s a sorry equation.

Susan Dentzer is a senior policy advisor at the Robert Wood Johnson Foundation. This article originally appeared on The Health Care Blog.