Value: How It’s Defined and Measured Matters in the Health Care Debate

As I write this, the election has just wrapped up and prognosticators are trying to figure out what will define President-elect Trump’s health care policy and next steps. I’ll leave that to the pundits; even they deserve a mulligan on this. At the National Pharmaceutical Council, what we are trying to do is define best practices for understanding and defining value in health care. With so many new life-saving and life-improving treatments for cancer or medicines to treat rare or chronic conditions — it is more important now than ever to be able to capture and communicate the value of these ground-breaking medicines. This is true regardless of the next administration’s steps on health policy.

Moving in parallel to these scientific breakthroughs is a massive health care system transition — one shifting from a focus on paying for the volume of health services — to one paying for the value of health benefits accrued to the patient. In this changing environment, how do we measure value? And how can we make sure that patients have a full voice in how value is measured?

There’s no one right answer.

A number of organizations have developed value assessment frameworks intended to answer these questions, but the field is relatively young and still evolving. These early value assessments could have a tremendous impact on patient treatment decisions, as well as on coverage and reimbursement decisions. So it’s important for us to bring all health care stakeholders together to help shape the development of value assessment going forward and the impetus behind a conference we hosted this fall to foster this conversation.

To date, organizations such as the Institute for Clinical and Economic Review, National Comprehensive Cancer Network, Drug Abacus, American College of Cardiology-American Heart Association and the American Society of Clinical Oncology have developed frameworks, which were designed as decision-making aids with different end-users in mind.

If we get it right, value assessments can be valuable and useful tools. But if we get it wrong, these tools could be used to limit patient’s ability to get the new or innovative therapies they need.

To assist in guiding the field, earlier this year the National Pharmaceutical Council developed and disseminated Guiding Practices for Patient-Centered Value Assessment. The guiding practices set forth some basic guideposts to help developers, such as making sure input from patients and other stakeholders is fully incorporated, using established methods and transparent models and assumptions, using sound, high-quality evidence, and including a broad array of factors that matter to patients and society, among other practices.

There is still much that we need to learn before these frameworks “are ready for prime time” or broader use in the United States. Until they are “ready” and reliable tools, they should not be used in assessments that can impact patients’ access. In order for the field to advance, there are six issues that value assessment developers need to wrestle with before they’re truly ready. These include:

  • The type of evidence that is used — and how it is used — is a critical underpinning for all assessments.
  • Frameworks need to have a deeper involvement of patients and their perspectives.
  • One size doesn’t fit all. Frameworks need to have flexibility to include a variety of inputs. Multiple frameworks can be a good thing.
  • Frameworks should be transparent; end-users should be able to see the evidence that was used and know how the model was built so that results could be reproduced.
  • Cost effectiveness should be considered from both a health care and societal perspective, such as considering indirect benefits, productivity improvements and the burden on caregivers.
  • Budget impact has a different meaning than value assessment. If the budget impact is estimated, then it should be considered separately from value determinations.

These challenges won’t be solved in one day, and the stakeholder dialogue that began at our conference is going to continue for a long time in the future, and certainly through the incoming administration.


Dan Leonard is the president of the National Pharmaceutical Council, a health policy research organization dedicated to the advancement of good evidence and science, and to fostering an environment in the United States that supports medical innovation. NPC recently held a conference – Assessing Value: Promise and Pitfalls — focusing on value.

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