The US Presidential election is certain to alter the health policy landscape in 2021 and beyond. Regardless of who is elected, however, the need for innovators to justify the value of their products to multiple stakeholders will only continue to grow. Measuring value requires demonstrating treatment safety and efficacy as prerequisites for coverage. Furthermore, the importance of cost considerations, including measures of health gains value per dollar spent, will continue to grow; healthcare spending is projected to make up 19.7% of US gross domestic product (GDP) by 2028. Budgetary realities will become an increasingly binding constraint.
As we head into 2021, however, the assessment of the value of new innovations will need to take into account 3 key trends: Covid-19, digital technology, and inequality.
Trend #1: Covid-19 is forcing stakeholders to measure the value of innovation more broadly
While efficacy, safety and cost still form the core of a treatment’s value, how a treatment is administered is now becoming of primary importance in a world with Covid-19. For instance, oral medications may be preferred to those that require infusion; medical procedures that can be performed in outpatient or ambulatory surgical centers will be preferred to those that require an inpatient admission. How treatments can prevent Covid-19 spread relative to the status quo is a vital component to measuring value.
Covid-19 has also highlighted the need to measure treatment value from a societal rather than payer perspective. Traditionally, value assessment organizations, such as the Institute for Clinical and Economic Review (ICER) in the United States and the National Institute for Health and Care Excellence (NICE) in the UK, only measure health benefits and cost from the payer perspective. A treatment’s impact on productivity, caregiver burden, or educational outcomes to date have only infrequently been incorporated into these organization’s definition of value.
Covid-19 and subsequent quarantine efforts have highlighted that many diseases impact individuals and their families in ways beyond health; these impacts have real economic impacts that need to be taken into account. Novel value elements such as the “value of hope” and “insurance value” also should be included in the measure of societal value. These novel sources of value have been documented in International Society for Pharmacoeconomics and Outcomes Research (ISPOR)’s value flower and are also increasingly important in a postpandemic world. Valuations of vaccines or treatments for Covid-19 are much higher when taking into account these novel value elements compared with using the more limited payer-only approach. Looking beyond Covid-19, my own research finds that using a narrow payer perspective greatly underestimates the value of immuno-oncology treatments for lung cancer compared with including broader societal measures of value. Failing to measure all sources of health benefit and cost may lead to failure to cover treatments that have tremendous value to society.
Trend #2: Accelerating the adoption of digital technology.
While the advent of digital technologies has held much promise, 2021 will be the year that a number of these technologies come into maturity. Telemedicine is increasingly becoming the norm. Medicare and Medicaid have loosened restrictions on telemedicine reimbursement. Approximately 1 in 4 Americans have used telemedicine during the COVID-19 pandemic; in China, the use of telemedicine increased ten-fold during the Covid-19 pandemic.
Telemedicine is just the beginning, however. Technologies are combining wearables and telemedicine to enable a quantitative, data-based approach to at-home rehabilitation. To better calibrate dosing and track patient medication adherence, chip-in-pill technologies are now available to measure medication ingestion, not just medication fills. Finally, digital therapeutics are being developed that can be used without leaving one’s house; these treatments could eventually replace pharmaceuticals in some disease areas. For instance, there are apps to treat substance abuse disorder and a video game-based approach to treat attention-deficit/hyperactivity disorder (ADHD). While digital technology has held much promise for many years, in 2021 digital will transition from nice to have to a necessity.
Trend #3: Understanding treatment impact on inequality.
In 2021, the value of a treatment will depend not just on health benefits, but on whether the treatment can help improve outcomes among the worst off among us. Covid-19 has highlighted inequalities that have existed for many years. According to Centers for Disease Control and Prevention (CDC) data from August 2020, African Americans are 2.6 times as likely to get, and 4.7 times as likely to be hospitalized for COVID-19. Even prior to Covid, life expectancy for African Americans in the United States was more than 3 years lower than the American average. Insurance coverage rates for African Americans are also much lower than the general US population as well.
Payers and policymakers will begin to incorporate inequality reduction into how new treatments are assessed. The methods to quantify the value of inequality reduction have already been developed and are well known in academia. Methods include distributional cost-effectiveness analysis (DCEA) and multicriteria decision analysis (MCDA). Incorporating DCEA and MCEA into value assessment is not just feasible, but will increasingly become a moral imperative.
As we move past the US presidential election, value measurement will continue to impact reimbursement and coverage. While payers and policymakers took a more narrow-minded perspective on innovation value in 2020, the year 2021 will bring an increased focus on a treatment’s societal value, how innovation interacts with digital technologies, and whether new innovations are able to reduce existing health outcome inequalities. These trends make 2021 a year worth looking forward to.
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