Policy Talk Tries Shifting Conversation About Who Pays for What in Healthcare

We have been living in a groundhog world for the past several decades when it comes to healthcare spending, said Robert Dubois, MD, PhD, chief science officer and executive vice president of the National Pharmaceutical Council (NPC), during AcademyHealth’s National Health Policy Conference, in Washington, DC.

Dubois asked his audience, in a session called When Are We Going to Get Serious About Health Care Spending in the United States, to vote on who should oversee making the tough decisions about where healthcare funds are spent—the government, doctors, insurance companies, patients? The session came a few days after the NPC launched an effort to have a dialogue around this issue by issuing a call for research around the topic and partnering with Health Affairs on a campaign called Going Below the Surface.

“We keep having the same discussions about too much waste in the system, too much low-value spending,” Dubois said.

“We can’t keep kicking the can down the road,” he said, citing new advancements that prolong life or are curative, such as chimeric antigen receptor (CAR) T-cell therapy therapy for B-cell precursor acute lymphoblastic leukemia (ALL) in pediatric patients, or hepatitis C drugs. The treatments prolong life or are curative, but at huge expense.

While everyone in the country wants these innovations to continue, but we are running out of ways to pay for it, Dubois explained.

These dialogues are not going to be easy, he said, citing a few of what he called “third-rail” issues that need to be addressed, such as:

• How much, and how should, health spending be allocated?
• Should we shift money from end-of-life care or treatment for rare diseases?

One of the panelists, Amitabh Chandra, PhD, the Malcolm Wiener Professor of Public Policy and director of Health Policy Research at the Harvard Kennedy School of Government, called himself “the skunk at the garden party” for diving right into those third-rail issues.

“What is the price of our values?” is his retort when he is asked, as an economist, what is the right amount to spend on healthcare—because how much society spends on anything is a question of values, whether it is heathcare or education.

“We spend 18% of [gross domestic product on healthcare], but the problem is we don’t insure everyone,” he noted.

And then there are the tradeoffs. Who decides what to cover and whom to cover?

As an example, he cited Tarceva for advanced pancreatic cancer, which costs $600,000 per year of life gained, versus Hercepetin for advanced breast cancer, which costs $100,000 per each year of life gained.

He also questioned if 1 solution would work for everyone. Like other presentations at the policy conference that cited last week’s Amazon­­—JP Morgan­­ Chase–Berkshire Hathaway health partnership, Chandra said he could imagine a white-collar financial services worker willing to pay more than a blue-collar hourly warehouse worker for healthcare for more expensive, innovative treatments. Income inequality will make this question harder to answer, he said.

It’s important to start asking the right questions, Chandra said, and ask about the value of our spending.

“Unable to say no to low-value care, we create powerful incentives to produce even more low-value care,” which leads to other ramification, he said.

Low-value care decreases our ability to deliver on other priorities, like social determinants of health. And then we struggle with being able to afford high-value interventions because we don’t know what to do.

Another panelist, Donna Cryer, president and CEO of the Global Liver Institute, talked about the issue from the patient perspective. “Patients don’t separate health from healthcare,” she said.

“Without health, children can’t go to school,” she noted. “We’re seeing our armed forces readiness being impaired by obesity and other chronic diseases.”

She said that health outcomes depend on just a small part of medical care given inside a provider's office and noted that in other countries, it’s helpful to look not just at what what they spend on healthcare but also on all the other factors that contribute to better health outcomes.

The final panelist, Glenn Steele MD, PhD, talked about his experience as head of the Geisinger Health System from 2001 to 2014 and how he is seeking to replicate those experiences elsewhere.

“If you want to change the behavior of the patient ... the single most interesting lever on that is through the provider,” he said. Geisinger focused on the primary care relationship between patients and healthcare providers, especially when it came to what Steele called the “redistribution of resources.”

“We would pay orthopedists less so that we could pay primary care providers more,” he said.

Geisinger also focused on educating staff on better outcomes and translating best practices into lower costs of care.

Steele now leads the Healthcare Transformation Alliance, made up of 47 large employers looking to share data on costs and outcomes, and will be looking at inappropriate utilization trends. He said they are creating a provider network and relationship with pharmacy suppliers. Currently operating in Chicago, Dallas, Fort Worth, Phoenix, Steele said it will expand to 5 more markets next year.