Ideas About Resourcing Health Care in the United States: Can Economic Evaluation Achieve Meaningful Use?

The United States is one of the few high-income countries that does not routinely apply economic evaluation methods such as cost-effectiveness analysis to healthcare decision-making. Our nation also ranks among the world’s least efficient healthcare spenders.

Value in healthcare relates to whether the price is worth the benefit. While controlling for costs, health systems must improve safety, efficacy and effectiveness so that investments in treating certain individuals avoid drawing vital resources from supporting other patients.

In a study published in Annals of Internal Medicine, we suggest several ways that economic evaluation could become an effective component of value-based decision-making.

There are Existing Models

Maryland has had a Health Services Cost Review Commission (HSCRC) since 1971 and has the slowest increase in healthcare costs per patient nationwide. By 2011, Maryland’s reimbursements were 4% below average, and the state continues to lead in many healthcare innovations. These include the use of global budgets through a partnership with the Centers for Medicare & Medicaid Services that allows providers greater flexibility to allocate resources where they are most needed. Maryland’s HSCRC is a model for value assessment by managing costs to maximize benefits and value.

Other Western countries also offer models of the collective purpose that value-assessment bodies serve, such as the UK’s National Institute for Health and Care Excellence, which oversees the country’s National Health Service.

Overcoming Political Polarization to Improve Value

Economic evaluation in healthcare can quickly become a partisan issue, as seen with the Affordable Care Act. To introduce a value-assessment body that all parties will respect, compromises may have to be made, or individual states may need to address value locally.

However, the single largest payer remains a federally funded one: Medicare. Perhaps if other payers and providers adopted the same rules of value through a central body like Medicare, the nation could begin overcoming the challenges of fragmentation among payers, health systems and medical innovators.

Costs and Options

Managing healthcare spending is critical considering that the U.S. healthcare economy exceeds $3.5 trillion, which includes up to $935 billion on low-value care that costs considerably more than its clinical benefits are worth. Economic evaluation can help ensure that spending on care delivery is far more efficient for health systems and patients alike.

The full study can be found at Annals of Internal Medicine.

Citation: Padula, W.V., Sculpher, M.J. (2021). Ideas About Resourcing Health Care in the United States: Can Economic Evaluation Achieve Meaningful Use? Annals of Internal Medicine, 174, doi:10.7326/M20-1234.