SummaryTune into another episode of Avalere Health Essential Voice in our Start Your Day with Avalere series. In this segment, our experts kick off a three-part series about patient perspective in value assessment with an overview of value assessments and value frameworks.
Ali: Hello and welcome to another episode of Avalere Health Essential Voice in our “Start Your Day with Avalere” series.
My name is Ali Silverstein, and I’m a Consultant II in the Health Economics and Advanced Analytics practice here at Avalere. I’m joined today by Brian Leinwand, Associate Principal, and Taylor Schwartz, Consultant II, who both work within Health Economics and Advanced Analytics.
This is the first of a 3-part series discussing Avalere’s insights on infusing the patient perspective into value assessment. Today, we’ll provide an overview of value assessments and value frameworks and discuss how the patient perspective is, or is not, included in some key examples.
In part 2, we’ll dive into the methods that can be used to incorporate patient preferences more effectively and transparently into quantifying the value of medical innovations.
Finally, in part 3, we’ll describe how Avalere has approached the patient perspective and our work with value assessment.
The US healthcare system is shifting away from a volume-based system to a value-based system. Hospitals are being paid for positive health outcomes instead of the quantity of services. Providers are incentivized to provide quality care that keeps patients out of the hospital, and now manufacturers are facing increased pressure to demonstrate the value of their new products to different stakeholders in the healthcare system, including patients, providers, and health systems.
But what is this value and how is it assessed? On this episode, we’re going to discuss the nuts and bolts of value assessment and value frameworks and how the perspective of value matters, especially for patients.
Brian, I’d like to start with you. Can you give us an introduction to the types of value a manufacturer may consider when demonstrating the value of a product to payers?
Brian: Sure, thanks, Ali. There are several ways that healthcare stakeholders may define value. However, value has traditionally been defined or framed in 3 ways.
Humanistic value oftentimes assesses the impact of a healthcare intervention on patient-reported outcomes, which includes quality of life.
Economic value most often demonstrates the impact of an intervention on direct healthcare resource use and costs.
Clinical value demonstrates the impact of an intervention on health outcomes.
To paint a clearer picture of these traditional value domains, let’s look at an example. Say a novel therapy for cystic fibrosis has been developed that can improve a patient’s lung function (providing clinical value) and may in turn reduce hospitalizations and healthcare costs related to pulmonary exacerbations (direct economic value), both of which would be particularly salient for payers. However, other economic value domains could be fundamentally impacted by the improvement in lung function, indirect economic value that isn’t directly related to healthcare resource use or medical costs such as reduced workplace or school absenteeism.
Additionally, for the patient, a reduction in pulmonary exacerbations may increase quality of life and reduce the reliance on caregivers, both of which can be thought of as humanistic value drivers. However, because of the manner in which the US healthcare system provides and pays for treatments, patient access to medical innovations is oftentimes based on payer coverage and reimbursement decision making, rather than based on patient-centric elements or preferences for care.
Ali: Thanks, Brian. Taylor, could you tell us a little bit about the agencies or organizations that are making these access decisions and how they do so? How does that process differ between the US and other developed countries around the world?
Taylor: Sure, Ali. In ex-US settings, health technology assessment bodies, or HTAs, are commonly used to inform coverage decisions for national healthcare systems. These entities typically assess products’ clinical comparative effectiveness, cost effectiveness, and the budget impact of that product. If a product is not deemed cost effective, it may not be covered, and if the budget impact is too large, access may be restricted.
A recent Avalere analysis found that recommendations by HTAs in the oncology setting have grown increasingly restrictive over time. It is important to note that ex-US HTA decisions are often binding, meaning that manufacturers must adhere to the pricing and coverage recommendations of those HTA bodies. This system is very different from what we see here in the United States. The FDA is responsible for determining the safety and the efficacy of new treatments that are hoping to come to market, but they’re not responsible for determining the value of those products. In the US multiple payers are determining value and there’s no centralized approach like there is in the UK for instance, where the National Institute for Health and Care Excellence (NICE) determines the cost effectiveness and value of drugs that come to market. Because of this, coverage and reimbursement decisions are negotiated between the manufacturer and the payer based on the payer type, such as a government payer, like the VA or CMS, versus a commercial plan, in addition to the plan’s risk pool and the payer’s perceived value of the product.
Cost effectiveness is not formally utilized in the decision-making process, and therefore, an HTA entity is not making any binding recommendations here in the United States.
Ali: Right. So, to make sense of value and the decision-making process in the US, there have been a number of value frameworks developed to deliver an optimal approach to assessment. Brian, could you highlight a few of them for us?
Brian: Absolutely. The first value framework I’ll detail was developed by the American Society for Clinical Oncology, also known as ASCO, as a physician-guided tool to assist the physician and patient in shared decision making. It’s been constructed to enable comparisons of a new treatment regimen with the standard of care for a specific clinical cancer indication using data pulled from prospective randomized trials. Points are awarded or subtracted in the categories of clinical benefit and toxicity. These are combined to generate a net health benefit score, which is then compared against the direct cost of the treatment, which provides an overall summary assessment.
These value domains are historically what most think of when evaluating treatment value: efficacy, safety, and costs. However, the ASCO framework does not include a formal cost effectiveness assessment, which is par for the course for resource allocation purposes, but it’s important to remember that resource allocation is not the objective of the framework.
The next framework I’ll detail was developed by the Institute for Clinical and Economic Review, also known as ICER. It’s gained quite a bit of visibility over the past 5 years as they focus much of their intent not on patient and physician shared decision making like ASCO, but on the payer perspective, including drug pricing and reimbursement activities.
The ICER framework focuses on 2 primary domains: long-term value and short-term affordability. To assess long-term value, ICER assesses the comparative efficacy of the intervention or interventions that are under review as well as the comparative cost effectiveness. ICER recognizes that treatment value cannot be focused solely on efficacy, safety, and cost effectiveness and to accommodate that sentiment they include qualitative contextual considerations or other benefits or disadvantages which are considered alongside the quantitative analyses mentioned a moment ago.
To assess short-term affordability, ICER calculates the potential budget impact of the intervention or interventions based on expected costs of the intervention as well as the expected uptake or adoption of the technology. They also employ thresholds for both cost-effectiveness modeling and budget-impact modeling to assess the degree to which each intervention exhibits long-term value for money or short-term affordability.
The final framework I’ll cover is innovation and value initiatives, or IVIs, open-source value projects. Unlike other frameworks, it was designed to be an open-source iterative health economic modeling online platform with model design guided by an advisory group comprised of a variety of different stakeholder types, including payers, providers, employers, and patients or patient advocacy groups. IVI models are characterized by a continuous process of improvement with release of an open-source model, solicitation of stakeholder input, reviews by technical expert panels, and incorporation of feedback into an updated model.
This process leads to models that have the ability to assess value from a diverse set of perspectives not limited to the ASCO shared decision-making approach or ICER payer perspectives. I can expand the model to capture non-traditional elements of value and formally incorporate patient preferences so that the framework provides alternatives to cost effectiveness model outcomes, which are typically quality-adjusted life years and novel elements of value, including insurance value and the value of hope. From a patient centricity point of view, this framework is an improvement over many of the other value assessment frameworks with a myopic focus on efficacy, safety, and costs.
I think it’s important to reiterate here that in today’s US healthcare landscape, patient-centered care is increasingly being recognized as a key element of high-quality care, and health technology assessment organizations and value frameworks have recently begun to incorporate patient engagement and preferences more explicitly into their approaches. However, standard cost effectiveness analyses are not flexible to include the patient perspective effectively and quantitatively in evaluation of treatment value. As these methods mature, we anticipate that malleable modeling approaches that can handle these sorts of complexities will come to fruition in the not-too-distant future.
Ali: Because these recent efforts are built from existing methods, with the exception of IVI’s framework, they typically treat patient-oriented value as tangential or secondary to the central quantitative assessment of value. Some of these frameworks do incorporate the patient perspective to varying degrees, and some do not at all. Taylor, can you tell us how ICER specifically is working to infuse the patient perspective into their assessments?
Taylor: In late 2019, ICER released their updated value assessment framework. Every couple of years, they update their methodology to incorporate changes in the environment. As part of this update, they developed a patient engagement program and are including a patient perspectives chapter in all of their assessment reports. However, it’s unclear how these inclusions will fundamentally influence the underlying assessment methods and outcomes of their reports. Furthermore, the ICER value assessment framework takes the population perspective, which is not necessarily relevant to an individual patient who has to make a shared decision-making choice with their clinical team.
Ali: Brian, how is ASCO infusing the patient perspective?
Brian: ASCO’s value framework has made a quantitative attempt to include elements in the assessment that are particularly salient to patients. However, these elements are not representative of the full breadth of value drivers from a patient perspective. That said, ASCO acknowledges that as a shared decision-making tool, the framework must accommodate the fact that not all patients view value through the same lens and some patients may prioritize extending the length of life, say to attend a child’s wedding, regardless of how toxic or expensive the product may be. Some may want to optimize their quality of life in their final months or years through mitigation of intolerable side effects, even if it means not optimizing survival. Yet other patients may prefer not to leave their loved ones with crippling debt and prefer a more careful balance between costs and clinical outcomes. So, to address these complex dynamics, they incorporate an approach to weight each value driver to reflect the preferences of particular patients who were evaluated at the point of care.
Ali: Thanks for that synopsis. Taylor, you and Brian just told us about 2 examples of value frameworks that have incorporated the patient perspective to some degree, and although an effort to include the patient perspective has begun, most of that inclusion of patient-centered value is limited, and it’s often unclear how it impacts the results of the cost effectiveness analysis that’s typically conducted in the assessment of value. Could you tell us about some of the novel components of value that are particularly important to patients that might be missing from the existing frameworks?
Taylor: Definitely, Ali. I’ll illustrate these elements with a recent example of treatment for COVID-19. The ISPOR (International Society for Pharmacoeconomics and Outcomes Research) Special Task Force report outlined and defined a comprehensive list of elements of value, some that are typically included in value assessment and many that are not. As we discussed, standard quantification of value is driven by direct clinical and economic benefit through use of qualities or quality-adjusted life years gained, and net costs. Sometimes productivity and treatment adherence improving factors are also added as part of this assessment.
However, in ICER’s recent analysis of pricing for the COVID-19 treatment Remdesivir, they failed to incorporate productivity into their model, a prominent broad societal impact of the disease, and an element that is particularly important for patients who may not have sick leave and must work to provide for their families. In this COVID-19-specific example, ICER’s value assessment also did not include other novel sources of value defined by the ISPOR Special Task Force report such as fear of contagion, which is the added benefit that treating the disease has by limiting the spread of the disease to others, something that’s very important when it comes to COVID-19, or the severity of the disease, the idea that health is more valuable to patients with a poor baseline prognosis. Neither of these were included in their assessment.
A broader societal perspective on value assessment that incorporates patient concerns, like the fear of contracting infectious or severe disease, whether it be COVID-19, HCV, HIV, cancer, etc., should incorporate these elements of value. A new medical innovation can also provide insurance value for patients, which describes how the development of a treatment creates a physical risk protection if a patient were to develop the disease. Having a treatment for COVID-19 that reduces hospitalization, reduces the need for ventilators, and reduces death provides value to patients who have not contracted the virus, but may in the future. This combined with the financial risk protection that health insurance provides by protecting them against spending money on medical care is a value to the patients.
Furthermore, patients may value new treatments that extend their life long enough to provide them with the option of benefiting from future medical innovation. This option value is commonly used to describe the value of cancer treatments, but we can also apply it to our COVID-19 example, in that reducing the risk of death with the current treatments we have available could allow patients to benefit from future treatments or preventive technologies such as the vaccines that we are starting to see come to the market today.
They may also value potential reductions in uncertainty related to COVID-19 outcomes by pairing new diagnostic technologies with treatment.
Speaking now more broadly than this COVID-19 example, each of these novel sources of value may vary in importance from patient to patient, but if value assessments and HTAs is do not attempt to quantify them for inclusion in their assessments, they fail to capture the aspects of medical innovation that patients may place significant value on.
Ali: Thanks, Taylor. These are some really innovative ways to think about the holistic benefits of the value of medical innovation from the patient perspective, and thanks for making the value components relevant today with the COVID-19 example.
At this point, we’ve talked about value assessment and some of the frameworks currently used to conduct evaluations of costs and benefits of treatments and other medical innovations. We’ve identified gaps in traditional value assessment where the patient perspective is scarcely considered, and we’ve learned about several components of value that can be particularly salient to patients.
In our second episode of our 3-part series, we will be discussing the methods that can be used to incorporate the patient perspective into a quantification of the value of medical innovations. I’ll be looking forward to that discussion with both of you.
Thank you, Brian and Taylor, for joining me today, and thank you all for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes in our Start Your Day with Avalere series. If you would like to learn more, please visit us at our website, www.avalere.com.
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