RECENT YEARS HAVE SEEN DRAMATIC INCREASE in the expected survival of cancer patients. But as treatments improve, costs often rise, leaving clinicians, patients, and, payers searching for methods to accurately measure returns on investment (ROI).  And it is often the case in today’s health care marketplace where different organizations use different methods for measuring value. 

In a new article published in the Journal of the American Medical Association, Harvard Kennedy School Professor Amitabh Chandra offers four recommendations for improving value frameworks system-wide: 

  1. Because the clinicians, patients, and payers have different interests when using a value framework, organizations should acknowledge their audience. Patient-focused frameworks should be designed to the congruence between patient preferences, which are highly personal and heterogeneous, and the care patients actually receive. In contrast, payer-focused tools should target the average patient or easily identifiable patient subpopulations.
  2. Organizations that develop value frameworks should use as much available evidence as possible. Randomized clinical trials (RCTs) should be supplemented with other studies, and scrutinized carefully due to differences in end points and comparator selection.
  3. When measuring cost of care, organizations should include all treatment costs. Pharmaceuticals account for only 20% of the total cost of care.
  4. Organizations must clearly identify the role of clinicians in value frameworks.  Many clinicians prefer a patient-oriented framework. As financial risk is increasingly transferred to clinicians through bundled and global payments, however, clinicians may be under increasing pressure to use payer-based frameworks. 

“Valuing cancer treatments based on their health benefits relative to their cost is a step in the right direction,” Chandra said. He argues that improving these frameworks will require greater focus on target audience, consistency of data across organizations, and a more holistic view of associated cost. 

The article was co-authored by Jason Shafrin and and Ravinder Dhawan.

Amitabh Chandra is the Malcolm Wiener Professor of Social Policy and Director of Health Policy Research at the Harvard Kennedy School of Government. His research focuses on innovation and cost-growth in healthcare, medical malpractice, and racial disparities in healthcare.

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