Just how does one dollar-ize the value of one point drop in A1c versus coronary artery stenting versus a mammogram? Like it or not, it comes down to the gain of additional years of life and the quality of life in those years, both of which can be reconciled and combined in a single measure called ‘quality adjusted life years’ or ‘QALYs.’ The DMCB recognizes that getting a brain wrapped around the concept of a QALY can be mind numbing for average purchasers, politicians, consumers, providers, practitioners, but it can be really handy once you get the hang of it.
And readers of the DMCB may want to get the hang of it. That’s because of interest in an autonomous ‘federal health board’ by the U.S. Senate Finance Committee and Congressional Budget Office as well as by the Federal Reserve. While the details of how such a politically insulated body would function is still unknown and if the concept survives Congressional and Presidential scrutiny, it is possible that it would use some measure of longevity and quality of life metrics to recommend and/or adjudicate health care coverage options for the Medicare and Medicaid programs. Commercial insurers would probably fall in line.
For an example of how QALYs can be used to prioritize the use of health care resources, check out this article that shows hypertension control among persons with diabetes saves money, while blood glucose control results in better quality/longevity but at an increasing cost that depends on age. The DMCB is aware that ridding the system of unwarranted variation, waste, defensive medicine and fraud could help pay for hypertension AND blood glucose control, but that’s not the point. The point is that BP control, blood glucose control and cholesterol control among persons with diabetes costs, on average, between –negative $1959/QALY to $51,000/QALY – which represents great value whether there is or isn’t variation, waste or fraud. If versions of disease management can deliver those outcomes at these or even lower prices, its future under a 'Health Fed' will be assured – even if it doesn’t save money.
Coronary artery stents may represent another particularly attractive deal in terms of the money spent per unit of life and quality, but also note no one is arguing that coronary artery stents ‘save’ money. They deliver value. In contrast, check out the value of admittedly more accurate but also pricey digital mammography. It does a better job of detecting cancer but is the price worth it?
Bob Stone of Healthways has it right in this recent editorial appearing in Disease Management. His recommended third approach of assuring access to optimized evidence-based care makes a lot of sense, assuming the evidence not only points to effectiveness but cost-effectiveness. If a Health Fed comes to pass, the population health industry can be confident that the outcomes it delivers at its prevailing fees for A1c and BP control in chronic illness will pass muster without having to contend with notions of ‘return on investment.’
If the DMCB was developing strategy on behalf of the disease management vendors with paid lobbyists, it'd be pushing an independent federal agency that aggressively and objectively evaluates the cost-effectiveness of health care interventions. And if 'Health Fed' legislation actually gained momentum, the DMCB would advise investors to go long on the industry.