CFOs and benefits managers across the nation are listening keenly to Washington lawmakers’ discussions of solutions to high drug prices. Steps that could curb medication costs would certainly help the bottom lines of companies’ health care plans.
However, drug costs are not the greatest expense when it comes to health care. Many other factors affect health care spending, as the PwC Health Research Institute noted in its 2018 annual medical cost trends report. Notably, the report stated that “efforts by employers to cut utilization [of health care services] have mostly run their course.”
Assuming that analysis was sound, what are companies to do? Continually passing along higher costs to employees through higher deductibles and increased cost-sharing is not sustainable long-term.
Some companies may have luck with options such as direct purchasing agreements with hospitals or building on-site clinics. But such options aren’t necessarily feasible for any but large corporations — and they don’t really alter the underlying problems that lead to high costs.
Using What Works Best
One strategic asset CFOs and benefits managers can deploy in their efforts to achieve the greatest value for their companies’ workers and bottom lines is evidence about which treatments, tests, and prevention strategies work most effectively for different kinds of people.
In many cases, people have a menu of options to care for their injuries or illnesses. The billions of U.S. dollars invested in the discovery and development of new therapies and tests provides ever more choices. But that doesn’t answer two essential questions: (1) How do those new options compare with what’s already available? (2) Which of them might best suit the needs and circumstances of people like you?
That’s because few new diagnostics or therapies are tested in ways that compare how well they perform against other options for the same condition. And most are assessed in test populations that are not widely diverse.
Yet in real-world practice, we’ve seen many times over that what works well for one type of person — say, a generally healthy 35-year-old African-American woman — may not work as well for a 50-year-old white man with diabetes, for example.
It’s also important to know whether various approaches to delivering these treatments and tests make a difference in how well they work or how convenient or accessible they are to people who need them. For instance, does the same asthma treatment regimen work equally well for both suburban residents and their city-dwelling counterparts?
Comparative effectiveness research, or CER, is a specific branch of health research that focuses on comparing the health benefits and potential side effects of different care options for a condition. The goal of the research is to determine which options work best for which kinds of patients and under which circumstances.
For example, CER answers questions like whether exercise coaching by a therapist over video alleviates low back pain better, worse, or the same as physical therapy conducted in a rehab clinic. Moreover, it explores how well such exercise coaching works for a 48-year-old man with a heart condition as compared to a generally healthy 38-year-old man.
CER got a major boost when the Patient-Centered Outcomes Research Institute was authorized by Congress in 2010 as the nation’s first research funder to focus exclusively on supporting CER. Since it began funding in 2012, PCORI has invested more than $2.4 billion to support CER.
PCORI-funded research is answering questions about back pain, opioids, diabetes, weight loss and prevention of obesity, mental health care, and many other conditions and topics that matter to workers and employers.
CER results can help inform choices by patients, clinicians, and those designing health plans and benefits.
For example, a PCORI-funded study showed that for people with the non-insulin-dependent form of type 2 diabetes, use of daily finger sticks to test blood sugar levels didn’t achieve better control of the disease than forgoing that daily monitoring. Test strips cost an average of $325 per person per year in this population. So, avoiding daily testing by these individuals could save $2.3 billion per year.
Another study compared the three most commonly used forms of weight loss surgery. It found that gastric bypass surgery yielded greater weight loss and kept more weight off five years afterward than either sleeve gastrectomy, a newer procedure, or adjustable gastric banding. This is helpful information for all those dealing with the consequences of obesity.
Avoiding Lost Value
Pursuing suboptimal or ineffective therapies can result in unnecessary suffering and aggravated symptoms, which can then reverberate in the workplace in the form of absence from work, lower productivity, and underperformance.
For example, nearly one in four U.S. employees report experiencing low back pain. The condition costs businesses $51,400 annually per 100 employees in lost productivity and medical treatments, according to the nonprofit Integrated Benefits Institute. Employees with back pain are absent four more days per year than those without the condition and have the equivalent of 4.4 more days of underperformance annually, IBI found.
Any illness that keeps employees away from their jobs or prevents them from putting in their best performance means companies lose more than just the costs of getting sick people well again. They lose all the value that healthier employees would have created.
That’s why, in addition to the nation’s multibillion-dollar investments in research to discover and development innovative new diagnostics, therapies, and prevention strategies, we also need to continue investing in CER. It’s vital to figure out when and for whom those innovative products and strategies work best.
And to get the best value for their health benefits and their employees’ premiums, employers need to take advantage of this growing body of evidence.
Thomas Parry is president of the Integrated Benefits Institute and president of the Center for Workforce Health and Performance. Lawrence Becker is a board of governors member of the Patient-Centered Outcomes Research Institute and former director of strategic partnerships and alliances for Xerox Corp.