Value assessments in health care tend to focus on pharmaceuticals rather than services and procedures, despite the outsized contribution of services and procedures to health spending. We use the term “value assessment” to refer to explicit consideration of health benefits and economic costs through various analytic techniques. In the US, services and procedures comprise roughly 70 percent of health spending, but encompass 42 percent of published cost-effectiveness analyses (CEAs). In contrast, prescription drugs account for roughly 15 percent of total US health spending but 43 percent of CEAs. The Institute for Clinical and Economic Review (ICER), a value assessment organization in the US, focuses almost exclusively on pharmaceuticals.
Measuring the value of drugs is vital. But the lack of attention to services and procedures neglects opportunities to achieve broader systemwide efficiency and affordability, and may distract focus from the largest categories driving health costs.
Abundant research has documented substantial US spending on wasteful, unnecessary or “low-value” services and procedures, with some estimates approaching $1 trillion annually. Several US organizations, including the US Preventive Services Task Force (USPSTF) and the American Board of Internal Medicine Foundation’s Choosing Wisely initiative, have developed lists of low-value or potentially unnecessary services and procedures.
These lists are valuable, although they are generally based on informal prioritization processes. Moreover, whether a service or procedure is deemed “low value” or “unnecessary” has generally not included economic criteria. Most commonly, medical societies have labeled an intervention as “low value” based on assessments of clinical evidence alone. The USPSTF examines clinical outcomes and net benefit of low-value care but does not consider costs relative to benefits.
Researchers have underscored that tackling the problem of low-value or unnecessary care will require multifaceted remedies, including financial incentives to discourage it, quality-improvement and educational efforts that highlight overuse, and organizational changes, such as behavioral nudges (such as leveraging electronic health records to deliver suitable prompts). But it will also require more formal value assessment.
Certain factors make it challenging to conduct value assessments on services and procedures, including the lack of randomized clinical trial evidence, which can make measurement of effectiveness difficult. The absence of intellectual property rights for most procedures and services means that, compared to pharmaceuticals, there are weaker incentives for researchers to conduct effectiveness research on those interventions. Another factor is the influence of physicians’ learning and experience, which is generally greater for procedures versus pharmaceuticals, and which is challenging to measure and incorporate into analyses. Yet, another is that prices for services and procedures vary widely based on insurer, location, and setting of care.
These challenges are not insurmountable. There are numerous examples of high-quality applications of value assessment for services and procedures in the literature, including recent cost-effectiveness analyses on kidney transplantation, total hip arthroplasty, and thrombectomy. However, even if consensus exists that more assessments are necessary and feasible, a key question is how policy makers should prioritize them. The field requires more systematic and formal efforts in this regard.