Making the Impact of HEOR Loud and Clear
By Christiane Truelove
When it comes to the effects health economics and outcomes research (HEOR) has on the world of healthcare, the results are often getting lost in the “real world.” ISPOR has continued its multiyear initiative, AMPLIFY HEOR, to highlight “the impact of HEOR” through case studies and stories. Although many studies have generated evidence showing how HEOR can be used to improve health and how healthcare is delivered, outside of the HEOR bubble, it’s difficult to connect how that information can influence and shape health policy. Ultimately, scientists need to become better communicators about what they do, how they do it, what impact it has outside of their specialties, and why non-HEOR experts should care.
Recognizing a problem, finding a solution, and communicating it broadly: Smoothing the impact of cost sharing in the US Medicare Part D program
Jalpa Doshi, PhD, Leon Hess professor of Internal Medicine at the Perelman School of Medicine, director of Value Based Insurance Design Initiatives at the Center for Health Incentives and Behavioral Economics, and director of the Economic Evaluations Unit of the Center for Evidence-Based Practice at the University of Pennsylvania in Philadelphia, has focused her research program on applying rigorous HEOR and policy methods to identify evidence-based approaches to promote equitable access and appropriate utilization of high-value medications. One of the key areas her research team has contributed to is fixing Medicare Part D cost-sharing policy to enhance access to specialty drug treatments.
“I quickly noticed that given ongoing trends, the remaining issues with the Part D cost-sharing design were going to generate major access issues for those needing specialty drugs.”— Jalpa Doshi, PhD
“The need to address the issue of improving access to medications came to my attention more than 20 years ago, when I was working on research that ultimately supported the creation of the Part D drug benefit under the Medicare Modernization Act of 2003,” Doshi explains. “While that was very exciting to see at an early stage in my career, it was apparent to me that there was going to be a lot more work to be done to get things right. And why was that? Because the cost-sharing requirements under the Part D benefit were so poorly designed that they would continue to result in medication access barriers and disparities for many beneficiaries.”
Her team’s early work on Part D, after its implementation in 2006, focused on traditional drugs like most other researchers. Initially, the Part D coverage gap (also known as the “donut hole”) issue got the most attention. Congress responded and planned to phase out the coverage gap through the passage of the Affordable Care Act in 2010. “While the donut hole fix was welcome news, I quickly noticed that given ongoing trends, the remaining issues with the Part D cost-sharing design were going to generate major access issues for those needing specialty drugs,” Doshi says. The number of specialty drug treatments offering advances over traditional drugs was increasing rapidly across multiple disease areas, and many of these novel drug treatments cost tens of thousands of dollars per year. Even after the donut hole fix, the Part D cost-sharing structure required patients to pay a high coinsurance rate ranging from 25% to 33% of the specialty drug’s cost. Additionally, there was no annual out-of-pocket maximum, and patients had to continue paying a 5% coinsurance in the catastrophic coverage phase. Given the large racial and ethnic disparities in the income and assets of Medicare beneficiaries, the very high out-of-pocket costs for specialty drugs under Part D were likely going to exacerbate the inequities in access that already existed,” Doshi says. “It was a perfect storm in the making, but not really on the radar of policy makers.”
In response, starting around 2011, she pivoted her entire team’s research into the specialty drug area. Activities were in 4 areas: (1) highlighting the problem; (2) showing the negative consequences associated with the problem; (3) proposing policy solutions on how to fix these cost-sharing issues; and (4) disseminating this work to reach the audiences that could make a difference. Doshi and her team’s work highlighted that the existing Part D cost-sharing structure resulted in specialty drug users spending thousands of dollars out-of-pocket each year. Additionally, these out-of-pocket costs were typically “front loaded” at the beginning of the calendar year. “We illustrated that even if an annual out-of-pocket maximum of $2000 was put into place, the 25% coinsurance requirement would result in a Medicare beneficiary having to pay the entire $2000 as a lump sum in January alone if they were using an expensive specialty drug,” she says.
Most Medicare beneficiaries could not afford such high costs, which Doshi and her team demonstrated using real-world Medicare claims data. Her team published multiple papers to show the negative consequences of specialty drug cost-sharing burden—high rates of prescription drug abandonment, delays in treatment initiation, nonadherence, and early discontinuation of specialty drug treatments.
“Specialty drug users were simply being asked to pay too much, too soon during the year and our idea of combining an annual Part D out-of-pocket cap with smoothing offered an actionable policy solution to this problem.”— Jalpa Doshi, PhD
In 2016, her team proposed a novel solution to addressing this problem: an annual Part D out-of-pocket cap combined with monthly caps to distribute these costs more evenly throughout the year (also known as “smoothing”). With smoothing in place, and an annual out-of-pocket cap of $2000, patients would be able to spread out what was owed in January over the entire year, essentially requiring patients to pay just about $167 per month. “Specialty drug users were simply being asked to pay too much, too soon during the year and our idea of combining an annual Part D out-of-pocket cap with smoothing offered an actionable policy solution to this problem,” Doshi says.
Next, Doshi wanted to move this information from the traditional academic publications and scientific conferences to the stakeholders who could really make a difference. Her team pursued multiple dissemination strategies, including participating in the 2016 and 2017 Patient Access Network (PAN) Foundation Challenge, national competitions in partnership with the American Journal of Managed Care asking researchers to submit papers demonstrating the adverse impact of cost sharing and proposing policy solutions. “We participated in these competitions, won awards, but most importantly, we had the opportunity to present our policy solution in front of an audience that included patient advocacy groups, policy makers, and other stakeholders,” Doshi says. Soon after, several advocacy groups adopted her team’s policy recommendations as part of their formal advocacy position. Over the next few years, she and team members developed more digestible communications for policy audiences, such as blogs and commentaries, participated in interviews on panels such as The Hill’s healthcare event, and partnered with the PAN Foundation to create an infographic that was widely used in advocacy efforts and shared with Congressional staffers and in written testimony. Eventually, the Inflation Reduction Act of 2022 incorporated her team’s idea with provisions for an annual out-of-pocket maximum combined with an option for smoothing via monthly payments under Medicare Part D, both of which will go into effect starting January 1, 2025. These changes will help approximately 3.5 million Medicare beneficiaries and millions more in the future with novel high-cost drug treatments rapidly entering the market in nearly all disease areas.
“I think one of our biggest problems is that we are still not able to use simple language to bring “[the impact of HEOR] to life.”— Jens Grueger, PhD
Communicating value means being concrete
Doshi and her team’s strategy and efforts in communicating their findings is a good example of what HEOR scientists can do in order to maximize the real-world impact of their work. But not every research team is able to proactively engage advocacy groups to channel their research and influence policy. This is where ISPOR members’ efforts continue to be instrumental in shaping the conversation about the impact of HEOR, says Jens Grueger, PhD, Boston Consulting Group’s senior expert for pricing and market access in healthcare based in Zurich, Switzerland. “When you speak to people, they view ISPOR as a scientific platform where we talk about HEOR, recognizing that there are certain things that we need to discuss here: What are the standards for HEOR? How do we use it to improve decision making? For this, we have to bring forward new concepts, which is something that ISPOR has been extremely successful in doing.”
“For example, many see ISPOR’s Value Flower as a brand, in some ways,” Grueger says. The “value flower” reaches beyond health gains and financial gains to shape discussions about health equity, environmental sustainability, and resilience of healthcare systems. “I think that’s a very important piece that we are seeing.”
“We need to focus more on that communication piece—not only from our leaders in HEOR, but also begin training our young colleagues to recognize that communication is an important piece for what they’re doing.”— Jens Grueger, PhD
But HEOR experts need to go beyond discussions about technical competencies. “We need a broader perspective,” Grueger says. “It’s not just about the technology, it’s about how we provide more equitable healthcare. It’s about how we organize things and take that broader perspective— then the technology becomes just an element of that.”
A larger issue that persists is how HEOR scientists communicate about what they do and why it is important. “I think one of our biggest problems is that we are still not able to use simple language to bring it to life,” Grueger says.
When Grueger’s two daughters were growing up, he often found himself having to explain to their friends what he did as a health economist in the pharma industry, and the factors behind drug pricing decisions. “I had to explain to these school children what is the value framework people use in evaluating medical treatment and use very simple language. Several minutes later, they said, ‘That’s a very interesting perspective. Now I understand that it’s not about profits. It’s about the evidence that you are producing; it’s about the value that is associated with these outcomes that you’re producing; and the prices are a consequence of that.’ It made them realize that these decisions aren’t simply pulled from thin air.’”
Grueger has also had to conduct communication courses for senior managers in pharma on health economics, pricing, and profitability. “When you have a microphone in front of you and then CNN asks you, ‘So what about the price for this new medicine?’ That’s when people tend to freeze and try to pivot to a different topic.” Grueger says. “We need to focus more on that communication piece—not only from our leaders in HEOR, but also begin training our young colleagues to recognize that communication—that is, translating and synthesizing the key results of their research—is an important piece for what they’re doing.”
“It’s not that it’s easy to do, but you get more confident as you practice these things. We practice building models; we practice doing scientific proofs. We also have to practice our communication.”
In his career as a health economist, Darius Lakdawalla, PhD, director of research at the USC Schaeffer Center for Health Policy & Economics in Los Angeles, California, is familiar with the struggle of communicating the value of products. Too often, people who complain about the cost of a drug dismiss the innovation incentive. “There seems to be a resistance to that economic idea when it comes to paying the price for the therapies we have today,” Lakdawalla says. “This is an issue that cuts across all types of high-cost drugs. Take, for example, innovative treatments for hepatitis C, that were brought to market in 2013. Even though these new drugs replace regimens that cost a lot of money on a lifetime basis, people were hung up on the $1000 sticker price of each pill. I put it in these terms with one reporter: If there were one pill that would cure your disease but it costs more than $80,000 for the pill, would you pay it? The point is that it doesn’t make sense to complain about the unit prices of the things just because they’re cheap to produce when it’s ultimately about value.”
“It doesn’t make sense to complain about the unit prices of the things just because they’re cheap to produce when it’s ultimately about value.”— Darius Lakdawalla, PhD
He admits that explaining value still remains a problem. “It helps to make things more concrete, which is something we’ve tried to do. For instance, when you pay for innovation, it’s not just that you get more innovation. It’s that you extend human life and you make lives better. Putting it in these terms helps, but it doesn’t completely bridge the gap. There will still be people who say, ‘if these things are so cheap to produce, why should we pay so much for them?’”
To get to the other side of these cost vs value arguments, health economists and HEOR experts must be able to succinctly sum up their work. Recently, Lakdawalla and colleagues at USC Schaeffer produced a paper showing Medicare coverage of drugs for treating obesity could significantly reduce costs. They calculated that coverage for new obesity treatments could generate approximately $175 billion in cost offsets to Medicare in the first 10 years alone, and by 30 years, cost offsets to Medicare would increase to $700 billion. And in an earlier paper on pricing, Lakdawalla and colleagues explained that if the United States instituted European-style drug pricing measures, Americans would lose more than half a year of longevity, which is about the same as what would happen if every cardiac surgeon in America suddenly forgot how to perform bypass surgery, he says. “Now that kind of analysis resonates more with people than just talking about elasticities and this innovation effect and that change in the number of drugs launched, that’s all too theoretical. It has to be made as concrete as possible.”
In the end, investment in health innovation has to be examined like any other investment, whether it’s building bridges and airports or investing in microchip manufacturing factories. “It’s all in the question of whether it’s worth it to invest in these things or not,” Lakdawalla says. “The way that I would look at it is: Does the rate of return on the investment make sense or not?”
“Does the rate of return on the investment make sense or not?”— Darius Lakdawalla, PhD
HEOR experts and health economists should be paying attention to what patients care about, which is important for several reasons, Lakdawalla says. “It shows us when our theories are wrong. If we’re really paying attention to what patients are doing and the theory is inconsistent with what patients are doing, then it’s wrong and needs to be fixed. But it’s also about how you communicate the work. If you are paying attention to what patients care about, then you ought to be communicating the work in the terms that patients care about. I think that we should always be communicating in terms of outcomes that ordinary people—people who are not academics—care about. And that message has to be framed in a way that people can readily understand.”
While people have to be made to care about innovation incentives, they don’t have to be made to care about their life expectancy, their health, or their kids’ probability of surviving into adulthood. “These are all obvious human values. And the more we can be communicating our findings in terms of those human values, the easier it’s going to be to have an impact on decisions outside of our little world,” Lakdawalla says.
Christiane Truelove is a healthcare and medical freelance writer.