Employers rely on their health plans and benefits consultants to advise them on coverage for a particular drug or treatment, based on data about clinical benefits as well as costs. With steadily rising prices and new therapies, however, employers face increasingly tough choices about coverage that affect both employees and company budgets. Employers have been pleased (so far) that their third-party advisors evaluate the evidence and make recommendations and decisions on their behalf.

And yet, there is growing recognition that such recommendations may not be based on fully relevant data that includes the factors that employers care most about. Beyond just clinical evidence, employers care about real-world patient experience and costs, including indirect costs like employee absenteeism. If employers are uncertain about the information their trusted advisors use to make recommendations and decisions, how can they be confident they are offering the right coverage to employees and their families?

Value assessment status quo: Limited, opaque methods

When making their recommendations and decisions about coverage, health plans and consultants rely on a combination of analyses, including value assessments published by organizations like the Institute for Clinical and Economic Review (ICER). By looking at clinical data and expected costs to assess cost-effectiveness, ICER posits a target "acceptable" launch price for a given drug/therapy.

Estimates like ICER's provide a valuable data point for formulary planning and negotiations, but they have some limitations. Part of the problem is that these value assessment models are essentially a black box. There just isn't transparency about how the models used to analyze data work. A second and related issue is that some of these models don't include data meaningful to employers.

Among the most striking omissions from the "status quo" value assessment methods: real-world patient experience data, clinical data about heterogeneous patient populations (i.e., employee/patient subgroups), and indirect costs for patients and employers, like absenteeism, disability costs, and the cost of caregiver burden.

The need for new models with greater flexibility

The Innovation and Value Initiative (IVI), the nonprofit I represent, was founded in 2016 to try to address some of these issues. We've developed a new Open-Source Value Platform (OSVP) to help test out new methods and models to assess value. The OSVP, as the name suggests, is a transparent and open-source system. The models we build within the platform can be used to estimate the value of drugs and other medical technologies in a way that centers on the patient, allows for a broad range of perspectives, incorporates the latest available evidence, and considers the full range of scientifically-defensible approaches.

We don't claim to have "the right model," but by developing something open-source, we can show the process and inputs we use to arrive at a specific conclusion about value. We can also demonstrate how changing the inputs, based on what is most important to the employer, can affect the conclusion. It is a different way of approaching value assessment than the status quo. And while we don't foresee a future where our small nonprofit has all the models or all the answers, we believe this approach is an important catalyst for needed industry-wide change — value assessment that is more flexible, more relevant, and more credible.

How employers can drive the change they want to see

Employers need confidence that their advisors are using value assessment models that account for the factors that are important to both the patient and the payer. They need to know these models can be tailored to fit their needs, for example, to look at more diverse patient populations, and that there are methods that can incorporate real-world data. And when possible, they need to be able to estimate/analyze the impact a particular drug (or other treatment modality) has on indirect costs like caregiving, employee productivity/absenteeism, and disability.

But it's clear that employers don't have in-house expertise or resources to build these models themselves, so what can they do? First, they can start to move the needle by asking their vendors — including health plans, PBMs, and benefits consultants — these three essential questions:

Does your internal analysis focus solely on clinical evidence (i.e., randomized control trial data) or does it also incorporate real-world data sources? If so, which sources of real-world data are used to understand patient experience in treatment and patient subgroup response to treatments?
Does your value assessment evaluate treatment factors that are important to patients and their caregivers and may have an impact on indirect costs? (e.g., adherence, caregiving, disability, productivity/absenteeism)
Our employees and their families represent a diverse population, both demographically and with respect to health status and health needs. What are your short- and long-term plans to evaluate value and make recommendations to us for benefit design and management that better reflects that diversity in a way that is relevant to our decision-making?

Second, we encourage employers and their vendors to engage with organizations like IVI and Patient Driven Values in Healthcare Evaluation (PAVE) that are working to improve methods and tools that support localized, customizable value assessment. Such collaboration gives data scientists insight into the decision-making priorities of your organization, as well as the needs of your employees.

Such insight allows us to develop open-source models that support flexible analysis and decision making. Moreover, it raises confidence in the capability of your partners to recommend benefit design and formulary approaches that are patient-focused and customized to your unique needs as they evolve. Value assessment is a complicated process but an exceptionally important one. By asking the right questions and working together, we can fine-tune economic models, thereby increasing their usefulness in identifying value in healthcare that is significant to employees and employers.

Jennifer Bright is executive director of the Innovation and Value Initiative.

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Instant Insights /

3 questions to ask to improve your value assessment of benefits

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