Man with technology modules in hands Employers need confidence that their advisors are usingvalue assessment models that account for the factors that areimportant to both the patient and the payer. (Image:Shutterstock)


Employers rely on their health plans and benefits consultants toadvise them on coverage for a particular drug or treatment, basedon data about clinical benefits as well as costs. With steadilyrising prices and new therapies, however, employers faceincreasingly tough choices about coverage that affect bothemployees and company budgets. Employers have been pleased (so far)that their third-party advisors evaluate the evidence and makerecommendations and decisions on their behalf.


And yet, there is growing recognition that such recommendationsmay not be based on fully relevant data that includes the factorsthat 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 areuncertain about the information their trusted advisors use to makerecommendations and decisions, how can they be confident they areoffering 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 theInstitute for Clinical and Economic Review (ICER). By looking atclinical data and expected costs to assess cost-effectiveness, ICERposits a target "acceptable" launch price for a givendrug/therapy.


Estimates like ICER's provide a valuable data point forformulary planning and negotiations, but they have somelimitations. Part of the problem is that these value assessmentmodels are essentially a black box. There just isn't transparencyabout how the models used to analyze data work. A second andrelated issue is that some of these models don't include datameaningful to employers.


Among the most striking omissions from the "status quo" valueassessment methods: real-world patient experience data, clinicaldata about heterogeneous patient populations (i.e.,employee/patient subgroups), and indirect costs for patients andemployers, like absenteeism, disability costs, and the cost ofcaregiver burden.

The need for new models with greater flexibility

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


We don't claim to have "the right model," but by developingsomething open-source, we can show the process and inputs we use toarrive at a specific conclusion about value. We can alsodemonstrate how changing the inputs, based on what is mostimportant to the employer, can affect the conclusion. It is adifferent way of approaching value assessment than the status quo.And while we don't foresee a future where our small nonprofit hasall the models or all the answers, we believe this approach is animportant catalyst for needed industry-wide change — valueassessment that is more flexible, more relevant, and morecredible.

How employers can drive the change they want to see

Employers need confidence that their advisors are using valueassessment models that account for the factors that are importantto both the patient and the payer. They need to know these modelscan be tailored to fit their needs, for example, to look at morediverse patient populations, and that there are methods that canincorporate real-world data. And when possible, they need to beable to estimate/analyze the impact a particular drug (or othertreatment modality) has on indirect costs like caregiving, employeeproductivity/absenteeism, and disability.


But it's clear that employers don't have in-house expertise orresources 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 — thesethree essential questions:

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

Second, we encourage employers and their vendors to engage withorganizations like IVI and Patient Driven Values in HealthcareEvaluation (PAVE) that are working to improve methods and toolsthat support localized, customizable value assessment. Suchcollaboration gives data scientists insight into thedecision-making priorities of your organization, as well as theneeds of your employees.


Such insight allows us to develop open-source models thatsupport flexible analysis and decision making. Moreover, it raisesconfidence in the capability of your partners to recommend benefitdesign and formulary approaches that are patient-focused andcustomized to your unique needs as they evolve. Value assessment isa complicated process but an exceptionally important one. By askingthe right questions and working together, we can fine-tune economicmodels, thereby increasing their usefulness in identifying value inhealthcare that is significant to employees and employers.


Jennifer Bright is executivedirector of the Innovation andValue Initiative.

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