December 23, 2020
By Naomi Lopez
The Biden administration is expected to unveil an ambitious policy agenda that is sure to include prescription drug pricing. But if the President-elect’s agenda has any resemblance to his campaign proposal, then Americans need to know about and publicly debate what the proposal might mean for them and those they love—and what it might mean is a system that limits needed care for the most vulnerable Americans.
Under the Biden plan, a so-called “expert” panel, modeled in part on some foreign countries’ healthcare systems and the private Institute for Clinical and Economic Review (ICER) in the United States, would assess the “fair” value of drugs. These models rely on a metric called a quality-adjusted life year (QALY), which assigns a value to a person’s life based on whether they’re sick, disabled, or old. Basically, such a person’s life is deemed to be worth less, and so this system determines that less money should be spent on treating them.
No one should doubt that the healthcare system in the U.S. has its own long list of shortcomings that deserve attention and discussion. But to observers in the U.S., patients who are subject to the QALY approach in other countries, such as patients in the U.K., face significant delay or complete unavailability of needed treatments due to this system of rationing. Too often, the tragic result is inferior or delayed care.
And one should also recognize that the medical innovations that we enjoy today are the product of generations of innovation. It is impossible to know ahead of time which medicines will change the trajectory of a disease or illness, as is how quickly that might happen. That is why it’s not only inaccurate to use these rationing metrics to make important treatment decisions, it also threatens the availability of treatment options since a seemingly expensive treatment today could be the basis of tomorrow’s cure.
It is these types of concern that have driven lawmakers at both the federal and state levels to limit the use of QALYs in coverage decisions. As part of the Affordable Care Act, Congress banned the use of these types of rationing metrics in cost-effectiveness reviews and evaluations in the Medicare program. In early 2020, Oklahoma lawmakers limited the use of QALYs in coverage decisions when it enacted HB 2587. Federal and state lawmakers should replicate this approach and prevent government payers from adopting QALY or similar measures to determine coverage, reimbursement, or utilization management decisions.
While it may seem like the twin goals of improving quality and reducing healthcare costs are incompatible, they are actually already being achieved through innovations in the areas of self‑care, minimally invasive procedures, and pharmaceuticals. Since hospital stays and nursing home care are enormously expensive, measures that reduce these costs would certainly be appealing.
It’s a basic fact that any limited resource that is also desired will face rationing. But the question for policymakers today is whether these important decisions in the area of healthcare should be made by an unelected, unaccountable panel of so-called experts. The process for determining value should be transparent, defer to the patient’s medical care team, and be open to independent scrutiny.
QALYs, the use of so-called “expert” panels, and other schemes that set arbitrary values to patients’ lives pose an immediate danger to both the quality of care for our most vulnerable patients and to the future of treatment innovations. This is particularly true when the lower-value of the life intends to bake-in a conclusion that would deny care.
Americans want real health security based on healthcare access and affordability—not a stealthy scheme to ration care that also threatens to undermine the availability of the newest medical treatments.
Naomi Lopez is the Director of Healthcare Policy at the Goldwater Institute. She is co-author, with Rafael Fonseca, M.D., of the recent Goldwater Institute report, Deciding What A Life Is Worth: The Top Three Things Lawmakers Need to Know About QALY.