This op-ed by Shira Schoenberg appeared in MassLive on April 25, 2019.
The debate over former vice presidential candidate Sarah Palin’s inaccurately named “death panels” has come to Massachusetts.
The debate centers on a measure of cost-effectiveness for health care, which assigns a value to a life that changes based on whether a person is healthy.
The Affordable Care Act – after public outcry – bans the use of the measurement in Medicare. Now, Rep. Angelo Puppolo, D-Springfield, is trying to ban its use by MassHealth or private insurers in Massachusetts.
“I don’t think rationing care, in particular prescription drugs, to the sickest and oldest patients should be a formula that’s used,” Puppolo said.
Puppolo’s amendment was not included in the House budget, but he said his goal in introducing it was to “start debate.”
In health care, there is a measurement called quality-adjusted life year, or QALY. QALY assigns a value to a year of life, taking into account whether someone is healthy, sick or disabled. That number is used in calculating the value of a treatment.
For example, an illness may confine someone to a wheelchair. If one drug extends the patient’s life by a year while letting them walk again, and a second drug extends their life for a year without restoring that ability, the drug that restores mobility would be valued higher.
There are national, and international, debates about whether this is an appropriate measure, and how, if at all, it should be used.
The main organization that uses this method today in the U.S. is the Boston-based Institute for Clinical and Economic Review, or ICER. ICER analyzes the value of medical treatments and posts the analyses on its website.
ICER President Steven Pearson said analyzing cost effectiveness is a way to make sure that whatever money is available for health care is spent in the way that most improves health. Using QALYs is a way “to capture how well treatments can improve patient lives,” Pearson said.
As the health care system struggles to address high drug prices, Pearson said ICER analyses can be used to negotiate lower prices. “Cost effectiveness is about saying at what price would it be fair?” he said.
For example, when the cholesterol drug Repatha was introduced in 2015 and priced around $14,000, insurers looked at ICER’s analysis that deemed it overpriced and made it harder for patients to get coverage. In 2018, the drugmaker lowered the price to $5,800, and insurers improved access.
Pearson said he recognizes this approach is controversial because it can lessen access to drugs. But he hopes cost-effectiveness is used to negotiate fair prices, not deny access.
Pearson also argued that the U.S. already “rations care” based on who can afford insurance coverage – and high drug prices raise insurance premiums. “We ration care every single day in this country. We just do it the wrong way,” he said.
ICER is funded primarily by the Laura and John Arnold Foundation, and also takes money from the insurance industry.
However, advocates for people with disabilities say it is immoral to assign a lower value to the life of someone with a disability. They worry that the measure could be used by insurers to deny coverage for groundbreaking drugs to someone with a disability because the treatment is not deemed cost-effective.
“It’s inherently wrong to be using equations to ration out health care,” said Bill Murphy, director of advocacy and public policy for the Epilepsy Foundation New England.
Murphy said using QALY contains costs in a discriminatory manner. “It’s looking at the quality of life of healthy people, and it’s saying the quality of life for a person with a chronic condition or a disability isn’t the same,” Murphy said.
(ICER has started using another measure in addition to QALY, which values all years of life equally.)
William Smith, visiting fellow at the Boston-based Pioneer Institute who previously worked for Pfizer, the White House Office of National Drug Control Policy and Republican governors in Massachusetts, said another problem with QALY is it sets the value for a life using the same dollar amount whether someone is a pediatric oncology patient or an older adult with a fatal disease. “Because QALYs are applied to all patients and all therapies, they can’t provide context for therapies to treat oncology patients, disabled patients, patients with rare disease and other types of patients that have unique challenges and conditions,” Smith said.
Opponents of QALYs point to Europe as an example of what could go wrong.
In the United Kingdom, a board that determines what drugs are covered under the British National Health Service, the government-run health system, uses QALYs to determine what drugs to cover. After a decade of research showed that cancer patients were dying earlier than in other countries because they lacked access to certain oncology drugs, Parliament voted to pay for cancer drugs regardless of their cost-effectiveness.
“It is a way to ration care,” said Terry Wilcox, co-founder and executive director of Patients Rising, a Washington, D.C-based advocacy group that works to increase access to care for patients with chronic and life-threatening diseases. The group takes funding from private foundations and companies, including some pharmaceutical companies.
Wilcox called the QALY metric “inconsistent and unfair,” because if someone has a disease or disability, their life is valued lower than if they were healthy, so the person with a chronic condition who most needs medication could be denied access.
The debate over the Affordable Care Act sparked intense criticism of the potential for measuring cost-effectiveness to lead to health care rationing, with Palin coining the inaccurate phrase “death panels.” The law ultimately banned the use of QALYs or a similar measure in Medicare.
But there are instances where it is used in the U.S. New York’s Medicaid program used a QALY analysis to negotiate a lower price on a cystic fibrosis drug. CVS Caremark recently said it will allow self-insured clients to exclude from their coverage drugs that are not deemed cost effective, using a QALY measure. (This will not apply to “breakthrough” drugs.)
In Massachusetts, Gov. Charlie Baker has proposed giving MassHealth new authority to set drug prices for high-cost drugs based on a public rate-setting process.
According to the Executive Office of Health and Human Services, the MassHealth proposal “does not nor would not use any measures or methodologies for drug pricing that would have the effect of devaluing the life of an individual with a disability.”
Puppolo wants to ensure that MassHealth and private insurers never adopt this method. He said it is about ensuring access. “At the end of the day, if someone needs medicine and you have insurance…you should be able to access that medicine that a doctor or health care provider deems medically necessary,” Puppolo said. “We should not be able to use formulas for MassHealth or a private payer in terms of cost benefit analysis as a sole determining factor, or any determining factor, as to whether or not a patient deserves the care.”
Massachusetts health insurers oppose Puppolo’s amendment.
In a letter to legislative leaders, the Massachusetts Association of Health Plans and other business groups wrote that the QALY is the “gold standard” for measuring how a medicine improves patients’ lives. They wrote that cost effectiveness analysis is a tool for keeping the price of drugs down by determining a fair price.
“The added cost per QALY gained for new treatments remains one of the best ways for policymakers to understand how well the price of a treatment lines up with its relative benefits and risks for patients compared to other treatment options,” the business groups wrote.