NPC Creates Guiding Principles for Designing and Evaluating Health Care Spending Research and Policies

Rising U.S. health care spending is a significant and complex issue. Well-designed, rigorous research can help to identify the drivers of health care spending and whether that spending is providing sufficient value to patients and society. Using this research, policymakers can then create balanced, evidence-based solutions that control costs and promote high-value care without unintended consequences that could negatively affect patient health.

The National Pharmaceutical Council created a set of 18 guiding principles to foster the development of health care research and policies that improve health care spending efficiency and maximize patient health. The principles are divided into two parts: evaluating health care spending and reforming health care spending.

The first set of principles should be used when designing or evaluating health care spending research to ensure appropriate methodological rigor and acknowledgement of limitations. The second set should be used when designing or evaluating health care spending policies to ensure identification of tradeoffs and risks as well as implications for patient health.

“These principles serve as a checklist for assessing health care spending analyses and policies so that our conversations on health care spending are grounded in credible evidence and put patients at the center of the discussion,” NPC Vice President of Research Michael Ciarametaro said.

Principles for Evaluating Health Care Spending

To address rising health care spending, we must first diagnose the root causes through research using transparent, evidence-based, and consistently applied methods. These principles can be used to evaluate the rigor and appropriateness of the methods underlying health care spending analyses and their alignment with patient-centered care.

Health care spending analyses should:

• Consider the impacts of changes in health spending on patients and society
• Incorporate estimates of the actual amounts paid for medical care
• Recognize differences in spending across patients and time
• Account for changes in disease- or condition-specific epidemiologic measures
• Adjust for inflation
• Use data relevant to the analysis objectives
• Include a sensitivity analysis to elucidate any uncertainty in the evaluation  
• Place conclusions and policy recommendations in the appropriate context

Principles for Reforming Health Care to Address Rising Spending

Policies that seek to control or redistribute health care spending include efforts to change reimbursement approaches (e.g., alternative payment approaches), benefit design (e.g., greater use of high deductible health plans), and coverage policies (e.g., exclusion of low-value care services), as well as structural changes to the health system (e.g., elimination of drug rebates). These principles can be used to evaluate legislative, regulatory, and payer policies or actions to reform health spending by determining their alignment with patient-centered care and their likely impacts on short-term and long-term patient health.

Policies to address rising health care spending should:

• Align with the Triple Aim framework of health care improvement
• Be rooted in patient-centered value
• Recognize the differing needs of a diverse U.S. population
• Preserve or improve short- and long-term patient-centered outcomes
• Address the burden associated with financing care
• Target significant sources of inefficient spending across health care settings, services, and conditions  
• Discourage the use of low-value care and encourage the use of high-value care
• Address factors driving overall health care demand, including behavioral, cultural, and socioeconomic factors
• Address misaligned incentives that distort utilization and price
• Incentivize innovations that improve patient-centered outcomes

To read supporting details for each principle as well as illustrative examples of how to use them, read NPC’s full Health Care Spending Guiding Principles.