In an article published this week in the New England Journal of Medicine, Stanford health economist Victor Fuchs, PhD, discusses how promoting "value-conscious" biomedical innovations could curb health-care costs associated with the growing elderly population. He advocates for shifting from an environment that encourages “progress at any price” to one where new technologies and therapies are designed to reduce the cost of care, as well as enhance quality of life for aging Americans. He writes:
Until now, most biomedical innovations have been evaluated (if at all) only in terms of their effect on the quality of care. Cost is usually ignored, which means that value is ignored as well. There have been a few key innovations that increase quality of care and decrease the cost of care, resulting in unambiguously positive value; examples are antibiotics and diuretics. Most innovations, however, increase both quality of care and costs. Their effect on value depends on the relative sizes of these increases. In a value-conscious environment, some of the most popular innovations would meet a reasonable value standard, but many probably would not.
An additional important result of a value-conscious environment would be the encouragement of innovations whose main effect is to substantially decrease cost while holding quality constant or reducing it only slightly. Such innovations are common in other industries but rare in medicine. If some of the resources devoted to marginal advances in the quality of care were reallocated to the development of innovations that reduced the cost of care, the problem of paying for high-value advances in quality for the entire population would be much easier to address.