Decoding payer perspectives: Insights from Ben Penley

What has inspired this research?

We wanted to understand, first, whether payers were willing to pay more for certain interventions with “novel value attributes,” or interventions that have some extra component of value that’s hard to quantify; and second, what impact higher thresholds might have on cost-effectiveness determinations.

The Institute for Clinical and Economic Review (ICER) conducts health technology assessment and uses cost-effectiveness thresholds, which are informed by willingness to pay (WTP) thresholds, to determine whether interventions are “cost-effective.” In ICER’s reports, interventions with novel value attributes can be considered cost-effective at or under $150,000 per quality-adjusted life year (QALY).

In past research, we found that 74% of payers acknowledged the significant impact of ICER reports on their decision-making processes, with 62% actively incorporating these reports into their coverage decisions. These findings highlight the pivotal role of ICER—and the cost-effectiveness thresholds that they hold interventions to—in shaping coverage decisions and ultimately influencing patient access to these treatments.

What are the key takeaways from your research?

We looked at ICER assessments and found that several reviewed interventions had novel value attributes—six were groundbreaking durable or curative treatments, seven treated higher severity diseases, and five had positive impacts on health inequities.

We found that by slightly increasing cost-effectiveness thresholds, there was an increase in the number of interventions that would have been considered cost-effective by ICER.

• By increasing the threshold to $200,000 per QALY, we found out that six out of six groundbreaking durable or curative treatments would have been considered cost-effective by ICER (up from four out of six at $150,000 per QALY).
• By increasing the threshold to $250,000 per QALY, we found out that five out of five interventions that have a positive impact on health inequities would have been considered effective (up from two out of five at $150,000 per QALY threshold).
• For interventions that treated higher severity diseases, however, the cost-effectiveness threshold would have to increase all the way to $11,000,000 per QALY for all interventions to have been considered cost-effective.

Was there a hypothesis that was confirmed through the research?

In our research, we confirmed that payers were willing to pay more for interventions with novel value attributes. Approximately 75% of payers demonstrated a greater WTP for groundbreaking durable or curative treatments; 40% of payers were inclined to allocate additional resources towards treatments targeting higher severity diseases; and when it came to interventions addressing health inequities positively, 33% of payers indicated a higher willingness to pay.

In reviewing ICER reports, we also confirmed that the use of slightly higher cost-effectiveness thresholds had a big impact on whether interventions with novel value attributes were considered cost effective.

What are the next steps from this research?

We understand, now, the types of interventions for which payers are willing to pay more. It would be enlightening to next understand how much more payers are willing to pay for these interventions.

In addition, ICER recently updated its value assessment framework, revising the list of novel value attributes that it assesses. Exploring payers’ WTP for these newly assessed attributes, like an intervention that addresses an unmet need, could yield valuable insights.

To learn more about Ben’s research, view his podium presentation here 

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