With rising demands and finite resources, health systems worldwide are under constant financial pressure. The US has been at the extreme end of high spending, with health expenditure consisting of 17% of its GDP in 2017 – compared with 9.8% for the UK and 8.7% for the average of the OECD countries (OECD). Therefore, the imperative of containing healthcare cost is mounting in the US. Under the Affordable Care Act (ACA), alternative payment models (often known as value-based payments) have been widely introduced to replace the fee-for-service model.
A recent article in JAMA highlighted a paradox, in which an apparent plateau in overall healthcare expenditure (at around 18% of US GDP) is contrasted with lack of significant success reported in individual evaluations of these alternative payment models. Why has health spending as a proportion of GDP plateaued when the interventions to reduce spending have been ineffective in doing so? The authors ruled out the explanation that the growth in GDP has outpaced the growth of health expenditures as the latter seems to be genuinely flattening. So how can this discrepancy be reconciled?
The authors offered three explanations:
- Anticipation of ACA-driven expansion of alternative payment models may have induced changes in the psychology and practice of clinicians and health care organisations, leading to curbs on spending irrespective of the introduction of alternative payment models.
- Primed by the above change in mindset, clinicians and health care organisations may have been influenced by their peers and emulate their practice. This would cause a wider spread of the change beyond the institutions where the alternative payment modelled were first introduced and evaluated (e.g. from within the Medicaid system to those covered by commercial insurers).
- Simultaneous introduction of a large number of alternative models in different places may have led to contamination of control groups in individual evaluations, where the control group chosen in one evaluation may be subject to the introduction of another alternative payment model.
Taken in the round, these explanations suggest a secular trend of system-wide changes (in this case cost containment), which may take various forms and be achieved through different means, but which are triggered by heightened awareness of the same issue and shared social pressure to tackle it across the board – what we have described as the ‘rising tide phenomenon’. The phenomenon is by no mean a rare occurrence in health services and systems research and so is well worth considering when a null finding is observed in a controlled study. The corollary is that when there is a rising tide, null findings do not disprove the potential effectiveness of the intervention being evaluated. A more nuanced interpretation taking into account the secular trend is required, as the authors of the aforementioned paper did.
Yen-Fu Chen, Associate Professor; Richard Lilford, ARC WM Director
- Organisation for Economic Co-operation and Development. Health. 2020. Available at: https://stats.oecd.org/Index.aspx?ThemeTreeId=9
- Navathe AS, Boyle CW, Emanuel EJ. Alternative Payment Models—Victims of Their Own Success? JAMA. 2020; 324(3):237-8.
- Chen Y-F, Hemming K, Stevens AJ, Lilford RJ. Secular trends and evaluation of complex interventions: the rising tide phenomenon. BMJ Qual Saf. 2016; 25(5): 303-10.