Unlocking Affordability and Access with HEOR

By Beth Fand Incollingo

Healthcare can only be widely effective if most patients can access and afford it. Yet, even within the most successful delivery systems, a host of barriers can interfere with health equity.

In high-income countries, the challenge is to provide comprehensive healthcare while preventing its overutilization. Countries with universal healthcare achieve that by providing only the drugs and services expected to be cost-effective, which can lead to out-of-pocket spending for patients who want more. The United States takes different tacks, one of which is to limit overuse through patient cost-sharing. Unfortunately, that often stresses household budgets and prevents people from obtaining needed care.

Meanwhile, many low- and middle-income countries (LMICs) grapple with limited market access to essential drugs, often coupled with insufficient mechanisms for reimbursing patients’ spending.

A 2023 report by the World Bank and the World Health Organization (WHO)¹ found that at least half the world’s population—4.5 billion in 2021—lack access to essential health services, with many experiencing poverty due to healthcare costs.

“The fact that so many people cannot benefit from affordable, quality, essential health services not only puts their own health at risk, it also puts the stability of communities, societies and economies at risk,” said WHO Director General Tedros Adhanom Ghebreyesus, PhD, MSc in an article published by the organization’s Pan American Health Organization.²

Experts conducting health economics and outcomes research (HEOR) are working to boost healthcare’s accessibility and affordability by identifying cost-effective ways to support individual access and worldwide economies and health.

“Fundamentally, HEOR helps us understand what we get for what we pay and whether spending money in a certain area provides us with worthwhile benefit,” said Anna Sinaiko, PhD, a health economist with Harvard’s TH Chan School of Public Health. “We have limited resources available in our healthcare system and our society, and we want to know what we’re getting in terms of outcomes related not only to health, but to patient experience, satisfaction, and quality of life.”

“The fact that so many people cannot benefit from affordable, quality, essential health services not only puts their own health at risk, it also puts the stability of communities, societies and economies at risk.”— General Tedros Adhanom Ghebreyesus, PhD, MSc

Strengthening Universal Healthcare

Reinhard Busse, Dr. med., MPH, head of the Department of Health Care Management in the Faculty of Economics and Management at the Berlin University of Technology, believes that universal healthcare—which citizens typically support through a flat-rate tax or a fixed percentage of their income—is the best way to ensure widespread and affordable access to essential services. Public systems should offer comprehensive, quality care to all or most, he said, with cost sharing limited to prevent financial hardship.

For instance, in Germany, cost sharing stops after patients have spent 2% of their gross incomes on healthcare—or 1% if they are chronically ill.³ That’s a much lower limit than in the United States, where the poorest residents spend 35% of their pretax incomes on healthcare while those in the country’s highest income decile lay out 3.5% of their pretax dollars.⁴

Successful public systems should also provide care opportunities that are geographically within reach for patients, with a wide range of facility hours and reasonable appointment wait times, he said, adding that patients should be able to choose doctors who speak their language and match their preferences regarding age, gender, ethnicity, or religion.

Cost challenges can include physician recommendations for care that exceeds the covered basics. For instance, patients may decide to pay out of pocket if their dentists recommend gold fillings instead of standard ones, while the system can be overburdened if orthopedic surgeons routinely prescribe unnecessary knee replacements.

“Politicians usually think the solution is to delist services,” Busse said, “but it’s really more about using HEOR to find the right target group for an intervention and making sure that only those people get it.”

Busse noted that drug costs are the major driver of catastrophic spending for patients who live in countries with universal healthcare. According to a 2023 report by WHO’s European Region,⁵ the biggest cause is insufficient primary care coverage including drugs, which was identified in all 40 countries studied and largely affected the poorest 5th of households.

In addition to covering primary care more comprehensively, the report’s authors suggested that countries limit copayments for people who are poor or sick, spend adequately, and cover everyone, including citizens who have fallen behind on their health insurance contributions and undocumented immigrants.

Inequities can also arise when voluntary private insurance is available alongside universal healthcare, Busse noted, as this may improve access and choice for the healthy and wealthy while drawing resources away from the public system.

Policy makers must consider cultural trends, too, he said, such as the common misconception that more healthcare is always better. “In Germany, we have 50% more hospitalizations than the countries surrounding us,”⁶ Busse said, “which amounts to an overprovision of services.”

Cultural preferences may also affect a country’s medical priorities, he said.

“People in East Asia, especially in Japan, tend to hate surgery but love imaging,” Busse said, “while in Germany, we believe that, if a surgeon has taken care of something, it has really been resolved.”

“Politicians usually think the solution is to delist services, but it’s really more about using HEOR to find the right target group for an intervention and making sure that only those people get it.”— Reinhard Busse, Dr. med., MPH

Establishing Price Transparency in the United States

In the United States, cost sharing is designed to discourage unnecessary medical visits, but it often creates barriers to essential care, especially for those in lower income brackets, said Sinaiko, who studies how consumer decision making within the context of American healthcare policy can help drive cost-efficiency.

Due to extremely high prices for care and coverage in the United States, she said, many are uninsured or underinsured, creating health disparities for Black and Hispanic or Latino Americans compared with their White and Asian neighbors⁷ and driving up overall healthcare spending. This creates a vicious cycle of ever-rising insurance premiums and increasingly limited access, she said.

A survey conducted by the Commonwealth Fund⁸ found that, in 2024, 9% of American adults were uninsured and 23% were underinsured. In addition, 12% had experienced a gap in coverage over the past year.

These inequities are perpetuated by the fact that various insurance types reimburse physicians at different negotiated rates for the same services, with private plans paying more than the country’s public programs, Medicare and Medicaid.⁹ Because Medicaid—which covers the poorest Americans—pays the least, Sinaiko said, the fewest providers accept it, deepening disparities in access.

Similarly, she said, patients pay different amounts for procedures and medications based on their insurance carriers and plans, even within the same hospitals and drug stores.

Because Americans don’t usually have easy access to data about which facilities will provide them with care at the best value, they can have a hard time making thoughtful financial decisions, and that’s why Sinaiko is exploring price transparency solutions.

Already in use are tiered insurance-plan networks that steer patients to their most cost-effective care options; self-insured employers that identify medical centers of excellence for their staff members based on value and quality; and price transparency tools offered by health insurers that estimate procedure costs at various facilities based on the parameters of each patient’s plan.¹⁰

A recent executive order by President Donald Trump¹¹ could bolster compliance with efforts launched during his first term to increase price transparency in healthcare, which called for hospitals to reveal what they’re paid for specific procedures and insurers to publish how much they disburse.

Also promising, Sinaiko said, is a Real-time Prescription Benefit Tool designed to help doctors identify the most affordable medications for individual patients.¹² Sinaiko’s team is working with an early adopter of the health informatics tool, the University of Colorado Health System, to explore its potential. Implementation of such a tool will be required by the Centers for Medicare & Medicaid Services (CMS) by the start of 2027.¹³

The overall goal of these efforts, Sinaiko said, is to slow the growth of healthcare costs in the United States, and an additional way to achieve that is through government negotiations on drug prices—a strategy CMS has begun pilot testing under the Inflation Reduction Act.¹⁴

“The question going forward is whether any of these market interventions can put enough downward pressure on prices to meaningfully improve affordability,” Sinaiko said. “If not, the government and other payers will likely move toward regulation to achieve this goal, such as by negotiating more drug prices or setting ceilings for commercial prices.”

“Fundamentally, HEOR helps us understand what we get for what we pay and whether spending money in a certain area provides us with worthwhile benefit.”— Anna Sinaiko, PhD

Boosting Access in LMICs

Due to healthcare inaccessibility, many diseases have lower survival rates and patient outcomes in LMICs than in high-income countries, said Moy Bracken, MPharm, a research unit manager with the Access to Medicine Foundation in Amsterdam.

For example, Bracken said, the survival rate for childhood cancers is approximately 80% in high-income countries but as low as 30% in some LMICs.¹⁵ She added that tuberculosis, a disease largely eradicated via antibiotics in most high-income countries, remains the biggest global killer among all infectious diseases, having taken the lives of 1.25 million people in 2023 alone.¹⁶

These statistics are not surprising, Bracken said, as people in LMICs face a host of healthcare barriers, including:

• Government health systems with small budgets and little negotiating power
• Insufficient or absent public health reimbursement mechanisms, resulting in patients either paying out of pocket or foregoing crucial medications
• Shortages of qualified healthcare workers and clinics
• Limited access to diagnostic care
• Lack of access to drugs due to gaps in manufacturing, the supply chain and research and development, which often does not focus on therapeutics for the diseases that disproportionately impact LMICs
• Sociocultural barriers arising from inefficient patterns of help-seeking behavior and health literacy¹⁷

The independent, nonprofit Access to Medicine Foundation is doing its part by encouraging the pharmaceutical industry to provide essential resources in LMICs.

“Without the manufacturers and patent holders of lifesaving medications on board, it would be much more challenging to bridge those gaps in access,” Bracken said. “Many international strategies for addressing major public-health problems in LMICs, such as malaria, tuberculosis, HIV, and antimicrobial resistance, are funded by international donors—both public and private—and one of their key partners is the pharmaceutical industry.”

The foundation’s initiatives include its Access to Medicine Index, which publicly ranks the efforts of 20 large research-based pharmaceutical companies to improve access to medications, vaccines, and diagnostics in LMICs. Most recently, the foundation launched research programs evaluating companies that manufacture and distribute generic drugs and those that supply medical oxygen.

“We evaluate companies’ performance to identify gaps in access and engage with the industry to share best practices,” Bracken said. “We also engage with investors committed to health equity who can drive change by bringing these issues into their conversations with companies.”¹⁸

Companies can engage in inclusive business models to ensure sustainable access for their products in underserved populations.¹⁹ Additionally, companies can work with product development partners, such as the Drugs for Neglected Diseases Initiative, to develop new therapies for diseases that disproportionately affect people in LMICs.

Pharmaceutical companies can also contribute by teaching healthcare professionals in LMICs to run clinical trials²⁰ and by providing products or care through memoranda of agreement with governments in those countries, Bracken said. And they can work with intermediaries such as the Medicines Patent Pool in Switzerland to offer licensing agreements that enable generic manufacturers to make versions of their brand-name drugs for use in LMICs.²¹

The latter mechanism has been used by companies such as Gilead²² and GSK²³ to increase access to medicines for communicable diseases, including treatments for HIV and hepatitis C.

Companies including GSK²⁴ and MSD²⁵ also participate in pooled procurement mechanisms, engaging with the international entity Gavi, the Vaccine Alliance, to increase the affordable and high-quality supply of HPV vaccines and other inoculations for children in LMICs, and Bayer partners with the United Nations Population Fund to provide affordable access to female contraception.²⁶

These initiatives can boost a company’s reputation, but they can also create opportunities to generate profits, Bracken said, particularly in middle-income countries that have significant manufacturing capabilities, larger health budgets, and large populations.

“Companies can implement tiered pricing models, where the price of the drug is determined by the country’s income level, which means that countries with lesser ability to pay can procure drugs at a lower price,” she said. “There is evidence to show that manufacturing locally can lower the cost of medicines, increase their availability, reduce taxes, and promote local sustainability.”

Looking ahead, the foundation wants to better support LMIC access to treatments for noncommunicable diseases like cancer, especially as more precision medicines emerge that are expensive and require genetic testing for patient eligibility.

“LMICs comprise 80% of the world’s population, so stakeholders have an ethical and moral responsibility to make essential medicines available there.”— Moy Bracken, MPharm

Addressing Global Concerns

Healthcare access and affordability depend upon international partnerships, and many of the world’s governments are involved in that effort.

In 2022, Luxembourg led the way by donating a higher percentage of its national income than any other country—.46%.²⁷ Still, in terms of sheer dollars, the United States has far outstripped its counterparts; in 2023, it gave $9.5 billion in aid.²⁸

Yet, a recent decision by the United States to halt much of its foreign aid threatens to affect healthcare access for 9 million people in Afghanistan, 750,000 in Haiti, and numerous others who previously benefited from America’s support of a global measles and rubella lab network and programs that curb devastation from tuberculosis and HIV.²⁹

In making decisions about foreign aid, Bracken said, it’s worthwhile for governments to consider the benefits of supporting healthcare in LMICs.

She noted that the United States significantly boosted its own economy by investing in American companies and institutions that conducted global health research and development.³⁰ In addition, she said, every country can benefit from efforts that keep infectious diseases from spreading.

“One example is dengue fever, which is spread by mosquitoes,” Bracken said. “Traditionally, it’s been prevalent in tropical countries, but now we’re seeing cases in southern Europe and the United States because of climate change.³¹ To prevent its spread requires international collaboration and funding mechanisms.”

Ultimately, she said, policy makers need to consider their obligations as global citizens.

“LMICs comprise 80% of the world’s population,” Bracken said, “so stakeholders have an ethical and moral responsibility to make essential medicines available there.”

HEOR is likely to factor into the bulk of decisions about access and affordability across a wide range of stakeholders, both domestically and internationally, she added.

“International procurers use HEOR to identify the most cost-effective solutions for different public-health priorities, and public payers and policy makers use it to determine the societal value of new innovations and efforts like HIV interventions,” Bracken said. “HEOR can also help advocacy groups build campaigns that affect pharmaceutical-company priorities and pricing decisions, with the potential to broaden overall access and affordability.”

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Beth Fand Incollingo is a freelance writer who reports on scientific, medical, and university issues.