As health care costs balloon in the U.S., experts say it may be important to analyze whether those costs translate into better population health. A new study led by a Penn State researcher analyzed existing data to find a dividing line — or “threshold — for what makes a treatment cost-effective or not.

David Vanness, professor of health policy and administration, led a team of researchers that created a simulation to consider health care treatment costs, insurance premiums, quality of life, and life expectancy to explore whether a treatment delivers enough value for its costs to be considered beneficial for population health.

According to Vanness, the term “treatment cost” in this research incorporates all the costs and savings related to a treatment. For example, the cost of a treatment to lower blood cholesterol would include how much it costs but also take into account potential savings for preventing a heart attack and its subsequent treatment.

“We know that we are spending more and more on health care in the U.S. and that we’re getting less and less for it,” Vanness said. “We do a good job of developing new treatments in this country, but we don’t do a good job of covering everybody or making sure that people have access to basic health care. We’re spending a lot on our medical treatments, but many of those treatments just don’t have a lot of value.”

Vanness added that in order to improve a population’s health without spending too much, it’s important to be able to tell whether the prices drug and device manufacturers are charging are justified by what they deliver in health improvements.

The researchers found that in their simulation, for every $10 million increase in health care expenditures, 1860 people became uninsured. This led to five deaths, 81 quality-adjusted life-years lost due to death, and 15 quality-adjusted life-years lost due to illness. In health care economics, one quality-adjusted life-year (QALY) is equal to one year of perfect health.

Vanness said these results — recently published in the Annals of Internal Medicine — suggests a cost effectiveness threshold of $104,000 per QALY.

“If a treatment is beneficial but it costs more than about $100,000 to gain one quality-adjusted life-year using that treatment, then it may not be a good deal,” Vanness said. “Because our simulation was using data estimates, we wanted to come up with a range of plausible values. So anything over a range of $100,000 to $150,000 per QALY gained is likely to actually make our population’s health fall.”

To create the simulation, Vanness said he and the other researchers used a variety of data, starting with estimates about how likely people are to drop their insurance when their premiums go up.

“We also used evidence from the public health literature on what happens to people’s health and mortality when they gain or lose health insurance,” Vanness said.

The simulation then compiled that data and estimated how much the health of a population goes down when costs increase. According to Vanness, that relationship determines the cost-effectiveness threshold — how much a treatment can cost relative to the health benefits it gives before it causes more harm than good.

The researchers said the findings could be especially important to organizations like the Institute for Clinical and Economic Review, which provides analysis to several private and public insurers to help negotiate prices with manufacturers. These organizations could use the findings as empirical evidence for what makes a treatment a good value in the United States.

“Moving forward, I think some changes could be made to national policy to make cost effectiveness analysis more commonly used,” Vanness said. “Our goal is to get that information out there with the hope that somebody is going to use it to help guide coverage or maybe get manufacturers to reduce their prices on some of these drugs.”

James Lomas at the University of York, and Hannah Ahn, a Penn State graduate student, also participated in this work.

In collaboration with their partners, Juvenile Law Center, Community Legal Services, and Temple Legal Aid, Pennsylvania Partnerships for Children is proud to showcase concrete policy solutions to improve the rates of family preservation and kinship care as outlined in a recent blog post, Making Pennsylvania a National Leader in Family Preservation.

In addition, Generations United released its annual State of Grandfamilies in America Report, which focuses on the COVID-19 pandemic and the new challenges experienced by kin raising children, and provides some state and federal policy solutions to best support kin informally and formally caregiving.

As the country continues to face the opioid crisis, how can employers join the effort to address this issue? Researchers at the Center for the Promotion of Health in the New England Workplace suggest in a recent study that changes to the work environment can help reduce opioid use and opioid use disorder (OUD) among workers.

Published in the American Journal for Public Health, the study identified two broad pathways through which work can result in opioid use: 1) work-related pain and discomfort or 2) other work-related stressors. Work-related pain and discomfort can result from a work accident or long-term, repetitive movements. Other work-related stressors include anxiety and depression from unmanageable work demands or job insecurity.

The new report Exploring Hospital Investments in Community Development provides the first in-depth, national analysis of nonprofit hospitals’ reported spending on community building activities, examining how this spending varies by geography and hospital characteristics. The report also includes a qualitative review of related activities undertaken by hospitals in Third District states (Delaware, Pennsylvania, New Jersey), highlighting areas of potential alignment with the community development field.

Social determinants of health — such as economic security, housing conditions, and neighborhood context — are increasingly recognized as having an even greater impact on health and well-being than clinical care. Although many hospitals and health-care systems are exploring opportunities to address these nonmedical determinants, before now, little was known about how much hospitals typically invest in community development–related activities or what types of partnerships and initiatives they pursue.

Exploring Hospital Investments in Community Development sheds new light on this topic by examining nonprofit hospitals’ spending on efforts to address the social and economic needs of patients and communities. The report finds that, in aggregate, nonprofit hospitals reported spending an average of $474 million on community building each year during the study period. This funding was primarily allocated toward workforce development, community services, and community health improvement advocacy efforts. Additionally, a qualitative review of hospitals’ reported activities identifies examples of interventions related to housing, economic development, food access, and more.

Read the full report: Exploring Hospital Investments in Community Development.

See the Data Appendix for hospital spending breakouts for states, metropolitan areas, and nonmetropolitan portions of states.

Building on the foundational work of the Task Force, the White House released a rural prosperity resource guide for State, local, and Tribal leaders. The resource guide – Promoting Rural Prosperity in America – demonstrates the Administration’s historic investment in and support for rural America and outlines key programs across the Federal government to support rural prosperity and resiliency.

You can also find a helpful guide from the White House Office of Intergovernmental Affairs on disaster recovery and resilience here.