De­ter­min­ing the ‘value’ in value-based pric­ing

Modern Healthcare - - COMMENT -

Re­gard­ing the re­cent on­line com­men­tary “Drop Med­i­caid ‘best price’ drug rules in fa­vor of value-based strate­gies” (Mod­ern­Health­, Nov. 18), “value-based pric­ing” sounds mel­low un­til one comes to the chal­lenge of putting a dol­lar value on, say, a qual­ity-ad­justed life year (QALY) for, say, a Med­i­caid pa­tient. Econ­o­mists usu­ally pull that num­ber out of a hat—a com­mon num­ber is $100,000 for a QALY who­ever may re­ceive it—but one won­ders whether that is the “value” cit­i­zens have in mind.

Uwe Rein­hardt James Madi­son pro­fes­sor of po­lit­i­cal econ­omy, Woodrow Wil­son School of Pub­lic and In­ter­na­tional Af­fairs Prince­ton Univer­sity

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