3 Ways Health Economics and Outcomes Research (HEOR) Benefits Healthcare

Blog Posts  |  10 October 2023

Written by: Joe Vasey, PhD and Cheryl Reifsnyder, PhD

The U.S. healthcare system has been under increasing pressure to deliver care that produces improved patient outcomes under increasingly strict budgetary constraints. At the same time, the decision-making process for selecting the “best” patient care has become increasingly complex. Decisions can be impacted by a wide range of variables, including treatment cost; benefits that are economic, clinical, or both; or benefits that only the patient may experience.

Health economics and outcomes research (HEOR) is an area of study that has evolved to help with this type of decision. It originated as a combination of two distinct fields of research:

  • Health economics: Research that focuses on measuring and determining the value of the outcomes resulting from medical interventions, as well as wider issues such as the overall healthcare market and the healthcare funding system
  • Outcomes: Research that focuses on the actual patient results of specific medical interventions

HEOR provides both economic and outcomes data for medical interventions, enabling providers to use this information to inform their care plan decisions.

HEOR data differ from the data generated in clinical trials. In contrast to clinical trials, which are tightly controlled, HEOR deals with the real-world health, clinical, and economic issues faced by patients and providers. Clinical trials typically produce measurable clinical data, whereas HEOR considers a broader range of information and may include data such as:

  • Clinical outcomes
  • Financial impact
  • Quality of life, as reported by patients
  • Overall satisfaction with treatment, as reported by patients

HEOR studies benefit patients by generating data that are more patient-centered than that produced by clinical trials. However, HEOR also benefits healthcare in numerous ways. Keep reading to learn 3 of the primary ways HEOR benefits healthcare and how they occur.

Benefit #1: Provides patient-focused treatment

One strength of HEOR is its ability to use real-world data (RWD) to evaluate patient-centered outcomes. Data collected in clinical trials are primarily focused on the trials’ clinical endpoints; HEOR also analyzes data from sources such as insurance databases, patient questionnaires, medical records, systemic literature reviews, cost-effectiveness studies, and more. By expanding its pool of data sources, HEOR aims to provide measurements beyond the limits of clinical trial data.

HEOR studies frequently incorporate information about patients’ lifestyles, preferences, and voices. By using RWD, HEOR attempts to answer patient-focused questions such as:

  • What are the short- and long-term improvements to the patient’s quality of life?
  • What is the treatment’s overall safety, efficacy, and benefit?
  • How does this treatment affect patients’ health outcomes?
  • What is the treatment’s cost burden to the patient?
  • How does this treatment compare with other options?

HEOR uses patient-centered outcomes research to obtain qualitative data about patients’ experiences. Variables such as the patient’s lifestyle, preference, and voice can often affect treatment compliance and, as a result, treatment outcomes. This means HEOR data can also help healthcare providers (HCPs) select optimal treatment options for patients by considering their individual situations and needs.

Benefit #2: Helps clinicians make the best treatment decisions

The complexity of healthcare decision-making is continuing to increase. Innovative treatments that can potentially deliver effective treatments based on personalized medicine have become a reality; however, the very complexity of these therapies makes it more difficult to determine their value to patients, payers, and society. This, in turn, complicates the budget planning process.

However, HEOR can help HCPs recognize diversity among different patient populations that might influence treatment outcomes. HEOR data can also be used to help identify gaps in the treatment choices that are available for diverse patient populations. This information can help HCPs to make treatments more accessible to patients of different socioeconomic backgrounds.

HEOR can provide a valuable resource to help clinicians make treatment choices that will ultimately benefit both patients and systems. Together, outcomes research and health economics research provide vital information and tools to healthcare decision-makers, helping them evaluate even complex healthcare questions. HEOR provides a framework that can be used to clearly define healthcare issues as well as collate the evidence needed to inform and guide healthcare-related decision-making in this changing space.

Benefit #3: Help support payment from stakeholders

As costs of care continue to rise, fee-for-service models of payment, based on the volume of medical services delivered, have become unsustainable. They are gradually being replaced by payment based on treatment outcomes (also known as “value-based care”), a paradigm that requires payers to identify a treatment’s value to patients and society. HEOR has emerged as a powerful tool for life science researchers for its ability to generate data supporting a product’s value.

Interest in HEOR has grown exponentially as payers around the world wrestle with how to provide the best possible health outcomes at affordable costs. Although clinical trials have become the gold standard for providing the initial evidence of a treatment’s safety and efficacy, until recently there has been an absence of RWD on how well these treatments fare in the real-world setting. HEOR has evolved to help fill this gap. It has become critical for helping healthcare payers determine whether treatments work with the population they serve and for helping them determine the amount of treatment cost that should be reimbursed by the healthcare system. HEOR can help payers to make rational comparisons between available treatment options so they can make the best choice.

A new drug’s successful launch requires companies to secure payment, and payment requires supporting evidence in the form of clinical, economic, and health outcomes data, including quality-of-life information. One of the primary goals of HEOR teams is to complement traditional clinical trial data with health economic and outcomes information to help decision-makers develop cost and access options for how patients will receive certain treatments. This helps determine whether new products will be used to treat patients’ conditions, how patients will afford the cost of treatment, and how the product’s safety and efficacy will impact the patient’s quality of life.

Extracting real-world data

Until recently, HEOR relied almost exclusively on data extracted from structured clinical and insurance records. Even now, most HEOR studies rely heavily on these quantitative data sources. Physician notes and unstructured data fields in electronic health records (EHRs) are a valuable asset that can provide additional, often qualitative, information not otherwise available in the electronic chart. That said, the unstructured nature of these notes make it difficult to access and analyze.

However, Veradigm is able to extract de-identified RWD from unstructured clinical notes and free-text fields in their EHRs using Natural Language Processing and Machine Learning. This type of RWD extraction makes it available to help with clinical research, for monitoring the quality of patient care, and, of course, for health economics outcomes research.

HEOR is a vital tool for healthcare decision makers, enabling even complex healthcare questions to be evaluated rationally. For more information regarding Veradigm EHR datasets, analytic capabilities, and data enrichment services, please contact us.

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