‘Value Creation’ And ‘Value Shifting’ In Health Care: Uwe Reinhardt

Summary: Princeton economist Uwe Reinhardt writes about value shifting in health care in the current issue of Health Affairs. The money quote, for me: “My gratuitous advice to the drug industry, and to the health care industry in general, is to be very mindful of the distinction between value creation and value shifting in their pricing policies, lest they eventually invoke the wrath of the losers in that game, with dire consequences. A healthy addition to corporate board meetings at these companies, for example, might be a presentation on the distribution of family income in the United States, whose median now is around $52,000 (meaning 50 percent of American families have a lower family income). Similarly, the boards should know more about the health insurance status of the American people, including the ever-increasing deductibles and coinsurance families are made to bear. These data might give boards some feel for how much money can reasonably and humanely be extracted from their fellow Americans, especially those in the bottom half of the income distribution, with whom the boards and business executives have lost touch.” Uwe Reinhardt, ‘Value Creation’ And ‘Value Shifting’ In Health Care, Health Affairs.