Since the 1980s, the costs of health care in the Unites States has risen from nine percent of the nation’s Gross Domestic Product to now nearly twice that amount. With a population that is steadily increasing and aging, it appears that trend is not likely to slow anytime soon. The challenge is a tricky balancing act: providing the best possible care while controlling costs within an extraordinarily complex system of insurance networks, pharmaceutical companies, care providers, and so much more.
Fifty years ago, Leonard and Sophie Davis saw the divide between health care providers and economists, epidemiologists, and data analysts on the other side, assessing the costs of care and their impact on the system and our economy. With upon their gift to the University of Pennsylvania to establish the Leonard Davis Institute of Health Economics (LDI), the built a bridge between those two groups, creating a research enterprise charged with streamlining health care delivery and shaping policy.
The history and many of the accomplishments and influential studies produced by LDI senior fellows past and present are detailed in the new issue of Penn Medicine magazine, and earlier this month, more than 450 academics and health care industry executives from across the country gathered together for a two-day symposium and celebration of LDI’s 50th anniversary. The event offered attendees a chance to recognize the achievements and expertise of LDI alumni, and gather with fellow health policy junkies to share insights, predictions, and thoughts on the latest trends impacting health care in the United States today.
In the years since its establishment, LDI’s senior fellows – an interdisciplinary group which now tops 200 experts across disparate disciplines including health care, business, communications, law, social policy & practice, and education – have worked together to produce studies examining the medical, economic, and social issues that influence how health care is organized, financed, managed, and delivered.
Dating back to the early days of LDI, just as national health insurance was rising to the top of the nation’s agenda, founding director Robert D. Eilers, PhD, authored an influential two-part article published in the New England Journal of Medicine arguing that “although most proposals for national health insurance meet the criteria of financial accessibility and consumer participation in cost, few measure up to the criteria for delivery acceptability, cost efficiency and minimization of governmental regulation.” Eilers was a leading architect of health maintenance organizations and even worked with the White House and President Nixon’s administration to help draft the HMO bill that passed in 1973.
Since then, the LDI’s interdisciplinary groups have all worked to address the issues Eilers outlined – many of which pose challenges still today. Seminal studies by LDI and LDI-affiliated fellows have focused on how all parties – from patients to physicians, and insurance providers to drug manufacturers – can play bigger part in reducing costs and improving access to care.
On the patient side of things, despite widespread skepticism over whether paying people to adopt healthy behaviors would produce results, research has shown leveraging insights from behavioral economics – such as offering financial incentives – can improve rates of smoking cessation and increase exercise, potentially resulting in improved long-term health and reduced health care-associated costs. The insights provided in these early works have led to the development of carefully designed employee wellness programs that today are used by over 80 percent of corporations. Today, LDI senior fellows and faculty in the Penn Center for Health Incentives and Behavioral Economics are continuing to build on those foundations by more closely examining how we make choices and how those choices affect health care costs.
Where providers and payers are concerned, studies from LDI faculty have shown vast disparities in how much the U.S. spends on prescription drugs and keeping terminally ill patients hospitalized compared to other nations. The system risks collapse under its own weight. Areas for savings that LDI researchers have worked on include changing default prescribing options in electronic health records to increase prescribing rates for generic drugs, bundling payments to reduce hospital costs and Medicare payments, and finding new ways to reduce readmissions.
Recognizing the Pioneers
In addition to seminars and panels led by LDI and affiliated faculty who have helped shape the fields of health economics, the event also honored the legacy of LDI mentors past and present.
During a luncheon presentation with opening remarks from J. Larry Jameson, MD, PhD, dean of the Perelman School of Medicine and executive vice president of the University of Pennsylvania for the Health System, LDI Executive Director Daniel Polsky, PhD, and Sandy Schwartz, MD, a professor of Medicine and Economics and former LDI executive director, LDI presented the John M. Eisenberg Pioneer Award to Katrina Armstrong, MD, MSCE, and Patrick Conway, MD, MSc.
Eisenberg, who lost a battle with brain cancer in 2002, had served as the director of the Agency for Healthcare Research and Quality (AHRQ) for five years prior to succumbing to the disease, but before that, he spent nearly 20 years contributing to LDI, both as a student at Penn and later during his medical career.
"We are proud to celebrate John Eisenberg by honoring his legacy, reflected in the careers of two of our notable alumni,” Polsky said. “Katrina and Patrick have followed in John’s footsteps, both literally and figuratively, and are pioneers in their own right.”
In 2013, Armstrong became Massachusetts General Hospital's first female Physician-in-Chief (and the first non-Harvard graduate to hold the position) following a celebrated tenure at Penn Medicine, during which her research provided new insights on how to use genomic advances to improve cancer prevention and control as well as improving women’s decisions through personalized breast cancer screening and communication. That same year, Conway was named the Director of the Center for Medicare and Medicaid Innovation (CMMI). In accepting the award, Armstrong paid tribute to those who came before her and the importance of mentorship in shaping future thought leaders, including a few who were in attendance.
During her tenure at Penn, Armstrong served as chief of the division of General Internal Medicine, an associate director of the Abramson Cancer Center, and co-director of the Robert Wood Johnson Foundation Clinical Scholars program at Penn.
Further addressing the vital need to bring together qualitative and quantitative methods to affect change in health care, Armstrong said policy is made not just by looking at data, but by telling patient stories.
“One of the things that’s frustrating to people who come from a quantitative background is this recognition that a lot of the decisions we make are really driven by stories, by individuals, by those connections, and really the impact that what these policy decisions will make on individuals,” she said, adding that it is because of her relationship with Eisenberg that she now makes a regular habit of talking to people about their stories. “John taught me to talk to cab drivers,” she said. “The first thing I ask every single person I meet is where they grew up. If you ask someone where they grew up, you will find out more about that person – their background, their worries, their hopes – you should always start by asking someone where they grew up.”
In order to make progress in health care, Armstrong said it is critical that policy makers recognize the strength of the truths contained in both the data as well as the stories.
“LDI is essential for the potential to save and extend human life through affordable care, and represents the best hope for addressing U.S. health care costs,” University of Pennsylvania President Amy Gutmann said during the symposium’s closing remarks.
Gutmann and Armstrong’s sentiments speak directly to the fundamental missions of the Leonard Davis Institute, which for 50 years has provided a model that encourages interdisciplinary experts to come out of their silos and work together to solve the health care issues facing the nation today.