Alumna interview: Meng Li

Meng Li is a recent graduate of The CHOICE Institute who defended her dissertation, “The Real Option Value of Life and Innovation,” on May 8, 2018. In addition to her dissertation research, she has published on a wide range of topics including the cost-effectiveness of liver transplantation in organic acidemias, risk-sharing agreements involving indication-specific pricing, and the acceptability of cervical cancer screening in rural Uganda. Her website is

What was your dissertation about?Genentech-636

My dissertation was about the real option value of medical technologies. The real option value of a technology refers to the value of enabling patients to live longer to be able to take advantage of future breakthroughs.  In my dissertation, I answered two closely related questions: (1) do patients consider real option value when they make their treatment decisions; and (2) how should real option value from technology advancement be incorporated in economic evaluations of medical technologies and what is the potential impact? To answer the first question, I studied metastatic melanoma patients from 2008 to 2011 and examined if they changed their treatment decisions after the announcements of the results of the breakthrough drug ipilimumab’s phase II and phase III clinical testing. The idea behind this was that, if patients considered real option value – the value of taking advantage of future innovations – they might be more likely to undergo treatments that can extend their lives. In my analysis, I found that in anticipation of ipilimumab’s arrival, metastatic melanoma patients were more likely to undergo surgical resection of metastasis, which was consistent with my hypothesis. To answer the second question, I developed methods to project likely future approvals in metastatic melanoma and potential future improvement in mortality in this patient population and incorporated them into a cost-effectiveness analysis. In my analysis, I found that the incremental QALYs increased by about 5-7% after accounting for future innovations, and the ICERs decreased by about 0-2%.

How did you arrive at that topic? When did you know that this is what you wanted to study?

I have long been interested in pricing and value assessment of medical technologies. In the short proposal phase, I brainstormed with Lou Garrison (my dissertation committee chair) and explored several topics in that area. Around that time, ISPOR also started to form a special task force to study US value assessment frameworks and Lou was the chair of the task force. As a result, a lot of our discussions back then were around the economic foundations of cost-effectiveness analysis, and benefits of a technology that are usually not accounted for in a conventional cost-effectiveness model. Real option value is one of those benefits, and it is intuitive conceptually, and relatively easy to operationalize.

What was your daily schedule like when you were working on your dissertation?

I did not have a fixed schedule when I was working on my dissertation. I usually had several research projects going on at the same time, and I tried to balance doing side projects with working on my dissertation. However, instead of spending a couple hours a day, I liked to have a few uninterrupted days when I can immerse myself in my dissertation research.

In what quarter did you submit your final short proposal and in what quarter did you graduate/defend? What were some factors that determined your dissertation timeline?

I started brainstorming ideas for dissertation in the summer of 2015, after my second year, and submitted my short proposal in March 2016, defended my dissertation proposal in February 2017, and defended my dissertation in May 2018. I would say my dissertation had a relatively slow start, as there was little existing research on the particular topic that I was studying. A lot of time was spent on thinking through the theory and developing the research plan. I probably could have finished sooner, but I decided to follow the school cycle and graduate in the Spring. I also wanted to be well prepared for my general and final exams and submit my dissertation papers to journals before I graduate.

How did you fund your dissertation?

My dissertation was not funded by any particular grant. However, I was one of the TAs for the Certificate Program in Health Economics & Outcomes Research in the Department of Pharmacy, which supported me financially during my last year in graduate school. Before that, I was the research assistant on various research projects, which provided me with financial support in the first four years of my graduate school.

What will come next for you (or has come next for you)? What have you learned about finding work after school?

I will be joining the Schaeffer Center for Health Economics & Policy at the University of Southern California as a postdoctoral scholar. My search for jobs in the past few months was mostly focused on postdoc positions. I searched job boards (Indeed and LinkedIn), career pages of professional societies (ISPOR and AcademyHealth), and websites of the groups that I am interested in working with. My advisors and colleagues also connected me with groups where there might potentially be opportunities.

Value in Health Care in 2018: A Broader Approach with New Research Needs


uw by drone
Photo of the University of Washington campus by Ben Babusis

Meng Li


In 1950, national health expenditure as a share of gross domestic product in the United States was 5%. The share rose to 18% in 2016. Such rapid growth of healthcare expenditure has spurred widespread interest in value assessments of medical technologies, in general, and of new medicines, in particular. The American College of Cardiology-American Heart Association (ACC-AHA), American Society of Clinical Oncology (ASCO), Institute for Clinical and Economic Review (ICER), Memorial Sloan Kettering Cancer Center, and National Comprehensive Cancer Network (NCCN) are among the organizations that have proposed and implemented new value assessment frameworks. Given their different perspectives and decision-making needs, these organizations have identified a wide range of different factors underlying value, to name a few:  clinical benefit vs. risks, magnitude of net benefit, precision of estimate, cost-effectiveness, budget impact, affordability, novelty, research and development cost, rarity, and population health burden. Most of these existing frameworks, however, lack a consistent theoretical foundation in health economics, which has led to omission of important components of benefits or costs given their perspectives.

To inform the shift towards a more value-based healthcare system in the US, the International Society for Pharmacoeconomics and Outcomes Research (ISPOR, started the Initiative on US Value Assessment Frameworks in 2016. The objectives of the Initiative are to describe the conceptual basis for value, examine existing value frameworks, identify novel elements of value, and recommend good practice in value assessment. In contrast with many existing frameworks, the approach to value taken by the Initiative is grounded in health economics, yet recognizes special circumstances when a microeconomic approach cannot easily accommodate all relevant elements of value.

In the final report by the Initiative, to be published in February, many novel elements of value are identified and defined: productivity, adherence-improving factors, reduction in uncertainty, fear of contagion, insurance value, severity of disease, value of hope, real option value, equity, and scientific spillovers, along with the conventional quality-adjusted life-years (QALY) gained and net costs. Among these conventional and novel elements, QALY gains, net costs, and adherence-improving factors are value concepts from the health system perspective, while the rest are from the broader societal perspective. The Initiative also identified a number of additional value elements that are currently impractical to estimate due to lack of data or appropriate methodologies, such as fit with existing programs or infrastructure, end-of-life alternatives, ethical considerations related to manipulation of genetic materials, fears associated with specific types of therapies, etc.

Following the Second Panel on Cost-Effectiveness in Health and Medicine, whose report was published in the Fall of 2016, the Initiative recommended using cost-per-QALY-gained as the starting point for decision-making for healthcare resource allocation, and that other novel elements of value should be considered when relevant and if practical. The Initiative proposed the concept of “augmented cost-effectiveness analysis (CEA)”, where more measures of value besides health gains, societal costs, and financial risk protection are considered in a value assessment. Their report outlines several potential approaches to incorporating these novel elements into value assessments. One is to incorporate them either in the cost or in the QALY in the cost-per-QALY-gained ratio. Another approach is to monetize all health and related benefits, therefore converting the CEA into a cost-benefit analysis. A third approach is to compare element-by-element, which is in line with the “Impact Inventory,” a framework for considering consequences of an intervention as they impact different sectors put forth by the Second Panel. Finally, a fourth approach is to use multi-criteria decision analysis. Each of these approaches has its own advantages and methodological challenges, and more research and experience are needed in the application of augmented CEA.

Authors of the Initiative report also address issues around budgets and thresholds. The general recommendation is to base reimbursement policies on what is good value for money given a health plan’s budget. Good value for money can be achieved by using an explicit cost-per-QALY-gained threshold along with modifiers to that threshold. Both thresholds and modifiers for public and private health plans should reflect plan members’ or taxpayers’ preferences. The novel elements of value mentioned above are candidates for modifiers to the thresholds.

In contrast to other highly industrialized nations, stakeholders in the US have not fully embraced using cost-effectiveness to inform resource allocation decisions in healthcare. The US has the highest per capita spending on healthcare in the world, while life expectancy of Americans is lagging behind 30 or so countries and has even declined for the past two years. Many now believe that this is partly due to a misalignment between value and payment, and realigning the two is critical to bending the healthcare cost curve. It is encouraging to see new value assessment frameworks for medical technologies gaining visibility and some traction in the US. In order for them to have a greater impact on reimbursement decisions, the research community needs to make sure these frameworks are conceptually and methodologically sound and the assessment processes are transparent. The ISPOR Initiative has broadened our view of what constitutes value in health care; more research is needed to understand and estimate novel elements of value in different healthcare decision contexts and their implications.