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Value-based care in life sciences: what’s IT worth to you?

February 29, 2020 - 431 views

Value-based care in life sciences: what’s IT worth to you?

The shift to value-based care is happening now. Here's what it will take for life sciences organizations to prepare for the changes ahead.

Just one of the many changes rippling through the life sciences industry is the gradual but inexorable shift of value-based care (VBC) becoming a leading means of healthcare insurance reimbursement. According to our recently sponsored research, as many as 150 biopharmaceutical drugs  are covered by value-based contracts, with a projected growth rate of 15% to 20% from 2019 to 2021. The research further indicates that by 2025, about 60% to 70% of patented drugs in the U.S. and Europe are expected to be covered by VBC contracts. While medical device companies have arguably moved further in adopting outcome- and value-based models, our primary focus in this post will be on biopharmaceuticals.

All value-based care approaches tie payments to real-world outcomes, which can be both clinical (e.g., cancer is in remission) and corollary (e.g., elevated blood pressure has been alleviated) in nature. However, these methods can be structured in a variety of ways for risk-sharing and result-tracking purposes. In all cases, the VBC shift requires life sciences organizations to make a series of changes, including:

  • Rethinking their operating approaches, such as how therapies are marketed.
  • Adopting new partnership models, such as with retail clinics.
  • Implementing more effective technology tools/platforms that facilitate data access and document the achievement of health outcomes, such as using blockchain’s secure distributed ledgers. (Note that blockchain, despite all the hoopla, is still in trial stages in the LS industry.)

Even as newer value-based care contracts are inked, historical precedents are well-known, such as Amgen and Harvard Pilgrim’s agreement on cholesterol injections; Gilead and Harvard Pilgrim’s deal for a hepatitis C drug; and Novartis, Aetna and Cigna’s payment arrangements for a heart failure medication. In another example, AstraZeneca agreed to reimburse ExpressScript clients for the cost of a cancer drug if it proved ineffective.

In addition to outcomes-based contracts, some agreements feature indication-specific pricing (different payouts for the same drug when treating different conditions). We’re seeing vibrant innovation in contracting, which is previously unheard of in life sciences.

Consistent with modern, technologically-driven business change, it’s essential to evaluate technology tools, platforms and frameworks to assess their ability to support the new operating and governance models that align with value-based care. These models require heightened transparency, data-sharing and real-time reporting – not to mention greater negotiating savvy.    

A digital infusion to drive deeper collaboration

VBC entails changes across the enterprise, including in sales, contracting and distribution; consumer support (such as adherence reminders/alerts); bundling of products and digital services; and partnerships with retailers or home-based services, such as Trapollo or Critical Signals Technologies. Such partnerships may be needed to support compliance, adherence or early intervention. In most cases, particularly with chronic conditions, multiple parties are responsible for discrete elements of care delivery. VBC requires partners to collaborate in new ways to achieve clinical and health outcomes, even those that may have historically had antagonistic relationships (i.e., biopharma’s historically fraught dealings with payers and providers).

Organizations will also need to make a significant investment in change management from a data, culture and sales standpoint as employees and vendors will need to operate in a new, far more collaborative way. (Air travel is another industry where a changed regulatory environment, empowered consumers and digital platforms required a change in operating dynamics. The Delta app is an example of how the customer experience and contractual efficiency can improve.)  

Technology plans and business objectives must mesh seamlessly, as a poorly defined plan can inhibit success. Digital interfaces and business processes designed to be digitally native can enhance the customer experience when “customers” may include clinicians, care assistants, family members, patients, pharmacists and others. 

Impending change across the four P’s

In our experience, organizations that are successfully making the shift to value-based care are taking the following actions:

  • Implementing a platform like Patient Prime, which enhances the patient experience across the life sciences/healthcare “Four P’s” ecosystem: patients, providers, payers and pharma.
  • Facilitating retail/travel partnering in a collaborative ecosystem.
  • Establishing a joint innovation center with a partner in which digital business process change can be explored.
  • Analyzing new provider business models, a complementary activity to VBC.

Just as functional silos must be bridged to enable VBC coordination, data silos also need to be integrated – while maintaining security and compliance, of course. But even effective “interoperability” of siloed data is insufficient for a fully functioning value-added ecosystem, which demands a universal data platform infused with intelligence. Again, blockchain can potentially serve as such a universal platform; Walmart has been using the technology to help track its life sciences’ vendors and products. We see the widespread adoption of electronic health records as a baseline technology for VBC with FHIR and the ONC’s interoperability guidelines enabling the systems necessary for VBC to succeed.   

While the operating and governance model shifts are necessary for VBC to succeed, an integrated technology framework is an absolute must. Such a framework should incorporate data analytics, security and compliance safeguards, and transparent communication among participants in the care ecosystem, which includes patients, payers, providers, life sciences companies, government and other parties. Such a robust health data gathering/sharing platform will enable all stakeholders to realize the clinical and financial objectives that VBC aspires to achieve.

In our other related blog posts, we provide guidance on how life sciences and healthcare organizations should prepare for the changes unfolding throughout the ecosystem, as well as the disaggregation of healthcare. Stay tuned for our take on the use of AI in life sciences.

Digital Business & Technology life sciences , value-based care , biopharmaceuticals , value-based contracts

Brian Williams

Brian is Cognizant’s Chief Digital Officer for Life Sciences and is responsible for designing digitally enabled solutions to...

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