The old rules don’t apply in the brave new world of value-based care
The shift towards value-based care, rather than pay-for-service, requires a new modus operandi across the sector. Pharmaceutical firms, healthcare providers, medical professionals, pharmacists and payers will need to realign to focus on improving patient outcomes at a reduced cost. This requires a range of approaches from enabling quicker recovery from short-term illnesses and injury, to managing chronic illness proactively to effectively deliver improved outcomes and better quality of life at a reduced total cost of care.
There is also hard evidence that pay-for-services is on the decline. It now accounts for just over a third (37.2 per cent) of reimbursement in the US and is projected to dip below 26 per cent by 2021, according to a study by analysts ORC International.
This shift is a worldwide phenomenon and is something the pharmaceutical industry has been discussing for some time. Leading firms are realising they need to rethink their business focus and business models to prepare for this new world where payers will expect evidence of value and outcomes to support continued re-imbursement.
Several factors are driving the shift to the value-based model. Firstly, the increase in the total cost of healthcare is placing an unsustainable burden on national economies. The US, for example, spent $3.5 trillion, or 17.2 percent of its GDP, on healthcare in 2017. In the same year, France and Germany had the highest levels of spending on healthcare within the EU; 11 per cent of GDP spend.
In recent years pharma pricing within EU countries has come under increased control at local, regional and international levels as attempts to control prices escalate. Value-based care models are increasingly adopted as a key part of the mix of ways used by payers to respond to this real need to drive down pharmaceutical costs, according to Deloitte.
Yet more work needs to be done to create healthcare systems which can directly respond to the needs of patients and keep citizens healthy, both now and in the future.
Access to previously hidden, useful, practical real-world data allows greater understanding of patients’ ongoing experience and journey with their treatment. This is invaluable for helping us to understand what works and what needs improvement, as well as identifying where more investment is needed.
The FutureProofing Healthcare Sustainability Index provides this crucial intelligence and insight. We can see how and where progress is being made within national health economies by aggregating current third-party data.
The insight the indices provide to help users understand how innovation is supported in different markets is vital. They help us to understand which markets are ready for the kinds of digital therapy management solutions we are developing with our pharma and medtech clients to help drive improved outcomes for patients.
FutureProofing Healthcare’s Sustainability Index also helps companies understand which markets they should concentrate their efforts on and where their products will fit best.
What is most import right now is that patients get the best possible treatment for their condition and we foster an environment that allows access to these treatments and other healthcare innovations.
S3 Connected Health works closely on both of these areas for our pharma and medtech clients in diverse markets across the globe. We intimately understand the new approach needed to navigate the change to value-based models in different markets.
Just like any other participant in the healthcare sector, pharma firms need to understand stakeholder readiness to adopt new models and new ways of working. They need to know if the new services they plan to provide can become an integrated part of the way care is delivered at scale.
We already know how important this kind of analysis is to the sector as it navigates the shift to value-based care. There is huge need for this kind of specialist intelligence. In fact, we have carried out our own analysis looking at the readiness of countries to tackle global health challenges to embrace new, technology-driven ways of delivering healthcare to patients.
Our research compared differing approaches by global healthcare systems towards implementing value-based healthcare and better population-based health outcomes. It asked key questions around patient access to healthcare in each market and whether services are seen as trustworthy and effective. It also examined whether the system in the given market produces outcomes at an optimum cost.
So, we see the new indices produced by FutureProofing Healthcare are a real game-changer for companies attempting to navigate the shifting landscape. They are very powerful both on a micro and macro level and will provide companies with the exact market insight they have been searching for.