These models include a fixed all-inclusive price that covers all services associated with a particular procedure or episode of care, including medical and hospital expenses, as well as pre- and post-surgical care. Bundled pricing is an increasing part of the transition to value-based payments; In mid-2014, CMS announced the expansion of its Bundled Payments for Care Improvement initiative from approximately 2,400 to approximately 6,500 providers. Bundled pricing agreements are becoming increasingly popular with provider systems that are reluctant to take the risk of use, but are convinced that they can create value through better managed episodes of care. They are often included alongside other initiatives on public health risks. Bundled pricing contracts are more effective than primary health care initiatives to coordinate with process specialists. There is also a growing interest in value-based contracts to improve population health management, where health systems and responsible care organizations (COAs) take responsibility for patient populations – not just individual patients – and aim to add value to the broader continuum of care in inpatient and ambulatory settings. The goal here is to go beyond the acute episode of care, including well-being, prevention, early intervention and chronic disease, in order to reduce overall costs and improve health. Regulatory Environment and Industry Compliance: The regulatory environment is ripe for change. Value-based contracts require hospitals to think differently about contracts with their suppliers, including medical device companies. However, existing laws and regulations limit the faster growth of manufacturers` role as risk partners.
In addition, the environment makes investing in capabilities and solutions that improve operational efficiency and patient outcomes more difficult than it could be. Providers and vendors can work together to advance legislation and regulatory modernization that expand the ability of providers and providers to make effective investments to reduce healthcare costs and improve quality of care, clinical outcomes and patient satisfaction. Significant capital is needed to launch any value-based contractual initiative, especially one that involves risks at the population level. Based on the results of the above survey, the three-year cost of building and maintaining the care management and clinical analysis infrastructure required to support value-based contracts can range from $2.5 million to $15 million. Instead of forcing a particular pathway, it is possible to replace financial incentives for clinicians to achieve better outcomes and efficiency based on their expertise and specific clinical information. Such a mechanism would take into account the fact that not all systems have the same resources and capabilities. While systems may achieve the same result on a different supply path, the key is to determine how justified the variation is and how unjustified it is and can be eliminated. With appropriate patient-centred incentives, better clinical coordination, access to meaningful information on clinical quality and accurate cost analysis, it should be possible to determine which services are provided that bring little or no benefit to the patient`s outcome and eliminate them.
Where appropriate, services that have a greater impact on patient outcomes and goals of care can be replaced.12 Value-based contracts can help provide patients and consumers with faster access to biopharmaceuticals, especially for treatments that serve small groups of patients and have limited clinical data. Joseph Gifford, MD, former CEO of the Seattle-based Providence-Swedish Health Alliance, points to the need to be realistic about the impact of shared savings and value-based contracts.c « You have to deal with the fact that value-based deals are essentially about reducing someone`s income, » gifford says. « That`s part of the rules of the game if you want to play in the value-based market. You have to talk to yourself and say, « This is the future. » Value-based contracting is an important aspect of promoting value-based care. Value-based contracting, also known as results-based contracting, is a type of payment model that links the price of a drug to its performance. This is in stark contrast to other healthcare payment models, where drug prices are determined by data collected in clinical trials, a controlled environment that does not always match performance under real-world conditions. How do value-based contracting models work? It`s simple. When a drug delivers the desired result, payers (insurers, supplier networks) pay the full price. If this is not the case, the payer may receive refunds or discounts from the manufacturer.
Cultural change: Value-based contracts represent a significant shift in the business model from traditional fee-for-service to performance-based risk management agreements. While these benefits can in principle be generated for all stakeholders – patients, health systems, healthcare providers, public and private payers, employers and the community – some stakeholders may be concerned about the risks associated with these agreements, as there is a limited tradition of multi-stakeholder collaboration. Reduced drug costs – Under value-based contracts, manufacturers can pay higher discounts for patients who do not meet agreed outcome targets, which can reduce drug costs. Changes that emphasize the provision of high-quality health goods and services are expected to contribute significantly to the change in the U.S. health care system. An example of such a change is the VBC. Critical Success Factors for Value-Based ContractsThere are several key critical success factors for value-based contracts: Extending the aforementioned definition, a VBC can be any payment agreement between buyers and sellers of healthcare services that has the following characteristics: The ability to measure value: If you want to implement performance- or risk-based contracts, there must be a baseline that measures current performance. to track and report. on key indicators. This is a fundamental requirement for the adoption of value-based contracts, as information and data are needed to accurately define and isolate outcomes related to specific products or capabilities.
It`s also worth thinking about the other value challenges associated with implementation. Not only is it difficult in itself to find agreed outcomes that are measurable within a practical timeframe, but in many cases the infrastructure needed to monitor results-based contracts simply does not exist. As you can see, while value-based contractual models can benefit patients and payers, there are still many hurdles that need to be overcome. Safeguards and benchmarks can be approached in different ways, with the specific circumstances of an organization determining which approach works best. Typically, a combination of approaches is negotiated in contracts, with a focus on fairness to payers and providers and aligning all parties to improve patient care. However, adoption between medical device companies and healthcare systems has been slow due to a lack of norms and standards for shared performance, a lack of stakeholder alignment, the changing regulatory environment, and industry difficulties in measuring and tracking performance. A strategic partnership between health systems and providers based on innovative approaches can pave the way for a new model of value-based procurement. Finally, when the government tackles the « best price » and anti-bribery law barriers – and with increasing price pressures, it`s hard to believe that this will never be the case – the depth of discounts based on value and pace of execution will increase. While companies are likely to continue to focus on real-world « guarantees » of effectiveness in labeled indications, manufacturers who can paint more complete and compelling images of real-world efficacy will gain the edge in formula contests. To be able to offer such data on the study`s endpoints and a real-world evidence strategy that is tested in the studies and maintained in post-market use, foresight and planning are needed to determine the development strategy. With such long lead times, manufacturers can`t afford to wait for brand-to-brand VBC opportunities.
Instead, they should start a concerted, cross-functional, cross-brand effort for: Now that you know a little more about value-based contract models, let`s take a closer look at the benefits of this payment model. First, it is important to note that value-based contracts limit the payer`s financial risk by providing for price reductions or refunds for inefficient processing. In addition, there are a number of other important benefits associated with value-based contracting: it is a new frontier at which health systems and suppliers commit to jointly create the conditions for a successful value-based contract. Broader stakeholder engagement and alignment will also ensure that value-based contracts are linked to broader interests within the hospital ecosystem. Many of the health care goods and services that are subject to a VBC are subject to an evidence-based treatment protocol that documents a link between the impact on patient outcomes and certain patient characteristics. Where protocols are in place, payers, as purchasers of the specified goods and services, encourage patients and their physicians to undergo treatment in accordance with the protocol.11 As the market evolves rapidly, healthcare systems should consider the following important considerations when adopting value-based contracts. Most VBCs are based on the following three premises:2 The concept of risk-based or value-based contracting is widely accepted, and health systems in general are showing interest in promoting value-based procurement as a tool to improve their performance. .
