In 2018, the U.S. spent approximately $3.6 trillion on healthcare, which averaged to about $11,000 per person. Over the past few decades, healthcare costs have been increasing, making it difficult for the average citizen to access medical care. This trend has led policymakers and practitioners to increasingly focus on value, where the best possible health outcomes are delivered at the lowest possible cost. The new paradigm will help drive medication adherence and ensure patients receive the best treatment, especially for chronic conditions like diabetes. But what do value-based care and digital health mean for pharma companies?
Here is what to know.
The Benefits of Value-based Care
Value-based care is simply a healthcare delivery model in which providers are paid and rewarded with incentives based on the quality of care they deliver to patients. This approach means that purchasers of healthcare, such as the government, employers, and consumers, as well as payers, will hold the healthcare delivery system responsible for the quality and cost of care. Reimbursements will be based on factors like the quality of the outcome of a procedure, episode of care, use of a device, or therapy. As such, life sciences companies will be rewarded for improving health outcomes while reducing costs and be paid less when their therapies are procedures are less effective.
In essence, digital transformation in the healthcare industry has contributed to the rise of value-based care. Below are some of the benefits of this healthcare reimbursement model.
- Reduced costs: Because value is at the heart of this system, care providers focus on preventative care and treatment options that help patients recover efficiently, leading to fewer doctor visits and reduced drug spending.
- Reduced medical errors: In a value-based healthcare system, health care providers coordinate care, provide preventative care, and make treatment more efficient. These go a long way in helping to increase efficiency and reduce medical errors.
- Better information to consumers: Patients will be attracted to care provider organizations that deliver improved treatment outcomes. Through value-based care, patients can access the information they need to choose the right provider.
- Increased patient satisfaction: Healthcare with a patient-centric focus ensures less time spent on chronic disease management and better outcomes, factors that increase patient satisfaction. The model also contributes to a healthier society by promoting healthy habits, especially for people with chronic diseases.
The Role of Digital Health in Value-based Care
Digital health involves using technology to help improve consumers' health and wellness and ensure efficient healthcare delivery. The growing acceptance and adoption of digital health solutions is likely to promote value-based care and improve patient outcomes.
Here is why digital health is important:
Improved Access to Healthcare
The use of technology in delivering healthcare services helps to expand the reach of healthcare professionals. This initiative not only allows patients in hard-to-reach areas access to healthcare but also increases actual patient-contact and monitoring. Patients can connect to a professional through the internet and have their concerns resolved at any time.
Ability to Track Patient Outcomes
As focus shifts to value-based care models, healthcare providers can rely on digital therapeutics to engage patients during recovery. Remote patient monitoring through tools that track patient outcomes, makes it easier to implement value-based arrangements, empower patients, and promote treatment adherence. Patients can also ask questions and raise concerns between visits, and providers can detect changes in disease progression.
Collection of Real-time Data
Technology enables healthcare providers to collect meaningful data that they can use to make informed decisions. Digital health solutions also analyze patient generated data, facilitating speedy diagnosis, and providing better treatment options. This goes a long way in ensuring proper management of chronic diseases.
Person-centric Care Approach for Sustainable Behavior Change
Empowering people to self-manage their behavioral health is one of the ways of addressing chronic conditions. New approaches, such as passive connected devices, can encourage sustainable behavior change and improve patients' physical outcomes.
To navigate these shifts in the healthcare industry and ensure a holistic approach to value-based care, life sciences companies have to adopt a range of digital technologies. Using powerful and intelligent systems to gather data and analyze it will allow companies to collaborate effectively, anticipate clinical trials' outcomes, and create better experiences for patients.
What Value-based Healthcare Means for Pharma
The benefits of value-based healthcare and digital health cannot be denied. These two developments will also have a significant impact on the pharmaceutical industry. Considering that value-based care has already arrived, it is important to understand why the shift is both a threat and an opportunity.
A patient-centric approach can be a potential threat to pharmaceutical companies in several ways. The adoption of value-based care means that providers will be reimbursed based on outcomes. Because pharma product-development costs are rising, this is likely to result in pressures on pricing and present a major challenge to the pharmaceutical sector. Secondly, the criteria for determining the success of a new drug will cover the post-registration performance of the drug. This aspect will influence regulatory approval and lead to lower reimbursement when a drug does not meet the set criteria.
A value-based approach to healthcare can also be an opportunity for pharma companies. Pharmaceutical companies can rely on digital health technologies and big data to develop personalized and improved products that will promote better patient outcomes. This may involve introducing drugs and service offerings that are better than the current standard of care. The companies can also take this opportunity to redefine their strategy and realign their operating model in preparation for a value-based world. Digital health solutions can help pharma companies differentiate specific products and drive market share, particularly for newly launched products, late-stage products, and products in crowded categories.
At the end of the day, value is more critical to aspects of healthcare disbursement than ever before. Considering the important role that pharma companies play in the healthcare industry, companies should act quickly to utilize digital health to improve patient outcomes. This way, the companies will turn value-based healthcare into an opportunity.