Value-Based Agreements Present Significant Challenges to Specialty Stakeholders
Strategic, operational, and legal hurdles must be conquered before implementing this contract.
Traditionally, health care stakeholders have been reimbursed for the number of services they provide for patients, regardless of the efficacy or value derived from these services. For several reasons, the health care world is largely shifting towards value and away from volume.
In a session titled The Role of Value-Based Agreements in Transforming the Pricing and Reimbursement Landscape at the Asembia Specialty Pharmacy Summit 2017, the speakers discussed the factors driving value-based contracts, what capabilities are needed to implement such agreements, and future trends in this space. This shift is primarily driven by factors such as consolidation of buyers, manufacturer competition, and the revised regulations of federal programs.
Additionally, patients are taking on a large financial burden through the structure of their health plans. Technology allows these patients to search for information that helps them determine the best value for their money, which provides an increased awareness of health care costs.
This has forced stakeholders to develop new approaches that demonstrate how they add value to the health care system, according to the panelists. Although there is significant interest in value-based agreements, uptake in the United States has been slow compared with other countries. However, over the last year, there have been multiple publicly-communicated deals that dramatically increased the number of value-based agreements, according to the session.
There are still a substantial number of hurdles, including strategic and operational challenges, which must be overcome before widespread implementation of these contracts can become reality, the panelists noted. These obstacles include defining a desired patient population and identifying the metrics needed to measure outcomes, according to the session. Additional challenges include properly aggregating, storing, and protecting data, which needs to be accomplished both transparently and with protection of patient information.
For a value-based agreement to be successful, it must incorporate a valuable product, meaningful measurement of metrics, and a properly structured contract, according to the session. The contract must present benefits for all stakeholders, not just the patient or manufacturer. Stakeholders are also concerned with how federal regulations may affect value-based agreements. For example, many stakeholders fear that the government may view the agreements as a violation of the Anti-Kickback Statute.
“A reason we can’t get off the ground has to do with our legal climate and a lack of clarity of regulatory status with best price with these contracts,” said speaker Terri Bernacchi, PharmD, MBA, managing general partner, SME Health Systems.
The speakers pointed to multiple reasons that value-based contracts have yet to be widely implemented. The fragmentation of the health care system—with many providers sharing equal risk—may raise skepticism about signing these contracts, as these providers may not be fully responsible for a patient’s outcome, according to the session.
There must also be an understanding of which players are involved with the contract and how they are affected. If a provider is compensated poorly or there are extra hurdles associated with a certain medication, they may be unlikely to prescribe that drug, despite a value-based agreement between a manufacturer and a health plan. This would be an ineffective contract, according to the panel.
The speakers all agreed that there will be an increase in value-based contracting among payers over the next 5 years. They expect a boom in contracts because they may be easier to develop, such as for conditions with single indications, according to the session. Panelists also expect an increase in value-based contracts within the oncology space. While the prevalence of these contracts will likely grow, there are still significant barriers that stakeholders must address.
“Without a comprehensive business strategy and necessary operational infrastructure, successfully executing these deals will continue to be a challenge,” said speaker Joseph Coppola, managing director, Deloitte Consulting LLP.