Posted by: Peggy Salvatore, www.healthsystemed.com
Question of the Day: Do You Really Need Fully Implemented and Integrated Electronic Patient Records?
Answer: Only If You Want To Get Paid.
As we continue to chew on the issue of what healthcare payers should pay for, the payees are starting to get a little nervous about survival under these rigorous conditions. Some have become creative in their approach to getting paid.
Personalized medicine: Instead of waiting for outcomes, providers using some biologics will know in advance if something works. Using genetic testing – at $200 to $5,000 a pop – providers will know if the drug under consideration will work in the patient in front of them. At the cost of genetic testing, the math only works if the drug in question costs at least 10 or 20 times as much as the test. But it is starting to be done, as labs are coming up with assays that can determine which genetic markers indicate susceptibility to a treatment. At this time, about 5% of employers are paying for this kind of advanced knowledge.*
Performance Rebates: Some drug companies give a money-back guarantee. In essence, they are saying, “Our drug works, we promise. Either the blood pressure numbers go down or you get money back.” This practice is not widespread, but one or two big players are trying it in some high-cost, high-utilization therapeutic areas to move product.
These are all steps along the road to paying for what works as the private sector tries to find gentler ways on this very rocky path. Because under health reform, payment is dependent on outcomes. Payers (ie, Medicare ACOs at first) will hold back a portion of provider payments in a “shared savings account” and will review measures with the “savings” to be “shared” as additional payments with the ACOs depending on their results.
How does this affect pharma, medical device companies, surgeons and anything or anyone else that gets measured in this process? Your product or service needs to have proven superior outcomes (trials and procedures that include lots of patients, lots of times) and have a value proposition that holds up under Comparative Effectiveness Research that tracks how well one drug, treatment, surgery fares against another in this cost/benefit scheme.
Not saying that this is necessarily a bad idea. In a perfect universe, it sounds like a reasonably fair way to apportion finite resources among the hundreds of millions of patients and their unlimited needs. But the 800 pound gorilla in the corner is collecting all this information in a uniform way that is usable, asking all the right questions in the right way and having a dispassionate third party crunching the numbers correctly. Then, depending on the results of the data analyses, buying the most cost-effective goods and services, and paying providers according to their patient outcomes.
If I’m selling drugs, I’ve got my fingers crossed that the data swings my way in those head-to-head comparisons. If I am a health network, I’m hoping I’ve had fewer readmissions than almost everyone else, so I’m on the better side of the bell curve when they distribute the “shared savings”.
To very roughly paraphrase one participant at that NYC confab on the future of pharmaceutical payments last week, he just wasn’t sure we had the ability to collect the information we need, or to know exactly what to collect, or how to collect it – yet.
When you get down to it, it’s all about the data. Only if you want to get paid.
*Pharmacy Benefit Management Institute, 2010-2011 Prescription Drug Benefit Cost and Plan Design Report.