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: Providers and health plans aren’t the only industry groups affected by the shift to value-based care. It’s time for pharma to get in on the action.
While providers and health plans tend to be considered the groups that will be hit hardest by the transition to value-based care, the pharmaceutical industry will not escape unaffected.
During my Account Management Training Population Health presentation on April 19 at the AMCP Academy of Managed Care & Specialty Pharmacy Annual Meeting 2016, I discussed how the pharmaceutical industry will be impacted, and what it should be doing now to prepare.
For years, if not decades, pharmacy has been viewed as an entity separate from providers, viewed primarily as a vendor or supplier. But as providers take on more risk, pharmacy can no longer stand on the sidelines. Instead, it must be a collaborator in the overall provision of care.
In other words, pharmaceutical manufacturers must consider how their products help healthcare professionals provide high quality, cost-efficient, value-driven care to patients. They must also be willing to provide the data showing the benefit of their product in order to share in the risk or reward, depending on how their product performs.
One key area of focus as we transition toward value will be how pharmaceutical costs translate into patient outcomes. For example, does the medication lead to an avoided hospital admission or readmission? Does it lead to fewer ER visits or complications? Does it help patients meet a quality outcome goal?
To answer these questions, data regarding the cost of the drug, the episode of care, the physician, facility, imaging, and diagnostic services, and the outcome are critical.
While a more value-driven focus will be challenging for many pharmaceutical companies to adopt (after all, it represents a significant shift in how they have traditionally conducted business), it presents a great opportunity. Companies that are able to demonstrate a higher-value product, ones that can help providers to achieve value-driven care across the continuum of settings, will thrive.
Baseball legend Yogi Berra famously said, “When you come to a fork in the road, take it.” Currently, we are at the fork in the road of how we pay for care.
Soon, Medicare will release rules related to the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), which will create two new payment tracks for physicians. Payment adjustments based on cost and quality performance in these tracks will begin in 2019.
Essentially, MACRA will further propel providers and payers toward value-based care, and healthcare executives throughout the industry will need to consider how collaboration will help them succeed.
For pharmaceutical manufacturers, this presents an opportunity to discuss collaborative value-driven arrangements with plans, risk-bearing provider organizations, and provider-sponsored plans. Those that aren’t thinking about how to position their current products and pipeline products for population health and value are already behind the curve.
Joel V. Brill, MD, FACP, is chief medical officer, Predictive Health, LLC. A member of the Managed Healthcare Executive editorial advisory board, he is an executive clinician with over 30 years of experience providing strategic leadership and medical oversight to large data-driven health organizations. He is skilled in strategy, development and implementation of innovative health programs, products and payment systems, with extensive experience in clinical practice, research, coverage, reimbursement, quality improvement, bundled and episode payments and accountable care.