Value-based healthcare

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In recent years the healthcare sector has been faced with several challenges that impact the overall system and quality of care and life of patients.

First of all, demographic factors such as a growing and aging populations imply that medical care demand increases, gets more complex and puts pressure via direct costs on the health care system. These produce high and long-term costs on the one hand and require high-quality medical care on the other and need to ensure high quality of life for patients. Cancer is just one example of a disease that will move more and more towards a chronic disease status. This will naturally impact costs and demands regarding quality in care and quality of life. Altogether the expenditures in cancer care alone are expected to increase and will reach a new top of 246bn$ in 2030.

There is a continuously growing demand for medical care in general and the number of novel and innovative treatments, technologies, drugs and digital tools available to achieve optimal outcomes is increasing. It is expensive to integrate these new technologies and treatments and often difficult to integrate them into existing structures, which bears the risk of inequalities in medical care if some structures provide the newest technologies, while others don’t.

Also indirect, non-monetary costs play a major role and impact on patients, here we talk about a loss of quality of life. A patient who has been diagnosed with for example cancer is confronted with a life-threatening condition that will impact his/her entire life. Their social life is impacted by a decreased ability to participate in their usual life. Patients might withdraw from their usual interactions and experience isolation from their family, friends and colleagues. This is known to impact the psychology of a human strongly negatively. Similarly impacted can be their professional life which he might not be able to continue carrying out.

The key question is how can we keep the quality-of-care stable, or improve it, improve on quality of life for patients, while also limiting costs to avoid too much pressure on health care systems? Here value-based healthcare, value-based care approaches and especially truly patient-centric value-based healthcare approaches come into play.

Value-based healthcare highlights the importance of emphasizing health outcomes of treatment relative to its costs and has been first described by the academic Michael Porter. The focus in care in this model is shifting away from quantity of care i.e. purely providing services to the patients, towards quality of care, i.e. providing high-quality medical care for patients that optimally increases also their quality of life.

His model is comprised of six pillars:

1. Organize into Integrated Practice Units,
2. Measure outcomes and costs for every patient,
3. Move to bundled payment for care cycles,
4. Integrate care delivery across separate facilities,
5. Expand excellent services across geography, and
6. Build an enabling information technology platform.

This implies that there are two perspectives of value that can be considered: on the one hand it is about how value can be increased for the patient, on the other hand side, how value can be brought to the health care system. The first primarily centers around maximizing the quality of care and life for patients themselves, while the latter is about bringing cost savings or improved financial efficiency to the health care system. In many countries, the fee-per-service model is still operational, which incentivizes spending and thus increases costs. In cancer care and health care in general, experts are currently taking on the challenge to establish new, patient-centric value-based reimbursement models, to confine health care costs, while incentivizing the delivery of superior patient care services. This is often done in collaboration with patient associations to optimally reflect patient needs along care pathways.

VBHC approaches are developing around the globe. An example can be Germany and the Netherlands, the USA being surely on the forefront of the development. Here many different medical care and reimbursement models are co-developed and tried out.

Pharma companies can integrate value-based healthcare in their research and development by different means. One key element is to involve patients in early R&D stages as well as to consider Patient Reported Outcomes (PRO) as key endpoints in clinical trials. Also the clinical trial design can be impacted for example by using Real-World Evidence (RWE) to provide a more comprehensive understanding of a drug’s effectiveness and safety in diverse patient populations. Other possibilities are:

• Integrate Health Economics & Outcomes Research (HEOR) studies
• Involve data analytics and digital health
• Run early dialogues with regulatory authorities
• Engage in multi-stakeholder collaboration