Driving Innovation Via All Health Care Sectors

With two major conferences in the headlines this month—the American Society for Clinical Oncology (ASCO) this past week and the Biotechnology Innovation Organization (BIO) next week—there’s an elevated focus on the amazing discoveries and life-changing innovation taking place across the biosciences.

Today, patients are often living longer and experiencing a better quality of life thanks to medical innovation. Biopharmaceutical companies are helping to lead the charge, but other stakeholders have an important role to play in driving innovation in health payment and delivery systems as well.

Working together, we can have a positive impact on improving health outcomes and lowering costs.

One way payers and the biopharmaceutical industry are driving change is through value-based contracting, in which a drug manufacturer’s payment is tied to the performance of its product. In fact, a recent study from Avalere Health shows that one in every four health plans now has at least one value-, or outcomes-based contract with a drug manufacturer. This is significant, but more must be done to link coverage and reimbursement levels to a drug’s effectiveness and how often it has to be utilized.

Innovative health benefit design matters, too. Value-based insurance design, which shifts the focus from how many dollars we spend to how well we spend them, is critical. Equally important, patients shouldn’t be financially penalized for using a drug from a different formulary tier if that drug is the most effective in treating the patient’s specific condition.

Similarly, engaging with patients frequently and in innovative ways can help to drive important changes in care that can improve outcomes. As health care becomes more patient-centric, there are more opportunities for patients and their caregivers to provide input on what matters most to them.

Innovative payment models are also being tested by the Centers for Medicare and Medicaid Services. CMS is piloting various payment programs and quality measures with hospitals and physicians, which could prove successful if they emphasize the appropriate utilization of services and minimize unintended consequences.

These are just a fraction of the many ways that we can all can avoid innovating in a vacuum and work toward defining this period as the golden age of American health care.