Rewarding for quality – not quantity – is becoming more and more common in health care. Providers are being compensated for services that reflect the benefits they provide and this “patients-first” model is seeing tremendous success across the industry.
In an opinion piece featured in The Hill, Jim Greenwood, BIO’s President and CEO discussed the need for expanding the use and feasibility of a value-based arrangement for medicines:
“Doctors and hospitals are increasingly being paid not for the quantity of care they provide, but for the outcome or quality of care patients receive. The emerging trend in health care is about rewarding value, rather than volume. This is the future, where there is less focus on the number of tests or treatments a patient receives and more focus on whether a patient’s health is improving.
“With a new wave of breakthrough cures and therapies expected in the coming years, ensuring prescription drugs are accessible and affordable will remain an important concern for drugmakers, policymakers, and the broader public. As the drug pricing debate continues, there are some key facts to keep in mind about a value-based model that highlight why it’s important for patients and the future of biomedical innovation.”
As Mr. Greenwood points out, this market-based solution will benefit patients in a number of ways. For example, future cures and treatments will be more accessible and affordable:
“Because drugmakers are accountable for patient outcomes, a value-based approach encourages insurers to ease coverage restrictions on more costly, innovative medicines. This occurs when an insurer places a drug on a lower cost-sharing tier, which reduces a patient’s out-of-pocket costs and encourages better medication adherence. What does this mean for patients? It means they have affordable access to the treatments they need and greater opportunity to enjoy healthier lives.”
A value-based approach will also help lower costs in other parts of our health care system:
“Biomedical innovation not only saves and improves the lives of patients, it also reduces other forms of health care spending. For example, every $1 spent on medicine for congestive heart failure for adherent patients saves an estimated $8 in other health services. …
“The facts show that prescription medicines — when taken as prescribed — reduce the need for more costly health services (like hospital stays and doctor visits). By ensuring future cures are accessible and patients adhere to their medications, value-based pricing will lower the trajectory of health care spending.
Value-based pricing is an important step in the way we pay for prescription medicines, and it is the natural next step for Congress to take after encouraging the discovery of new breakthrough treatments with the 21st Century Cures Act. As Mr. Greenwood has mentioned before: “It’s time to adopt policies that promote commonsense payment solutions, and it’s time to tie the price paid for a medicine to its positive impact on a particular patient’s health.”
Read the full op-ed in The Hill here.