Making Outcome-Based Pricing Initiatives Add Up in The Healthcare Industry

Current state of reimbursement models offers practical alternatives for outcome-based pricing and payment methods

Spend more, get more. That’s how it works, right? Not always—especially in the healthcare field. While the U.S. spends more than twice as much (per capita) than the OECD (Organization for Economic Cooperation and Development) average on healthcare, it is ranked a paltry 35th in the Bloomberg 2019 Healthiest Country Index.

Healthcare spending has risen steadily over the past decade. And the skyrocketing cost is placing increasing pressure on the entire healthcare delivery chain, including providers, payers, producers, and patients. In a recent Biopharma poll, more than 80% of healthcare executives identified pricing as the industry’s most pressing issue.

The primary goal of the drug manufacturer is to ensure that their drugs provide the highest value at a price that is representative of the benefit to the patient, provider, and payer.

Payers dispense vast sums of money for drugs and care coverage, which are designed to improve patients’ quality of life and return them to their productive selves. However, payers have little or no visibility into the true effectiveness of the treatment. They finance treatments based on submitted data that, historically has shown about a 50-60% chance of a positive health outcome.

That just doesn’t add up.There’s got to be a better way. 

 

Several major players have begun to experiment with outcome-based pricing models as an innovative approach to aligning reimbursements more closely with positive outcomes, while simultaneously bringing greater stability and predictability to pricing in the life science industry. This eBook provides insight into:

• The players and current state of reimbursement models
• Adjustments that need to be considered and methods for reforming reimbursement models
• The need for more dynamic outcome-based agreements
• Practical alternatives for both outcome-based pricing and payment methods for all stakeholders in the value chain
• The role of real-time analytics to monitor and ensure that reimbursement and pricing structures meet expectations