The more I study it, the more I believe the process of drug assessment by payers and providers needs some serious attention (we’ll pay plenty at the Real Endpoints Symposium, March 11-12). But driving action requires concern — and so, who cares? Answer is: anyone interested in improving the dismal economics of healthcare. As we noted here, drug-spend inflation is skyrocketing, thanks largely to the cost of new drugs and, in particular, new specialty drugs. … Continue reading
Why Payers Don’t Really Control the Drug Benefit — and Why They Need to
It’s certainly the biggest change in healthcare in my business lifetime: the transformation from a fee-for-service economy fueled by abundant dollars to an essentially capitated world of financial tradeoffs. The transformation will likely take longer than we expect. (What transformation doesn’t?) Still, payers and providers –and the various big and small service providers hoping to serve them — are already trying to improve swaths business processes as diverse as connectivity, transparency, and consumer communication (see … Continue reading
Payers, Churn & What It Means for Total Cost of Care
One question we get from pharmaceutical and diagnostic clients quite frequently: do payers really care about lowering the costs of care if the cost savings don’t show up for a few years? The problem they’re talking about is churn: a payer invests in a new cost-saving therapeutic program … only to see the savings redound to his payer-competitor when the patient switches plans (which they do every 3-5 years). Take adherence. It should be an … Continue reading
What Payers Want: An Interview with GSK’s Jack Bailey
Jack Bailey, the man in charge of GlaxoSmithKline’s US goverment affairs, public policy and payer marketing business unit, knows his company has to change. As providers and payers move from the incentives of a fee-for-service model to one that focuses on value, and are exploring new approaches such as risk-sharing and bundled payments, drug firms like GSK need to make sure that a “new medicine [has] a compelling value proposition, particularly for payers,” said Bailey. … Continue reading
Zeke Emanuel: Re-Incentivizing Pharma & Device Companies to Solve Technology’s Data Problem
Zeke Emanuel would like to set the record straight. He’s not against new medical technology. Indeed, the UPenn med school and Wharton professor calls the profusion of industry-generated new technologies “a great thing”. But his support is necessarily tempered — a wariness born from his days as a health policy advisor in the Clinton and Obama administrations. Emanuel’s willingness to critique newer, costlier innovations that deliver results no better than older, cheaper technologies has made … Continue reading
The Requisite Data: A Discussion with United’s Lew Sandy
What goes around comes around. “Employers are asking: what proportion of your reimbursement [spending] on physicians, hospitals…or pharmaceutical companies is performance-based,” says Lewis Sandy, MD, SVP Clinical Advancement at UnitedHealth and principal in its Center for Reform and Modernization. (Click here for audio excerpts of the interview). ”And we’re being scorecarded against that.” Which means, for product companies, that either risk-sharing is going to be the dominant marketing tool to payers (if your drug achieves … Continue reading
Drug Targeting & Reimbursability: It Ain’t Easy
All things being equal, insurers prefer a drug that’s designed to work for a person with a specific genotype than one targeting a more general group of patients. The notion makes sense medically. It should make sense economically too — less drug gets wasted on people who won’t benefit and who might incur expensive side-effects in the bargain. That’s the promise of personalized medicine, and it’s why new drugs focusing on more specific populations than … Continue reading
Reimbursement as Environment
Who controls reimbursement? Talk to a drug company, or most pharmaceutical analysts, and the answer is payers. Talk to payers and the answer is far more complicated – and not one where they claim overall control of the process. The fact is reimbursement doesn’t come down to a decision; it’s an environment. And like any environment, its effects have multiple causes. I don’t pretend to fully understand why sales of Dendreon’s prostate cancer therapy, Provenge, … Continue reading
Healthcare's Topeka Problem
You might have heard that, for about a month, domestic abusers in Topeka roamed free. Not because the community encourages wife-beaters. But because it couldn’t afford to prosecute them. County DAs, dealing with a 10% budget cut, said they didn’t have the money to go after misdemeanors, including domestic abuse. So they sent the cases over to Topeka city prosecutors, who, suffering under similar economics, likewise claimed they couldn’t afford to prosecute under the local … Continue reading
At the Shadowy Intersection of Payers and Product Companies
I suppose it’s understandable, given the history. Payers don’t trust the cost-effectiveness information pharma and device companies provide them about their products. (It does always somehow prove the supplier’s economic value.) Manufacturers, for their part, figure that whatever decision a payer makes, it’s always going to be driven by short-term economics. In fairness, it often is. This mutual distrust isn’t particularly problematic when a healthcare economy has plenty of room for growth. Generally, both groups … Continue reading