Investing in population health management programs (PHMs) is becoming increasingly important for pharmaceutical manufacturers. Amidst the uncertainty of health reform, we can still count on payers pushing ahead in their efforts to contract with providers and suppliers using value-based payment models. Recognizing that paying for healthcare based on volume is unsustainable, several commercial health insurers as well as the Centers for Medicare and Medicaid Services (CMS) have set goals to move the majority of their contracts to alternative payment models within the next few years. Recently, the largest managed care organization in the U.S., Kaiser-Permanente, reported its intent to increase investments in value-based care initiatives.
Under pressure from their customers to align their contracts with value-based models, a growing number of pharmacy benefit managers are negotiating contracts where the drug maker shares risk by basing the prices of certain drugs on clinical outcomes. These arrangements take various forms, such as rebates in the event patients do not achieve adherence rate targets, or discounts if results fall short of specific clinical outcome targets. As a result, for a pharmaceutical company to demonstrate the value of a drug, a set of metrics that go beyond the cost and clinical efficacy of the drug itself, such as patient satisfaction, adherence, and hospitalization rates are now part of the equation. To effectively model these value-based contracts, the pharmaceutical company needs access to the data used to calculate these metrics, and to determine how to influence positive change in this expanded set of quality measures.
How can a pharmaceutical company adapt to this new paradigm for determining the value of a drug? By becoming a strategic partner in health systems’ population health programs (PHMs) – the cornerstone of providers’ efforts to improve outcomes and succeed in a value-based world. The pharmaceutical company has an opportunity to influence these patient outcomes and enhance the value of its products, collaborating with health systems and their information technology (IT) vendors to wrap additional services around its core drug offerings.
Let’s take a closer look at the business case for a pharmaceutical company to engage with health systems to manage a defined population. The most widely adopted area of population health (three-quarters of healthcare organizations in a recent survey) is programs targeting patients with chronic medical conditions. Medications are the principal form of therapy to control the vast majority of chronic diseases. In addition to strengthening a chronic disease management program, the pharmaceutical company realizes direct benefits from every component in the PHM framework described in my earlier post about this topic. Here we will focus on three steps to identify the population at risk and intervene with the goal of improving outcomes.
1) Identify patients at risk who would likely benefit from a particular drug. A fundamental goal of population health management is to bring patients into the system who are either (a) at-risk of a chronic disease, (b) untreated for a diagnosed condition, or (c) have lapses in care needed to control the disease. Proactive, early interventions help to avoid high-cost healthcare events down the road. The information a pharmaceutical company has about patients more likely to benefit from and adhere to a particular drug can improve the reliability and precision of predictive analytics algorithms used to identify patients needing outreach and treatment.
2) For patients flagged for intervention, present meaningful recommendations and drug information specific to the patient’s situation to clinicians. To be meaningful (and accepted by clinicians as part of their practice) the message must account for comorbidities, active treatment, recent hospitalizations, and a patient’s past self-management history (e.g., adherence to prescribed regimens). For drugs that require prior authorization (PA), presenting the PA requirements and initiating the process at the point of prescribing using electronic prior authorization tools increases the value of this decision support service.
3) Tools for care teams to monitor patients’ medication adherence and intervene when needed. Ensuring patients take their medications as prescribed is essential to achieving health outcome targets in a PHM program. Applications now available in many electronic health record systems (EHRs) and data warehouses to support PHM are designed to improve medication adherence rates. The core electronic prescribing application available in all certified EHRs has led to a greater likelihood of an initial prescription being dispensed to the patient. Decision support applications to detect gaps in care and patient non-compliance with care plans can be extended to detect medication non-adherence. This component of decision support includes algorithms to calculate the medication possession ratio (MPR), detect patients falling below a minimum MPR threshold (suggesting possible adherence problems), and trigger an alert to the patient’s care team. The pharmaceutical company can enhance the effectiveness of these applications by providing drug-specific guidance to the care team on possible actions when a patient is found to be having adherence challenges.
Longer term, emerging wireless adherence technologies containing sensors to directly monitor a patient’s actual consumption of a drug dose are worth watching. Broad acceptance and reliability of this innovative approach has the potential to detect adherence issues more accurately and quickly than MPR-based decision support.
Similar to the first two steps, the pharmaceutical company plays a valuable role in adherence management, providing support using the company’s clinical intelligence about the specific drug.
In summary, by leveraging information about its drugs, the pharmaceutical company contributes to the effectiveness of a PHM program targeting patients with chronic conditions treated by the company’s drug portfolio:
Furthermore, evidence of the impact of these services on patient outcomes is gathered for use to develop value-based models that work for everyone. Longer-term, the development of drug-specific algorithms and messaging to support these PHM services will help to advance the precision medicine goals of the pharmaceutical company and healthcare provider.
The move away from volume-based to value-based pricing for brand drugs is gaining momentum. Proactive pharmaceutical company leaders will recognize the importance of investing in population health management to achieve the company’s financial and market share goals.