Chain Drug Review – Commentary: “Health Care Outlook for 2015”

This commentary was originally published in the January 5, 2015 issue of Chain Drug Review.

By: Dan Leonard, President, National Pharmaceutical Council

During 2014, health care discussions continued to focus on the changes initiated by the Affordable Care Act (ACA) and ongoing pressures to reduce health care costs. The November mid-term elections amplified the debate by focusing on the political aspects of health reform and how voters perceive the law. In health policy circles, conversations frequently centered on how health care providers, payers and purchasers are responding to the changes mandated by the ACA and necessitated by the continued growth in health spending.

All too often these deliberations stop one step short of assessing what truly matters: How will the law and these stakeholders’ responses impact the quality of health care in America? Moreover, how will it affect our health? If you consider this question at the micro-level instead of at the macro-level, it becomes how will it affect you, me, our families and our neighbors?

Admittedly, these are difficult questions to answer, but the National Pharmaceutical Council (NPC) is spending a lot of time trying to do just that. While a clear picture surely won’t emerge for years, shifting from a “volume”-based system where payments are based on the quantity of care to a “value”-based system where rewards are based on improving health outcomes, has opened a window of opportunity to better quality of care. Many stakeholders are eager to see, and help lead, this transformation. NPC is hopeful that with all of the tools we have at our disposal—enhanced technology, new data analysis techniques, and cutting-edge treatments—coupled with innovative policy changes, such as new models for delivering and paying for health care, we will be successful in our pursuit of better value.

But with eagerness must come caution, for as the Hippocratic Oath states, and we in the policy community would be wise to embrace: “First, do no harm.” We must remember that for our efforts to be truly successful, value must be found in the eye of the most important beholder—the patient.

Three prominent trends in health care provide us with some insights into how patients are being affected by this pursuit of value as it relates to biopharmaceuticals. These include: 

  1. How new insurance and care delivery models are valuing treatments;
  2. How changes in health coverage are affecting individual patients’ access to treatment options; and,
  3. How “real world” data is being used to evaluate treatment options.

1) How New Insurance and Care Delivery Models Are Valuing Treatments

As health care costs have continued to rise, health care payers have been exploring different approaches to slow spending growth. Some approaches include shifting costs to consumers and employing new delivery and payment mechanisms to realign care to focus on the “value” of the care provided for a patient as opposed to the “volume,” or number of procedures or treatments provided. To better focus on value, providers and patients should decide on the best treatment available to them. Payers should provide patients with access to the best treatments, and thus use appropriate tools to measure the value of the treatment provided and incentivize improved health outcomes.

With the advent of consumer-directed health plans (CDHPs), employers are shifting more costs to employees through higher deductibles and greater cost-sharing. This movement, which began over a decade ago, has accelerated in recent years due in part to employers’ interest in complying with changes in the ACA. An August 2014 National Business Group on Health survey of large employers found a nearly 50 percent jump in the number that plan to offer a CDHP as their only benefit plan option next year. Almost one-third (32%) plan to do this in 2015, compared with 22 percent in 2014.

If the purpose of health insurance is to spread risk and ensure that individuals who become ill are protected from financial harm and able to receive the care they need, then the growth of CDHPs should be viewed with some concern. Recent research on CDHPs published in the American Journal of Managed Care indicates that patients (even those with serious or chronic illnesses) who are forced to shoulder a large deductible and high out-of-pocket spending may choose to delay or altogether forgo treatments or a trip to the pharmacy despite their urgent health needs.

Another recent phenomenon tied to the search for better value in health care and incentivized by the ACA, is the development of Accountable Care Organizations (ACOs), which operate primarily in Medicare but are expanding to other insured populations. The Centers for Medicare and Medicaid Services (CMS) define ACOs as “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.” ACOs have dual goals of—one—improving care coordination for patients (to minimize duplication of tests, procedures, etc., and medical errors) and—two—spending health dollars more efficiently. When ACOs meet the quality measures and performance standards set out for them, they will share in the savings they achieve.

Pharmaceuticals, together with pharmacists, can be powerful tools in ACOs’ arsenals to reach quality and cost-savings goals, and meet the needs of individual patients. Many of the patients being treated by ACOs have chronic illnesses that require substantial care coordination and ongoing treatment; appropriate use of prescription medications and improved medication adherence can greatly enhance quality of care and lead to cost-savings. However, ACOs have not yet fully optimized use of prescription medications and medication management to achieve their quality and cost-savings goals, according to research published in the American Journal of Managed Care  and authored by NPC, the American Medical Group Association and Premier, Inc.  

Another insurance design that shows greater promise in balancing cost-savings goals with the need for flexibility in coverage is Value-Based Insurance Design (V-BID). Under V-BID, the more clinically beneficial a therapy is for a patient, the lower the patient’s cost share. For example, a woman who requires a mammography because she is at high-risk for breast cancer would pay less for her screening than someone who has little or no risk factors for breast cancer. Thus, V-BID encourages the use of medically necessary therapies and services and reduces barriers to access for these services.

2) How Changes in Health Coverage Are Affecting Individual Patients’ Access to Treatment Options

Thanks to technological improvements that allow us to gather, organize and evaluate massive amounts of data, we have the capability to discern what medical treatment is most likely to help the average person with a given health concern. This is a huge step forward for our health system. But, the fact is that no two people who enter a doctor’s office, hospital or pharmacy are exactly alike, and so what works well for one patient may not work as well for another. Besides being genetically unique, each person brings a set of risk factors, behaviors, and preferences, among other things, to the table that demands that they be treated individually.

This “heterogeneity” among patients will require us to walk a fine line between striving to achieve value in health care by identifying the most effective solutions which work for the vast majority of patients, while recognizing not all patients respond to treatments in the same way. It will require us to—in an ongoing and timely manner—identify, disseminate, and incentivize the use of the best evidence to treat patients, while at the same time honoring physician autonomy and patient choice. To sum it up, it will require us to be directive, but also flexible, in health insurance design and delivery.

3) How “Real World” Data Is Being Used to Evaluate Treatment Options

Over the past decade, there is increasing availability of clinically rich information about how treatments work in the real world. This information is based upon data from patient registries, electronic health records, administrative claims or mobile health devices and has the potential to greatly enhance understanding about which treatments offer the best course of care for patients. While clinical trials have been viewed as the “gold standard” in medical research, these new types of evidence are generally geared toward studying outcomes in “real-world” settings, to allow for a more realistic and holistic evaluation and understanding of the efficacy of certain treatments or care regimens.

Getting a better handle on how treatments work in the real world is certainly an important task, but it is not an easy one. When conducted properly, real-world evidence can provide meaningful information to practitioners and patients, but when done poorly, misinterpretations are possible. Doing this type of research well requires access to credible and reliable data and information, the use of sound research methods and following best practices in the evaluation of the research findings.  To that end, NPC has been working with experts and end-users to help identify and utilize good practices for developing and evaluating high-quality, real-world evidence and determining how different stakeholders can communicate the research findings.

At NPC, we believe our job in 2015 and beyond is to cast a spotlight on the critical health care issues of the day and to conduct research that helps all stakeholders to understand these issues more thoroughly so we can move to a truly value-based system that puts what’s best for individual patients front and center, where they deserve to be.