The Fourth Industrial Revolution and its accompanying technological advances make it possible to connect, combine and share data in new ways, creating new business opportunities in a range of industries. Health care is no exception.
Stakeholders across the health ecosystem – payers, health care providers, and drug and device developers – recognize the pressing need to move away from historic payment models based on product utilization to value-based models that reward improvements in health outcomes.
As health care costs have skyrocketed, governments, businesses and individuals are paying ever more to maintain the health of their populations, workers and families. Outcomes-based contracts (OBCs), which tie a product’s performance to emerging evidence of improved patient outcomes, are an important component in reducing health care spending trajectories to more sustainable levels while continuing to reward product makers for risky but important innovations. Without them, systematic pricing pressures will further commoditize life sciences products. That is not just bad for life sciences companies; it will also have a negative effect on the creation of new innovations that can improve patient care.
While there has been some recent experimentation with OBCs, there is still more talk than action. Stakeholders remain concerned that OBCs are too risky, too complex to design and measure, and too difficult to replicate across multiple parties, slowing their use in the real world. In the past, these concerns were warranted. Today, however, three things make the environment different:
- The exponential growth of health data, including from consumer devices and the expanding internet of medical things (IoMT)
- Readily available computational power and data storage, which make it possible to create the infrastructure necessary to manage and use health data in secure, scalable and low cost ways
- Stakeholders’ growing willingness to work together to create new outcomes-based models
It is now time to leverage new digital technologies that make it easier and safer to collect and share data to eliminate long-standing frictions associated with OBCs.
Health outcomes platforms: the missing piece?
In other industries, platforms have changed the way we shop, bank and travel through easy to use, secure interfaces that connect disparate stakeholders. That kind of flexible, user-centric interface has been lacking in health care. Platforms, however, could unlock outcomes-based contracting at scale by streamlining the creation, management and assessment of OBCs in the following ways:
- Platforms provide a simple, transparent end-to-end solution that helps users evaluate an OBC business case and negotiate and create compliant contracts.
- Platforms simplify data integration and management, eliminating costly overheads while maintaining strong data governance and security.
- Platforms that incorporate predictive analytics algorithms can derisk OBCs by forecasting expected performance and creating consistent metrics for execution.
- Platforms can accelerate the adoption of OBCs across multiple parties since there is little to no additional cost to add users.