Health outcomes-based contracts
Many health care systems across the world simply can’t afford to give patients access to new medicines because of rising demand due to factors, such as people living longer and a trend toward more unhealthy lifestyles.
This has led to health care being structured and incentivized with a strong focus on short-term cost savings. The emphasis is very much on inputs, rather than outputs and value delivered. For example, payment is based on number of operations carried out, injections given or pill packets prescribed.
This leads to a lot of wastage, such as medicines that don’t work as well as they should do or unnecessary procedures and referrals. The result is significant cost in the health care system.
But if pharmaceutical companies could show payers (such as insurance companies) and providers (such as hospitals) how drugs could save money or deliver more value in the long term, more patients could benefit.
And if this new type of engagement happened on a digital platform, it could be implemented and scaled rapidly.
In response to this, some health care companies, providers and payers are collaborating on outcomes-based digital contracts, such as a “Health Outcomes Platform.” This allows transparent, end-to-end, seamless contracting between all parties to improve patient outcomes and reduce total health care costs.
The aim is to encourage the parties to take a broader perspective, beyond just the clinical outcome, and instead start to think about three dimensions:
- Clinical outcome: did the person survive? Were they cured?
- Economic outcome: did the intervention or drug get people out of hospital beds quicker? Did it help with a quicker diagnosis and intervene before the disease progressed? Did it prevent a more expensive procedure further down the line?
- Humanistic outcome: did the patient’s quality of life and the general patient experience of their health care improve?
Outcomes-based digital contracts enable payers, such as hospitals and pharmaceutical companies, to come together and assess the true costs and risks of adopting (or not) a drug or treatment. And by digitalizing the contract on a dedicated platform, all stakeholders can get transparency around the performance of a contract using dashboards, and even use analytics to predict performance.
Digitally transformed health care is leading the way
Both of the examples described above demonstrate how digital transformation is helping life sciences organizations meet the challenges of their industry. The transformative mindset of these digital-first players is changing the game.
Already, pharmaceutical companies are successfully trialling new connected devices, such as asthma inhalers that can monitor drug delivery to individual patients on a global scale. They are using machine learning and AI to monitor online forums and report to regulators on adverse effects. They are bringing patients closer to physicians through health reporting apps. And they are enabling online communities of support for patients, which can help them manage and defeat the diseases they suffer from.
Whether it’s patients who can get better treatment faster and improve their quality of life, payers such as health care providers who can improve their services and lower costs and risk, or pharmaceutical companies who can get better commercial results – for every stakeholder in the health sector, digital transformation can help build a better working world.