Many products entering the market promise long-term savings after high short-term investments. The challenge is that these innovations strain existing payment models that are not designed for the performance and actuarial uncertainty of these products. The poster child of this dynamic are cell and gene therapies which often come with curative promise. 

Considering the current healthcare payment infrastructure and the high price tag of cell and gene therapies, payers often struggle with three types of risk: financial, performance, and operational. Financial risk manifests as the potential for huge upfront expenditures. Performance risk arises when a certain drug doesn’t live up to outcome expectations. Operational risk are hurdles that include the unique care coordination requirements and data-collection components to analyze patient outcomes data and determine value.

To make progress, health plans will have to support the adoption of metrics that go beyond regulatory requirements of safety and efficacy and think holistically about metrics that capture the impact of these innovations. Health plans, manufacturers, and care providers must align value endpoints to a meaningful time-to-impact horizon, that extends beyond the typical 12–18-month window and sees how individual and population-level costs of care are affected. 

This is the dynamic most likely to prevent new products from reaching all eligible patients and exacerbate disparities along sociodemographic lines. Redesigning payment models to account for value in the long- and short-term will require simultaneous experimentation and a renewed focus on aligning incentives. There is not and potentially never will be a one-size-fits-all solution to this challenge. To make progress we will need to continue to experiment, challenge the conventional wisdom, and be patient-centered in our actions. 

Recent approaches to novel contracting for high-cost drugs 

Bespoke care increases the need to determine for whom an innovation is appropriate and to arm both patients and clinicians with the information necessary to make timely decisions from an ever-growing list of choices. Genetic testing exemplifies the challenges we face in effectively and appropriately leveraging new innovations. Despite growing spending on genetic testing, studies have found myriad examples of inappropriate use. Two contributing factors to this state are the pace of change and the variability in quality of genetic tests. 

Not all use is valuable, and the environment invites excessive use 

Coming to a shared definition on when using an innovation is or is not appropriate is easier said than done. The pace of innovation makes it difficult for most stakeholders to keep up and make the nuanced decisions necessary to deliver evidence-based care via shared decision-making. Still, it is possible. The example below highlights two organizations who have built infrastructure around shared decision-making while prioritizing cost-effectiveness.

Carrum Health is a digital health company that connects employers and their employees to provider Centers of Excellence. The organization wanted to offer higher value to the employers they serve through cancer care bundles. MSK, a top-rated cancer center, has been partnering directly with employers through their MSK Direct program to offer comprehensive benefits programming to employers who sought to align financial incentives with patient-centricity. Carrum and MSK partnered to create comprehensive care bundles for breast and thyroid cancers after recognizing their shared goal: deliver quality care to cancer patients and financial savings to employers.

Both partners brought crucial expertise and capabilities to the partnership. MSK had a dedicated team studying costs to determine bundle pricing while Carrum provided real-world data to inform cost analyses. They ultimately landed on two-year bundles for non-metastatic breast and thyroid cancer patients where MSK provides cancer care services for a single upfront payment from employers and Carrum provides a case manager for the patient, manages a digital communication platform, coordinates between MSK and local oncologists, shares patient records with MSK, and organizes patient travel. This partnership enables reduced total cost of care due to improved diagnostics, treatment planning, and appropriate use while still offering high-quality care to patients. 

Successfully hardwiring appropriate use into care models expands on an innovation’s potential benefit. For genetic testing specifically, appropriate utilization of this innovation can enable improvements in patient care and enable savings beyond the traditional 12-month time period through better informed care decisions. 

The pace of innovation is rapid, and it’s difficult for even the most informed physicians to operationalize new treatments and technologies. The ability to keep up with an ever-growing fountain of medical knowledge is a critical factor of bespoke care that will only be magnified over the coming years and decades. 

Personalized medicine is becoming more clinically possible, but operationally difficult

There has been tremendous investment and progress in the field of clinical decision support, and there is no shortage of tools to make the workforce more efficient and increase the consistency with which we deliver the right care, to the right patients, at the right time. New and existing technology can help organizations and clinicians with delivering bespoke care. Instead of asking “what technology can we use?”, leaders should be asking “what do we need to do?” and determine what products, people, and processes lead to the best outcomes. 

Castell, an Intermountain Health company, has focused on what needs to be done to facilitate technology-enabled decision-making. Care coordinators working in primary care at Castell were manually reviewing charts to identify patients due for preventative care services for four hours per day. This tedious chart review prevented care coordinators from accomplishing higher-value tasks. Using Intermountain’s existing partnership with Notable, Castell introduced “digital assistants” powered by artificial intelligence (AI) that can surface provider recommendations in a central location of the electronic health record for care coordinators to reference.

After implementing the digital assistants, care coordinators experienced a 70% reduction in time spent per chart, saving approximately 1.7 minutes per chart and decreasing daily time spent reviewing charts for each care coordinator from four hours to one hour. 

Castell’s example of utilizing tech solutions to aid in decision-making emphasizes the importance of considering the task at hand, the best use of human talents, and then asking what is the best strategy to complete that task. It is important to also consider that there are advantages of taking technology out of the equation. Castell’s approach highlights the value of thinking about how an entire care team can benefit from technology rather than just physicians.

Bespoke care will require greater utilization of patient data such as claims data, electronic health records, commercial trends and information, and genetic data. Innovations such as wearable devices allow for continuous gathering of data, but to make use of it, patients must trust whoever they’re sharing data with. Unfortunately, patients have the least amount of trust in the organizations creating innovative products, and there is a concerning trend of decreasing patient trust across the board.

Percent of consumers willing to share health data¹ with various stakeholders

Stakeholders that rely on data to improve innovations must bolster trust

Physicians are the only stakeholder that the majority of consumers trust with their health data. The stakeholders that are best poised to translate patient data into meaningful change in products and innovations, like health tech and pharma manufacturers, must be good stewards of patient information and usher in a whole sector approach to building patient trust. These stakeholders also must ensure that physicians trust innovations and can explain the utility of this data sharing to patients so they can further mitigate patient concerns.