The Latest in the Move to Value-Based Reimbursement and Remaining Challenges

Although there has been an increased interest in value-based contracting, the most common type, pay-for-performance, has had mixed results to date, and many challenges remain.
 
Panelists, during a session on value and value-based reimbursement at the Academy of Managed Care Pharmacy Annual Meeting, held March 27-30 in Denver, Colorado, discussed the benefits and challenges of value-based contracting and the current and evolving use of value frameworks.
 
Tomas J. Philipson, PhD, Daniel Levin Professor of Public Policy Studies at the University of Chicago, started the session by outlining the 5 challenges that have faced value-based contracting so far:

1. There is a need for stronger incentives. According to Philipson, efforts in this space have so far been small, with maybe 1% to 2% of payments being on quality and the rest still on volume.
2. Value needs to be measured appropriately. Pay-for-performance has focused on processes because measuring outcomes is more difficult. In order to have more of an impact, there needs to be an understanding of what measures are valuable to patients.
3. Patient preferences need to be accommodated.
4. Don’t get too complex. These contracts should start simple and not get too complex too quickly.
5. Innovation should be rewarded.

 
Peter Neumann, ScD, director of Center for the Evaluation of Value and Risk in Health Tufts Medical Center, said all the efforts to measure value has created an “interesting period of value frameworks.”
 
He finds it important that the value frameworks out there, such as the National Comprehensive Cancer Networks’ Evidence Blocks, the Institute for Clinical and Economic Review (ICER)’s Value Assessment Framework, and Memorial Sloan Kettering Cancer Center (MSK)’s DrugAbacus, are all coming from the private sector.
 
“You may not like them, but you can’t blame the government for doing this to you,” he said.
 
In other countries, the value frameworks are a government function, and the fact that they are coming from the private sector is not only uniquely American, but means that they are here to stay, Neumann said.
 
That these frameworks all have different approaches does make it difficult to compare them. They all measure clinical benefit in some way, but only MSK considers novelty of treatment and the rarity and burden of the disease, and only ICER takes into account budget impact.