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Dr Jane F. Barlow: How Curative, High-Cost Therapies Bring Challenges to the Reimbursement Landscape

The introduction of new curative—or durable—treatments has brought 3 challenges to the reimbursement landscape, explained Jane F. Barlow, MD, MPH, MBA, senior advisor, Center for Biomedical Innovation at Massachusetts Institute of Technology.


The introduction of new curative, or durable, treatments has brought 3 challenges, explained Jane F. Barlow, MD, MPH, MBA, senior advisor, Center for Biomedical Innovation at Massachusetts Institute of Technology.

Transcript

How has the introduction of curative, high-cost therapies brought challenges to the current reimbursement landscape?

The introduction of these new curative, or the word I like to use is durable, treatments has really brought 3 challenges. One challenge is just scoping the actuarial risk. Actuarial risk is, "how likely am I to have one of these patients in my plan and pay this potentially very high-cost one-time treatment?" Which, kind of, leads to the second risk around this, and that’s the risk of the one-time payments.

One-time payments are burdensome to the plan, potentially, if you have multiple patients with a very high-cost therapy of something not really replacing some other treatments that already exist. So, when you think about the payments for most chronic conditions, the payment is spread out over time for the treatment and the value that you get is also spread out over time. So, in this case, you do a one-time, high-cost treatment, and that value is spread out, again, still over time. So, it creates a problem for payers, particularly if that payer is worried about losing that member to another plan where they won’t actually see that value.

The third issue payers see is around the risk around performance. So, while we hope that these are curative, we tend to use the term durable because we don’t know how they’re going to perform over time and whether patients will, in fact, truly be cured, or whether, at some point, these will wear off and whether that’s at 1 year, or 3 years, or 5 years, or 15 years, we just don’t know. So, you’re paying for a very high-cost treatment on the hope that you won’t have ongoing treatments along the way.

 
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