Category

Healthcare Value

Creating Stakeholder Dialogue Around Drug Pricing

By | Drug Costs, Healthcare Costs, Healthcare Value, Informed Patient, Rising Cost, Uncategorized | No Comments

The increase in prescription drug pricing and spending has been one of main factors contributing to the high costs of healthcare in the United States. In fact, according to a 2015 report by the National Center for Health Statistics, the national health expenditure for prescription drugs made up 10.1% of the total national health expenditure that reached $3.2 trillion that year [1]. Certain measurements of drug pricing villanize manufacturers an industry with outrageous cost and spending of prescription drugs. For example, patent exclusivity, research and development efforts, and competition in the market are generally blamed for the initial price increases. However, these measurements also cause skepticism and inaccuracies, thus shining a negative light on pharmaceutical companies. Therefore, the outliers misrepresenting pharmaceutical companies and the number of failed drugs need to be addressed in order for patients to have a better understanding on drug pricing.

Two outliers that don’t represent the overwhelming amount of biopharmaceutical companies are Mylan and Turing Pharmaceuticals. In 2007, Mylan Pharmaceutical acquired EpiPen, a handheld device that injects epinephrine to an individual with life-threatening allergic reactions, and increased the price of the drug by 500% [2]. The price rose from $100 to $600 in 2008 without any justification [3]. To no surprise, the company came under fire by the media for its unethical approach. The price increase can be attributed to Mylan’s patent use which allowed them to profit off of the drug without facing competition from a generic drug for a period of time [4]. In a similar situation, Martin Shkreli, founder and CEO of Turing Pharmaceuticals, raised the price of the drug Daraprim from $13.50 to $750 a tablet overnight [5]. What were once ‘affordable’ drugs became unaffordable for the vast majority of users causing outrage and shaming for pharmaceutical companies. Again, there are outliers that don’t represent the overwhelming majority of pharmaceutical companies that are developing new and novel drugs.

According to the 2017 Edelman Trust Barometer, the trust in the healthcare industry is slowly increasing compared to last year [6]. The trust in pharma in the U.S. seems to be “neutral.” With pharmaceutical companies like Mylan and Turing, it’s understandable why Americans might not be fully invested in pharma. When pharmaceutical companies make the headline in the news, it usually is unfavorable.

Furthermore, research and development is key when it comes to developing new drugs and used as justification for drug pricing. As we know, the process of creating a drug involves a lot of trials and errors where high costs are incurred in order to satisfy regulations imposed by the Food and Drug Administration (FDA); thus, it can create opportunities to price the drug even higher than it actually cost to get it out to the market. According to the 2017 Edelman Trust Barometer, 8 out of 10 people believe the pharmaceutical industry puts profit over people [7]. In reality, pharmaceutical companies only realize 39% of initial gross drug expenditures [8]. In addition, companies like Gilead are helping subsidize the cost of its drug, Epclusa, in Australia, which will help approximately 200,000 Australians that face the challenges of hepatitis C [9]. For example, Merck created an HPV vaccination program for cervical cancer in Rwanda [10]. Despite the media’s negative coverage, several other pharma companies have partnered with organizations like the Gates Foundation and UNICEF to provide medications for the developing world [11].

Lastly, it’s critical to address the failed formularies that ultimately lead to higher pricing as these costs must be recouped. The price to develop a drug is over $500 million [12]. According to the Tufts Center for the Study of Drug Development, the cost to develop and win marketing approval for a new drug is $2.6 billion [13]. The variance in the two aforementioned distinguish by fourfold, but it’s really expensive. Aside from this statistic, during clinical research phase studies, only 25-30% of initial drugs move to phase 4 where the drug is trialed by volunteers with the disease of interest [14]. The development of a drug can take a long time, especially when it comes to illnesses like cancer or HIV. During this time, the initial fund to conduct these studies starts to deplete. As patients, we need to understand that these are factors that even pharmaceutical companies have no control over.

As we wait for a viable healthcare reform under the current administration, it’s important to push for one that restores the well-being and decreases the burden of millions of Americans. During the process, there needs to be increased dialogue between patients and providers, such as pharmaceutical companies. All to avoid situations like that of Mylan and Turing. If drug pricing continues to increase, the biopharmaceutical industry will face more scrutiny. There will be increasing tension between patients, pharmaceutical companies, and pharmacy benefit managers (PBM). It’s important for all stake holders to be open and transparent in order to resolve these issues successfully. In an ever changing environment, we must learn to understand the process in order to appropriately resolve issues plaguing our society. We are ever changing.

To further explore the drug pricing trends, CHI is organizing the 5th Annual Healthcare Executive Roundtable on October 12, 2017, in Manhattan, New York. The Center for Healthcare Innovation’s “Understanding Value in Consumer-Orientated, Patient-Centric Era” Roundtable is an intimate, invitation-only, expert roundtable discussion for healthcare executives, key opinion leaders, and patient groups to discuss how stakeholders throughout the healthcare ecosystem can address critical issues related to healthcare value, quality, and cost. This year’s Roundtable will focus on several key market forces that affect the current state of healthcare in the U.S. Please visit http://chisite.org/roundtable/ for more information.

Work Cited

[1] Health Expenditures. Centers for Disease Control and Prevention. https://www.cdc.gov/nchs/fastats/health-expenditures.htm. Accessed September 14, 2017.

 

[2] Mylan Raised EpiPen’s Price Before the Expected Arrival of a Generic. The New York Times. https://www.nytimes.com/2016/08/25/business/mylan-raised-epipens-price-before-the-expected-arrival-of-a-generic.html?mcubz=3. Accessed September 14, 2017.

 

[3] Mylan finalizes $465 million EpiPen settlement with Justice Department. CNBChttps://www.cnbc.com/2017/08/17/mylan-finalizes-465-million-epipen-settlement-with-justice-department.html. Accessed September 14, 2017.

 

[4] Mylan Raised EpiPen’s Price Before the Expected Arrival of a Generic. The New York Times. https://www.nytimes.com/2016/08/25/business/mylan-raised-epipens-price-before-the-expected-arrival-of-a-generic.html?mcubz=3. Accessed September 14, 2017.

 

[5] Drug Goes From $13.50 a Tablet to $750 Overnight. The New York Times. https://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html. Accessed September 20, 2017.

 

[6] Trust in Healthcare: Making Progress. Edelman. https://www.edelman.com/post/trust-healthcare-making-progress/. Accessed September 20, 2017.

 

[7] Trust in Healthcare: Making Progress. Edelman. https://www.edelman.com/post/trust-healthcare-making-progress/. Accessed September 20, 2017.

 

[8] Majority of Drug Revenue Not Going to Pharmaceutical Companies. The American Journal of Pharmacy Benefits. http://www.ajpb.com/news/majority-of-drug-revenue-not-going-to-pharmaceutical-companies. Accessed September 20, 2017.

 

[9] New Hepatitis C Drug to be subsidized in Australia. The Pharma Letter. https://www.thepharmaletter.com/article/new-hepatitis-c-drug-to-be-subsidized-in-australia. Accessed September 25, 2017.

 

[10] Even Pharma’s Good Deeds Are Criticized. Forbes. https://www.forbes.com/sites/johnlamattina/2013/05/06/even-pharmas-good-deeds-are-criticized/#612c29ec4cd3. Accessed September 20, 2017.

 

[11] Even Pharma’s Good Deeds Are Criticized. Forbes. https://www.forbes.com/sites/johnlamattina/2013/05/06/even-pharmas-good-deeds-are-criticized/#612c29ec4cd3. Accessed September 20, 2017.

 

[12] R&D Costs For Cancer Drugs Are Likely Much Less Than Industry Claims, Study Finds. NPR. http://www.npr.org/sections/health-shots/2017/09/11/550135932/r-d-costs-for-cancer-drugs-are-likely-much-less-than-industry-claims-study-finds. Accessed September 20, 2017.

 

[13] Cost to Develop and Win Marketing Approval for a New Drug Is $2.6 Billion. Tufts Center for the Study of Drug Development. http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study. Accessed September 28, 2017.

 

[14] Step 3: Clinical Research. U.S. Food & Drug Administration. https://www.fda.gov/forpatients/approvals/drugs/ucm405622.htm. Accessed September 20, 2017.

 

Measuring Value: Through the Lens of Patients

By | Affordable Healthcare Act, Healthcare Providers, Healthcare Quality, Healthcare Value, Volume-to-Value | No Comments

 

Hospital Value-Based Purchasing (VBP) is Medicare’s payment system to reward providers for the quality of care they provide. This program rewards acute care hospitals with incentive payments for the quality of care they give to patients, not just the quantity of services they provide. The payments are made by asking, “How well did you do? rather than How much did you do?.”

MEASURING VALUE

Management guru Peter Drucker is often quoted as saying that “you can’t manage what you can’t measure.”

The goal of value-based reimbursements is to replace the fragmented, fee-for service care with comprehensive, coordinated care using payment models that holds organizations accountable for cost control and high quality outcomes. The shift from volume to value starts with measurement. Measuring volume is simple, but how do you measure value in health care?

The health care value equation is defined as quality over cost.

TOTAL PERFORMANCE SCORE (TPS)

A hospital’s performance is assessed on the measures that comprise various domains. The domains are weighted and rolled up to the Total Performance Score. The FY 2017 Total Performance Score (TPS) is derived from 4 domains as below:

  1. Clinical Care (30 percent)
    • Outcomes (25 percent)
    • Process (5 percent)
  2. Patient and Caregiver Centered Experience of Care/Care Coordination (25 percent)
  3. Safety (20 percent)
  4. Efficiency and Cost Reduction (25 percent)

INCENTIVE PAYMENT

The Total Performance Score is then translated into an incentive payment that makes a portion of the base Medicare severity diagnosis-related group (MS-DRG) payment contingent on performance. It’s possible for a hospital to earn back a value-based incentive payment percentage that is less than, equal to, or more than the applicable withholding for that Fiscal Year (FY). Following is the withholding schedule:

FY 2013 1.00% FY 2016 1.75%
FY 2014 1.25% FY 2017 2.00%
FY 2015 1.50% Succeeding Years 2.00%

UNIT OF VALUE MEASUREMENT

The data collection and the performance improvement at the hospital level has been challenging, especially with the exponentially increasing metrics used to measure performance. The complexity increases when the unit value of measurement is at the individual provider level.

The next phase in the value transformation will focus on measuring individual provider performance in the delivery of high value care to address the question(s) – “How well did the individual provider do?” and more importantly, “How well did the patient do?”.

FURTHER DISCUSSION

CHI will further explore the evolving definitions of healthcare value at our Healthcare Executive Roundtable Discussion on 10/12/17 in Manhattan, NY. The Roundtable is an expert, cross-sectoral discussion designed to help healthcare stakeholders optimize engagement, communication, and collaboration. The exclusive roundtable provides the top thought-leaders, visionaries, and executives from the patient advocate, provider, biopharma, and payer spaces with the latest insights and ideas on how patient engagement drives healthcare value for all stakeholders. Please visit chisite.org/education/healthcare-executive-roundtable for more information.

Dr. Jason Arora, CHI Research Group Member & Director at ICHOM Named to Forbes 30 Under 30 List

By | Healthcare Value, Volume-to-Value | No Comments

LONDON (January 19, 2017) – Jason Arora of the International Consortium for Health Outcomes Measurement (ICHOM) and Member of the CHI Research Group, was named in Forbes’ second annual “30 Under 30 Europe” list, a list that features 300 young innovators, entrepreneurs and leaders across Europe who are under 30 years of age and who are transforming business, technology, science, finance, media, culture and more, as judged by some of the most accomplished and acclaimed individuals in each category.  For the full list, please visit:  www.forbes.com/30under30europe.

 

Jason Arora is a medical doctor, public health scientist and rising global expert in value-based healthcare, which focuses on delivering the best possible outcomes for patients at the lowest possible cost. Dr. Arora has helped grow ICHOM from a startup to innovative healthcare catalyst, successfully inspiring governments, hospitals and life-science companies to adopt the concept.

 

The Forbes 30 Under 30 Europe list covers 10 categories – Arts, Entertainment, Finance, Industry, Media, Policy, Retail & Ecommerce, Science & Healthcare, Social Entrepreneurs and Technology – with each of the honorees vetted by a panel of expert judges in their respective fields.

 

Randall Lane, Editor of Forbes, said “Researching, vetting and launching Forbes’ second annual 30 Under 30 Europe list was an incredible task.  We scoured the continent to find the most talented millennials and, with the help of our expert judges, are proud to honor 300 of the most important young entrepreneurs, creative leaders and brightest stars in Europe right now.”

The criteria for honorees making the list included leadership and disruption in their field; entrepreneurial mindset and results; and the likelihood of changing their field over the next half-century.

 

The judges have created a unique list of the 300 prodigious stars who are making a difference in our world.  The judges were:

 

  • Arts: Jeremy Till of University of the Arts London, Chef Heinz Beck, and Italian photographer Oliviero Toscani;
  • Entertainment: Forbes editor Mike Ozanian, Afrojack, and British director SJ Clarkson;
  • Finance: Klaus Hommels of Lakestar, Henning Potstada of DWS, and Sonali De Rycker of Accel Ventures;
  • Industry: Phillip Greenish of Royal Academy, Stephane Israel of Arianespace, and former 30 Under 30 Honoree Cornel Amariei of Continental Automotive Systems;
  • Media: Kai Diekmann of Bild, Antonia Rados of RTL Group, and Max Guen of Magna Carta TV;
  • Policy: Josef Janning of European Council on Foreign Relations, Richard Youngs of Carnegie, Endowment Europe, and Brigid Laffan of European University Institute;
  • Retail: Amber Atherton of My Flash Trash and Dharmash Mistry of blow LTD;
  • Science: Barbara Prainsack of King’s College London, Jason Levine of IT and Clinical Informatics at National Cancer Institute, and Iain Woodhouse of University of Edinburgh;
  • Social Entrepreneurs: Forbes Editor Randall Lane, Cheryl Green from Echoing Green, and Jean Case from Case Foundation;
  • Tech: Brent Hoberman of Lastminute.com, former 30 Under 30 Honoree Ophelia Brown at Local Globe, and Tom Hulme of Google Ventures.

 

The complete list, along with video interviews with some of the honorees, is online at www.forbes.com/30under30europe.

 

Forbes’ Under 30 franchise is a global multichannel platform, that comprises 30 Under 30 lists featuring young global game changers published in print and online all over the world; live summits in the U.S., Asia and Israel; an Under 30 channel on Forbes.com; and a Forbes Under 30 app. To access Forbes magazine’s 2017 30 Under 30 U.S. list, please visit www.forbes.com/30under30.

 

 

For these stories and more, visit www.forbes.com

Follow Forbes on Twitter (www.twitter.com/Forbes)

 

 

How Does Patient Engagement Drive Value?

By | Collaboration, Global Healthcare Trends, Healthcare Innovation, Healthcare Value, Patient Engagement, Patient-Driven Healthcare, Patients, Volume-to-Value | No Comments

The 21st-century healthcare landscape is characterized by a consumer-driven, patient-centric model of care delivery, with patients, their caregivers, and advocacy groups playing a vital role in today’s healthcare ecosystem. Patients and their families are taking an active role in their healthcare and proactively interacting with providers and other healthcare stakeholders to improve health and wellness. Today’s patients are better informed and more financially invested than ever before, and they play a key role in decision-making processes that can positively impact health outcomes.

 

This paradigm shift has dramatic implications not only for patients – but also for providers, biopharma, and payers. As healthcare costs pressures continue to increase, incentives are shifting from a fee-for-service environment to a value-based healthcare system. More than ever, it is critical to understand how patient engagement drives value for patients, providers, biopharma, and payers, and ensure your organization is aligned to operate in the new healthcare economy.

 

The How Does Patient Engagement Drive Value? Healthcare Executive Roundtable on Thursday, 10/13/16 in Manhattan, NY, is an expert, cross-sectoral collaborative discussion designed to help healthcare stakeholders optimize engagement, communication, and collaboration. The exclusive, limited-attendance roundtable is designed to provide the top thought-leaders, visionaries, and executives from the patient advocate, provider, biopharma, and payer spaces with the latest insights and ideas on how patient engagement drives healthcare value for all stakeholders. The roundtable focuses on pragmatic and actionable ideas designed to empower you and your organization to understand the intersection of patient engagement and healthcare value. Additionally, the Healthcare Executive Roundtable helps healthcare stakeholders build open and collaborative relationships to positively impact healthcare delivery and outcomes.

 

We have a very limited number of registrations remaining. Please visit chisite.org/education/healthcare-executive-roundtable for more information. We invite you to join us for a day of thought-provoking discussion regarding patient engagement and healthcare value.

The Economist’s Healthcare Forum: War on Cancer

By | Global Healthcare Trends, Healthcare Innovation, Healthcare Value, Patients | No Comments

While advances in cancer treatment have come a long way, cancer remains among the leading causes of death worldwide. Though the promise of technology allowing for faster, more precise treatment and more collaborative health care models is inching us closer to victory, scaling the progress made thus far remains a critical next step.

 

On September 28th in Boston, editors of The Economist, experts and thought leaders from across the healthcare ecosystem will gather at the War on Cancer Forum to discuss and debate how innovation can be scaled across policy and financing, prevention, early detection, treatment and long-term management of this deadly disease. Don’t miss the opportunity to network with 200 of your peers and those making major progress in the war on cancer.

 

Some of our notable speakers participating in the event include:

  • Amy Abernethy, Chief medical officer and senior vice-president of oncology, Flatiron Health
  • Christina Åkerman, President, International Consortium For Health Outcomes Measurement (ICHOM)
  • Peter Bach, Director, Center for health policy and outcomes, Memorial Sloan Kettering
  • Roy Beveridge, Senior vice-president and chief medical officer, Humana
  • Amitabh Chandra, Director, health policy research, Harvard Kennedy School of Government
  • Sally Cowal, Former Ambassador, US Government and senior vice-president of global cancer control, American Cancer Society
  • Jason Efstathiou, Director, Genitourinary division, department of radiation oncology, Massachusetts General Hospital
  • Gilles Frydman, Co- founder, Smart Patients
  • Kathy Giusti, Founder, Multiple Myeloma Research Foundation
  • Kathleen Kaa, Global head of pricing and market access, Oncology, Roche
  • Kelvin Lee, Co-leader, tumor immunology and immunotherapy, Roswell Park Cancer Center
  • Greg Matthews, Managing Director, MDigital Life
  • Josh Ofman, Senior vice-president, global value, access and policy, Amgen
  • Kyu Rhee, Chief health officer, IBM
  • Lowell Schnipper, Chair, value in cancer task force, ASCO

Save 15% on the current available rate when you register with our special code: CHI15

How Do You Define and Measure Patient Experience?

By | Healthcare Quality, Healthcare Value, Patient Engagement, Patient-Driven Healthcare, Patients | No Comments

Happy senior citizen having a casual small talk with the friendly doctor

In today’s dynamic healthcare industry, with fundamental policy changes and ground-breaking technological advances occurring more than ever, it is vital to reevaluate the metrics used in determining the quality of care given to patients. Determining and measuring healthcare quality is a multi-faceted challenge, which must consider all aspects of care from patient treatment to administration and policy. The patient experience is among the core metrics used today, which is considered the sum of all interactions, shaped by an organization’s culture, that influence patient perceptions across the continuum of care.1 The continuum of care considers every step in the healthcare process from arrival to outcome. As trending healthcare values continuously place a heavier focus around patient-centricity in all aspects of care, accurately measuring the patient experience is increasingly vital. This begins with addressing value discrepancies between provider and patient perspectives, assessing limitations in traditional data gathering methods, and better understanding patient standards of evaluation. A higher level of patient experience has shown yield direct benefits in long-term recovery, compliance with recommended treatment, and many other care outcomes dependent on trust and acceptance from the patient.2

The patient experience is influenced heavily by the culture and policies set by the provider. Whether a county hospital or day clinic, the success of various patient-centric initiatives and, in turn, impact of the overall atmosphere determined by administrators contributes directly into how personnel view and interact with patients. Yet these are a reflection of the staff’s values, which are not necessarily aligned with the values of the patients they treat.3 Therefore, it is imperative to give proper consideration to patients’ perspectives. The healthcare industry’s recent policy changes reflect this ever-growing necessity by offering new reimbursement programs for providers based on metrics that evaluate the patient experience.4 Yet, policy changes at the top can take a long time to trickle down and to patients. By continuously working to understand the difference between the patient’s and provider’s perspective, and its value in relation to patient experience, all healthcare providers can begin to bridge the gap by providing a higher quality level of care that is focused on the patient’s needs.

Understanding the value of the patient’s perspective in the quality of healthcare is limited to the effectiveness of the means used to gather the data. The Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey stands as the current standard in gathering data on patient experience. However, the data gathered is greatly dependent upon the level of patient satisfaction; which, while important, does not consider all the elements of the continuum such as quality, safety, and service outcomes.5 This results in a skewed assessment of the current level of patient experience and leads to new initiatives and corrective actions that do not properly address the needs of the patient. To address this disconnect, providers are encouraged to create patient advisory councils that add power to the voice of the patients, adjust CAHPS analysis techniques to account for known limitations, and increase the frequency of leadership rounds that prompt patient interaction.6 These suggestions are based on current efforts that have been implemented based on patient-centricity and represent just a few of the countless possibilities.

Regardless of the accuracy of the data gathered, properly evaluating the level of the patient experience requires understanding what quality of care is to the patient. An extensive research initiative in 2014, led by the Patient Experience Journal, highlighted six key performance indicators patients used when assessing the quality of their care. These were the level of provider participation in care, staff courtesy, self-reported health status, staff follow-up, waiting, and medical explanations.7 Based on these findings, it is apparent that patients place a much higher value on interpersonal interaction than the provider. This is understandable considering the limited knowledge they often possess regarding healthcare services coupled with stress and anxiety that come with health issues. Given an a greater appreciation of these key performance indicators used by patients in evaluating their experience, researchers can better differentiate between patient experience and patient satisfaction while properly aligning efforts to reflect a more accurate picture of patient values.

As the healthcare industry continues to drastically evolve, the challenge of effectively keeping the focus on the patient has grown equally complex. Factors and metrics long since accepted as industry standards have come into question at the same time that industry innovation has created entire new directions to consider. Regardless, the patient experience remains as important as ever. It serves as an essential gauge of quality, that when properly managed, can have profound effects on long-term recovery, patient follow-through, and overall care success. CHI will be further exploring the issues and values associated with the patient experience and many other related topics at our upcoming Healthcare Executive Roundtable on October 15, 2015 in Manhattan. The Roundtable will discuss what patient-centric healthcare value means in the 21st century. This consumer-focused Roundtable Discussion brings the best and brightest healthcare leaders from around the globe together to share their ideas and expertise on the intersection of healthcare value and patient-centricity. Please visit chisite.org/education/healthcare-executive-roundtable for more information.

References

  1. The Beryl Institute. “Defining Patient Experience.” The Beryl Institute. 28 Sept. 2015.
  2. Beattie, Michelle, Douglas J. Murphy, and Iain Atherton. “Instruments to Measure Patient Experience of Healthcare Quality in Hospitals: A Systematic Review.” National Center for Biotechnology. US National Library of Medicine National Institutes of Health, 23 July 2015. Web. 28 Sept. 2015.
  3. Brown, Claire R. “Where are the Patients in the Quality of Health Care?” International Journal for Quality in Health Care3 (2007): 125-26. Oxford University Press. Web. 28 Sept. 2015.
  4. “Consumer Assessment of Healthcare Providers & Systems (CAHPS).” Centers for Medicare & Medicaid Services. 8 June 2015. Web. 28 Sept. 2015.
  5. Wolf, Jason A. “Patient Experience, Satisfaction Not One and the Same.” Hospital Impact. 24 July 2014. Web. 28 Sept. 2015.
  6. Merlino, James I., and Ananth Raman. “Understanding the Drivers of the Patient Experience.” Harvard Business Review. 17 Sept. 2013. Web. 28 Sept. 2015.
  7. Van De Ven, Andrew H. “What Matters Most to Patients? Participative Provider Care and Staff Courtesy.” Patient Experience Journal1 (2014): 131-39. Print.