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Healthcare Value and Patient Engagement

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As of 2015, healthcare spending in the U.S. reached approximately $3.2 trillion dollars, or $10,000 dollars per person. (1.) Despite high amounts of spending, Americans have seen a decline in life expectancy by one-tenth of a year.  (2.) According to a publication in 2013 by The Common Wealth Fund, Americans had fewer physician visits with 4 per year compared to 6.5 visits for other countries in The Organization for Economic Cooperation and Development. (3.) With the rising cost and poor quality of healthcare, it is critical to analyze the intersection between healthcare value and patient engagement. (4.)

How do we define “value” in health care? The definition for this term can range from improved patient outcomes to coordination of care to patient-centeredness. (5.) However, value-based care is generally defined as safe, appropriate, and effective care at a reasonable cost. It is very important to carefully define value as we move towards value-based care. This allows customers to fully understand the type of care they are receiving. Furthermore, value-based care has emerged as a solution to address rising health care costs. This is a change from the traditional fee-for-service approach where doctors and hospitals are paid for based on the number of health care services they deliver. (6.)

What this entails for hospitals and physicians is more accountability on their part for the well-being of their patients. For example, according to the Harvard Business Review, value-based care will be about costs and patient outcomes like quicker recoveries, fewer readmissions, lower infection rates, and fewer medical errors. (7.) In addition, as we move towards this newer model, we also see an abundance of data that can be tabulated and analyzed to ensure better health outcomes for patients. (8.) If value-based care is to succeed, the need for better patient engagement becomes a key component to that success.

Patient engagement is a set of strategies that are created to keep patients connected and engaged in their own care. Today, this is facilitated through the use of healthcare technology. For example, patients can use patient portals to directly message their provider regarding any questions they have regarding their health. (9.) In addition, people have been using mobile applications on their smartphones to keep track of their health. Ultimately, they can decide whether it is appropriate to visit a doctor based on the information they have in their pocket. (10.) This trend also focuses on preventive measures since this allows patients and providers to be in direct contact.

What patient engagement ultimately allows is for patients to take charge of their health through the use of innovative methods that have become available through technology. It allows patients to avoid spending a lot of money on doctor visits that only require simple checkups. It plays a critical role in lowering the cost of healthcare for patients and ensures better quality of care. (11.) Healthcare value and patient engagement now go hand in hand because both are innovative ideas that are meant to disrupt an industry where traditional thinking triumphs. In today’s society, the need for change is only becoming inevitable.

As a new administration takes charge, the future of our healthcare system has never been so unclear. It will be interesting to see if this value-based approach can reach new heights under the new administration. As leaders in this sector await change, one can only hope that it is the change that we have long desired. It is important for healthcare leaders to advocate for an inclusive and efficient healthcare system. In the end, if we are to succeed, collaboration on both ends of the spectrum is required.  

 

Works Cited

1.) National Health Expenditures 2015 Highlights. Centers for Medicare and Medicaid Services. https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/highlights.pdf. Accessed January 25, 2017.

2.) Bernstein L. U.S. Life expectancy declines for the first time since 1993. Washington Post. December 8, 2016. https://www.washingtonpost.com/national/health-science/us-life-expectancy-declines-for-the-first-time-since-1993/2016/12/07/7dcdc7b4-bc93-11e6-91ee-1adddfe36cbe_story.html. Accessed January 25, 2017.

3.) Squires D. U.S. Health care from a global perspective. The Common Wealth Fund. http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective. Accessed January 25, 2017.

4.) Claxton G. Measuring the quality of healthcare in the U.S. Peterson-Kaiser Health System Tracker. http://www.healthsystemtracker.org/insight/measuring-the-quality-of-healthcare-in-the-u-s/. Accessed January 25, 2017.

5.) Blumenthal D. Getting real about health care value. Harvard Business Review. https://hbr.org/2013/09/getting-real-about-health-care-value. Accessed January 25, 2017.

6.) Belliveau J. What is value-based care, what it means for providers? Rev Cycle Intelligince. http://revcycleintelligence.com/features/what-is-value-based-care-what-it-means-for-providers. Accessed January 25, 2017.

7.) Cosgrove T. Value-based health care is inevitable and that’s good. Harvard Business Review. https://hbr.org/2013/09/value-based-health-care-is-inevitable-and-thats-good. Accessed January 25, 2017.

8.) Porter M. The strategy that will fix health care. Harvard Business Review. https://hbr.org/2013/10/the-strategy-that-will-fix-health-care. Accessed January 25, 2017.

9.) Heath S. How do patient engagement strategies cut healthcare costs? Patient EngagementHIT. http://patientengagementhit.com/news/how-do-patient-engagement-strategies-cut-healthcare-costs. Accessed January 25, 2017.

10.) Key facts about the uninsured population. http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/. Accessed January 25, 2017.

11.) Barnett J. United States Census Bureau. http://www.census.gov/library/publications/2016/demo/p60-257.html. Accessed January 25, 2017.

 

The Economist Explores: Why Has Cancer Not Been Cured?

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In a recent article by The Economist, a simple question was asked: Why has cancer not been cured? Despite a forty year war against the disease, that questions has no simple answer. Research has taught us that more than a mutation of genes, cancer is a disease of specific organs. New therapies are increasingly providing personalized solutions to harness the body’s own immune system in fighting cancer, but more still needs to be understood about the molecular mechanisms that drive it.

On September 28th in Boston at the War on Cancer conference, editors of The Economist will gather more than 200 global health-care players, including Flatiron Health, Memorial Sloan Kettering, IBM, MD Anderson Cancer Center and others to discuss the technological advancements improving our ability to fight cancer and expand access to targeted, quality cancer care.

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
  • Amitabh Chandra, Director, health policy research, Harvard Kennedy School of Government
  • Kathleen Kaa, Global head of pricing and market access, Oncology, Roche
  • Kyu Rhee, Chief health officer, IBM

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

Patient-Focused Healthcare Trends

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A little girl at the doctors office sitting on the examining table with a doctor checking her heartbeat with a stethascope with a nurse in the background.

The patient-centric era of healthcare is not only possible – it’s happening now, as the landscape shifts towards a consumer-driven model of care delivery.  Recent examples are abound.

For instance, Novant Health, a leading healthcare provider with 15 hospitals and more than 350 physician practices, started an electronic medical records project called Dimensions in July 2011.  Later in May 2013, Novant began providing email visits and video visits with patients via MyChart, an electronic health records portal for nonemergency health issues.(1) Patients can interface with their physicians through computers and mobile devices.  This program substantially increased the efficiency and quality of healthcare.  Patients without emergency situations no longer needed to wait for appointments and pay high bills for treatments and medications. The integration of digital technologies is a breakthrough that enhances patients’ experiences.

In another case, Wake Forest Baptist also started to offer video visits in May for its 25,000 employees and their families.  Dr. Richard W. Lord, Wake Forest Baptist’s chairman of Family and Community Medicine, states, “There are a limit number of things that are allowed to be done through some of these platforms for video visits. So we wanted to go ahead and get that out and get it started so we could understand the demand for these types of video visits”(2).  These e-visits are redefining the patient-provider interface by reducing overall costs that are passed on to patients, and thus maximizing overall healthcare value for patients.

Additionally, the pharmaceutical industry is also starting to shift its marketing strategy from products to patients. Today’s increasingly well-informed patients are more involved in the processes of selecting and switching therapies.  This paradigm shift drives industry to increasingly focus on patients.  Marketers have already learned that it is essential to educate, communicate, and engage patients throughout their experiences with a disease. (3) They not only need to provide the highest quality of healthcare products for patients, but they also must focus on enhancing patients’ experience with their products throughout the entire therapeutic process.

To make medical research more patient-centric, top journals such as British Medical Journal, Research Engagement and Involvement, and Journal of Participatory Medicine recently introduced patient reviewers.  This trend gives patients a platform and opportunity to speak about their experiences. Patient involvement in all aspects of healthcare is to be welcomed, and patient perspective can play a much larger role in the development of future healthcare product and services.(4)

These are just a few of the many examples of the trend toward focusing on patient experiences and maximizing healthcare value for patients. CHI’s Healthcare Executive Roundtable will further 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. http://www.journalnow.com/business/business_news/local/local-healthcare-providers-offer-video-doctor-visits/article_b64176f1-f67f-5849-a546-832149a39080.html
  2. http://www.journalnow.com/business/business_news/local/local-healthcare-providers-offer-video-doctor-visits/article_b64176f1-f67f-5849-a546-832149a39080.html
  3. http://www.prnewswire.com/news-releases/consumers-forcing-pharmaceutical-industry-to-shift-its-marketing-focus-from-products-to-patients-300122018.html
  4. http://timesofindia.indiatimes.com/india/Patients-can-contribute-to-medical-studies-now/articleshow/48536349.cms

ACOs and the Affordable Care Act

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The transition period from any old, familiar system to a new one is difficult. Providers, pharma, patients, payers, and policymakers on all sides of the healthcare industry have encountered hurdles originating from the transition from the old and inefficient healthcare system to the new system born from the Affordable Care Act (ACA). Accountable Care Organizations (ACOs) were designed for healthcare organizations and providers that are already experienced in coordinating care for patients across care settings(1) and to help these providers transition from the past fee-for-service model to the new value-based healthcare model.

The ACA aims to provide healthcare for the U.S. population through expansion of public and private insurance coverage, coverage mandates, subsidies, and creation of insurance exchanges(2). But, in order to do so, the American healthcare system must transition from the fee-for-service model to the value-based model. The fee-for-service-model is an approach to healthcare in which providers are paid for each service (i.e. an office visit, test, or procedure)(3), whereas the value-based model is an approach in which a portion of the provider’s (i.e. hospitals, providers etc.) potential payment is tied to a provider’s performance on cost-efficiency and quality performance measures. While providers may still be paid fee-for-service for a portion of their payments, they may also be paid a bonus or have payments withheld. For value-based contracts, this bonus is not paid unless the provider meets cost efficiency and/or quality targets(4). The new model is now more patient-centric and the previous implicit and explicit costs, which previously fell on the patients, now fall on the providers of healthcare.

The implicit price, or the non-financial costs of transitioning, a challenge facing the ACA, is derived from incentives. Prior to the ACA legislation, the private insurance market allowed patients, providers, and payers to select the best fit for one another. This was a major component of the fee-for service-model. Patients had the incentive to stay healthy, so they did not have to pay money to the providers for treatment (this excludes the cost of medication, etc.). Providers had the incentive to treat as many patients as possible and order more tests to boost their incomes.

However, with the new value-based model, the incentives are shifted. Under the new value-based model, providers have the incentive to keep patients healthier. In fact, providers would prefer to treat only the healthy patients as providers are reimbursed with a set amount. This set amount comes from the ACOs, per patient, based on the old fee-for-service basis(5). Thus, providers want to treat healthy patients to maximize their revenues. Alternatively, the more patients a hospital or member of an ACO treats, the more the entity can counterbalance its revenue loss. Likewise, there is power that comes from belonging to an ACO: The ACO can earn extra revenue through gain sharing, sharing of savings resulting from collaborative efforts to provide care cost-effectively, with Medicare if the overall costs of care for the beneficiaries attributed to it are lower than predicted. This only applies if the ACO also meets stringent conditions of governance (clinicians, not insurers, run them), transparency, and quality performance.(6)

But, much like privatization, this leads to the problem of most providers not wanting to take on the costs of caring for the unhealthy portion of the population. The government purposely created ACOs to address such problems with the ACA. This is why ACOs are a necessary tool to help transition from the old to new model to counterbalance this incentive side-effect.

ACOs are groups of medical providers (i.e. physicians, hospitals, insurance companies) that accept payments based on quality under the Medicare Shared Savings Program (MSSP).(7) They were created in part by the ACA to aid hospitals and providers in providing value-based healthcare treatment. If providers do not spend all the money of the allotted subsidiary, then they are permitted to keep that extra revenue. However, if not, then the ACOs can owe money to Medicare.

Another reason why ACOs are crucial to a smooth transition from the new to old models results from the payment models, which cannot be separated from changes in care delivery. They require increasingly tight hospital-physician alignment, which can be achieved through physician employment, entering into service line co-management arrangements, clinical integration, or other methods. Thus, to operate effectively, there must be better communication and fewer occurrences of asymmetrical information under the value-based model in order to provide the best quality of healthcare possible throughout the transition.

Although hospitals are required to keep track of the number of patients treated for certain physical ailments under the ACA, all hospitals participating in ACOs are required to supply additional metrics to improve clarity. For example, the ACA will require Medicare ACOs to report 33 different quality metrics.(8) This, along with other incentives to keep better track of patient records and become more organized, helps improve clarity and transparency of the healthcare system.(9) Hospitals will have to become very efficient and become very familiar with their cost structure in order to reduce costs as the losses have now shifted from the patient to the ACO infrastructure. With this clarity, it will be easier for consumers, producers, and the government to track changes, learn from mistakes, correct tweaks, and smooth the transition from the past model to the value-based model.

In the end, there appears to be both pros and cons to ACOs as a method of helping the providers, pharma, patients, payers, and policymakers transition from one model to another. With proper implementation, time, and further research, the Affordable Care Act will be improved so it can improve the quality of healthcare for all Americans.

However, a new problem with ACOs has not been addressed yet: How will this affect the patient-centric value-based model? The Center for Healthcare Innovation’s Healthcare Executive Roundtable on October 15, 2015 will address new questions in this uncertain transition period. 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 http://www.chisite.org/events/healthcareValueRoundtable for more information.

References

  1. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26.html
  2.  https://en.wikipedia.org/wiki/Accountable_care_organization#In_the_Affordable_Care_Act
  3. http://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/fee-for-service.html
  4. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB0QFjAAahUKEwienIGUuvzHAhVMEZIKHXyvBes&url=http%3A%2F%2Fconsultant.uhc.com%2Fassets%2Fvbc_overview_flier.pdf&usg=AFQjCNEN-MYB3U7OdqU8OSch5T5HZXZNYg&bvm=bv.102829193,d.aWw&cad=rja
  5. https://www.healthcatalyst.com/hospital-transitioning-fee-for-service-value-based-reimbursements
  6. http://www.fiercehealthcare.com/story/will-acos-show-financial-returns/2012-01-23
  7. http://www.hhs.gov/news/press/2014pres/09/20140916a.html
  8. http://www.wsj.com/articles/SB10001424052970204720204577128901714576054
  9. http://www.wsj.com/articles/SB10001424052970204720204577128901714576054

Complications in International Drug Pricing

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Drug pricing in the United States is a complicated issue that has recently been the focus of healthcare legislation and oft contention between pharma, providers, and patients. Major sticking points for the consumer are typically the most visible: lower comparative prices internationally, high priced drugs for high-profile indications like cancer, and the perception of large yearly pharma and biotech revenues. One such example is the coverage of drugs for orphan diseases that have skyrocketed, in some cases reaching over $250K for a single treatment.  While these may be off-putting at first glance, there are many social and economic factors that play into the cost of, what may seem to be, unnecessarily high drug pricing. Here, I seek to identify several of the contributing factors to drug pricing and address concerns relating to lower comparative prices overseas.

A major reason for the costing complexities is the overwhelming fact that the drug industry in the United States is simply complicated. In terms of competitive market economics, the consumer and producer of an entity will traditionally set the supply and demand curves. However, in the drug market, payers and government regulation are thrown into the mix and will act to modulate and complicate market pricing. There are other such considerations that affect pricing, such as the amount of money that pharma companies pour into research and development, money spent on clinical trials and the approval process, and costs associated with infrastructure.

That said, many Americans point to international drug prices being cheaper – most notably in Canada and Mexico – as a reason for high relative healthcare spending. Current estimates suggest that roughly 1 to 10 million Americans have purchased drugs from Canada alone. Access to Canadian pharmacies via the internet has likely increased and helped to keep them relevant in the American healthcare dialogue. Further, in the years since 2004, Americans have also turned to purchasing relatively cheap prescription drugs from other countries such as Thailand and India, despite increased risks of these drugs being counterfeit.  It is interesting to note that while Canadians do generally have cheaper brand name drugs, the prices of their generic medications typically run higher than other countries.

A major reason why drugs are cheaper internationally is due to government intervention either setting price caps or negotiating prices with manufacturers. Typically the government only intervenes when they sense that competition within a market does not exist, or they suspect price gouging by participants in the market. Further, government participation within a market, especially as complex as the Pharma industry, would only serve to complicate issues further, as was seen in the Netherlands when generic manufacturers were actually incentivized to increase prices to meet the reimbursement limit rather than letting the competitive market dictate prices. To this extent, Canadian prices are artificially cheaper due to a compulsory licensing period when generics were actually encouraged, contributing to their relatively higher price today.

A very public manifestation of the rising cost of pharmaceuticals in the U.S. is the lower relative cost in other countries. While this is generally true, there are many factors that play into an already very complicated industry, complicated pricing system, and complicated approval processes. Another major factor is government intervention setting price caps or negotiating prices. The discussion of drug pricing is far too extensive for a short blog post, however, I wanted to point out the fact that simple benchmarks between American and foreign drug prices cannot necessarily be drawn. In such a complicated global industry, it is necessary to identify all of the things that go into drug pricing. In future posts, I will continue to look at drug pricing in the United States and identify, among other things, high orphan drug costs and seemingly ever-increasing drug company revenues. For further CHI Research on costing issues, see: http://www.chisite.org/research/costIssuesofNewInterventionsonHepatitisC

References

  1. Bhosle, M., & Balkrishnan, R. “Drug Reimportation Practices in the United States.” Ther Clin Risk Manag. 2007 Mar; 3(1): 41–46. http://www.cmaj.ca/content/170/6/945.full?etoc
  2. Schoonveld, Ed. The Price of Global Health. Burlington: Gower Publishing Company, 2015. Accessed: books.google.com

CHI Leads 3rd Annual Understanding Value in a Consumer-Oriented, Patient-Centric Era Roundtable

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The Center for Healthcare Innovation (CHI) is organizing our 3rd annual healthcare executive roundtable.  This year’s roundtable, entitled Understanding Value in a Consumer-Oriented, Patient-Centric Era, will take place on Thursday, October 15th, 2015 at 1:00PM EST in New York, NY, USA.

The healthcare executive roundtable an exclusive, intimate discussion that brings together the top thought-leaders, visionaries, and executives from the patient advocate, provider, payer, pharma, and pharmacy sectors to discuss and increase understanding of what patient-centric healthcare value means in the 21st century.  The healthcare landscape has rapidly shifted towards a consumer, patient-centric model of care delivery.  Today’s patients have become more empowered in their health and well-being, better informed, and more financially invested than ever before.  This paradigm shift has had dramatic implications not only for patients, but also for providers, pharma, and payers, as these latter groups attempt to define and deliver patient-centric healthcare value.  Furthermore, the roundtable explores the relationship between the definition of value and quality, access, and cost issues.  As healthcare costs continue to rise, capitation payment models become the new norm, and incentives shift as a result of moving to a value-based healthcare system, understanding and integrating patient-centricity into healthcare value will become more important than ever.  This consumer-focused discussion brings together the best and brightest healthcare leaders from around the globe to share their ideas and expertise on the intersection of healthcare value and patient-centricity.

Past years’ roundtables have featured executives from: Aetna, AstraZeneca, Bristol-Myers Squibb, Columbia University, GE Healthcare, Genzyme, Humana, inVentiv Health Clinical, Johnson & Johnson, Kaiser Permanente, Merck, Metropolitan Chicago Healthcare Council, Navigant Consulting, New York City Health & Hospitals Corporation, Novartis, NYU Medical Center, Otsuka, Owens & Minor, Pall Life Sciences, Pfizer, Princeton University, Quest Diagnostics, Stanford, TEDMED, Teva Pharmaceuticals, and the University of Pittsburgh Medical Center.

Please visit http://www.chisite.org/ for more information.

Video Recap of Diversity Symposium now Available

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The video recap of CHI’s 5th annual Diversity, Inclusion, & Life Sciences Symposium is now available at https://www.youtube.com/watch?v=6JgrJmOOSjA

The symposium is the world’s leading forum focused specifically on diversity, inclusion, healthcare, and the life sciences. It is an interactive and collaborative discussion for life science and healthcare executives, professionals, patient advocates, entrepreneurs, policymakers, researchers, scientists, technologists, and academics to discuss best practices, challenges, and opportunities of topics such as: Understanding Obstacles to Clinical Trials & Healthcare for Underrepresented Populations, Leveraging Employee Resource Groups (ERGs) for Success, and How to Recruit & Develop a Diverse, Talented Workforce. Attendees will gain valuable knowledge, information, and insights, as well as meet new colleagues and connections.

Just some of the organizations represented included: AbbVie, American Diabetes Association, American Medical Association, Astellas, Baxter, BlackDoctor.org, Dell, DePaul University, GE Healthcare, Genentech, Genzyme, GSK, Hospira, inVentiv Health Clinical, Lundbeck, Lurie Cancer Center, MCHC, Northwestern University, Novartis, Pfizer, Quest Diagnostics, Sanofi, Takeda, and the University of Chicago Medical Center.  The symposium was sponsored by Sanofi, Takeda, the Lurie Cancer Center of Northwestern University, and the Clinical Research Exchange. The symposium is hosted by the Chicago offices of Seyfarth Shaw.

Next year’s symposium will be Wednesday, June 8th, 2016.  For more information, please visit lifesciencesdiversity.org.

Unintended Consequences of Healthcare & Life Sciences Legislation

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Unintended consequences are the unanticipated and unforeseen outcomes from government action that are not the outcomes intended by the executive and legislative branches. There are three basic categories: (i) a positive, unexpected benefit, (ii) a negative, unexpected detriment, and (iii) a perverse effect substantially contrary to the original purpose of the law or regulation. Examples in healthcare and life sciences include the Orphan Drug Act of 1983 and the emergence of mini-med healthcare plans (total coverage capped at very low amounts). There are likely to be a wide array of unintended consequences resulting from the Affordable Care Act and other legislation in the U.S. and around the world.

In addition to any positive or negative unintended consequences of current or future legislation, the U.S. healthcare system will be faced with a series of dramatic changes unlike anything we’ve seen before.  Patients are more informed, engaged, and financially invested in their healthcare than ever before.  And as a result, provider and biopharma organizations are following patients’ lead and recalibrating themselves as patient-centric, consumer driven organizations.  Moreover, healthcare costs are rising at unsustainable rates.  As these major trends drive healthcare change, there will be a new emphasis on maximizing healthcare value, with a particular emphasis on improving quality, increasing access, and reducing costs.

CHI recently published an executive summary and research report on the Center for Healthcare Innovation’s 2nd annual Unintended Consequences of Healthcare & Life Sciences Legislation Symposium, which took place in Washington, DC on October 15, 2014.  This non-partisan symposium featured some of the world’s leading healthcare, life science, and government experts coming together in a collaborative setting to discuss the most pressing legislation   issues facing the healthcare and life sciences industries in the 21st century.  The executive summary can be found at http://chisite.org/research/2014unintendedConsequencesSymposiumExecutiveSummary

This executive summary captures and examines some of the insights, ideas, best practices, and new perspectives from the Symposium and the broader healthcare legislation discussion. It is meant to serve as a summary and a resource of the innovative ideas and insights regarding legislation for healthcare and the life sciences. We hope that you find it to be both thought-provoking and useful, and we welcome your feedback. We thank you for your interest, and hope this can be an asset for you and your organization.

The Value of Sovaldi: Societal Cost Issues of New Interventions on Hepatitis C

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In December 2013, the FDA approved a new drug, sofosbuvir, for the treatment of Chronic Hepatitis C. The drug, commonly known as Sovaldi, was developed by Gilead Sciences, a U.S. biotechnology company. The initial price tag of a 12-week treatment of Sovaldi was reported as approximately $84,000, or nearly $1,000 per pill. This resulted in considerable media attention and an ensuing pricing controversy. Editorials and op-eds sprung up around the country debating Sovaldi’s price tag and the broader debate over fair drug pricing. Some politicians expressed outrage over the cost of new drugs, while others argued for free market pricing and rewards for the considerable R&D costs that biopharmaceutical companies incur when bringing a new drug to market. The often niche drug pricing debate had officially spilled over into the mainstream conversation. Payers, policymakers, pharma, patients, and providers all voiced strong— and sometimes contrasting— opinions.

At CHI, we aim to help these stakeholders increase their knowledge and understanding of healthcare value, which we view as a function of quality, access, and cost. Thus, we decided to further explore the value of Sovaldi and how the costs and benefits of the drug relate to the broader discussion of the treatment of Hepatitis C. Our goal is to offer a more informed and analytical approach to the discussion of the value of Sovaldi. One question that immediately arose was “How does the price of Sovaldi compare to the long term costs of the treatment of Chronic Hepatitis C?” Our goal was to analyze the complex interrelationships and broader macroeconomic principles relating to the costs and benefits of a drug, as well as the long term costs of treating Chronic Hepatitis C.  The White Paper, The Value of Sovaldi: Societal Cost Issues of New Interventions on Hepatitis C, can be found here

By analyzing the societal cost implications of Chronic Hepatitis C, we aim to help patients, providers, pharma, pharmacy, payers, and policymakers increase their knowledge and understanding of the value of this treatment—as well as the complex relationships between drug costs and the longer term costs of a disease. We hope that you find this white paper to be both thought-provoking and useful, and we welcome your feedback. We thank you for your interest, and we hope you enjoy our comprehensive analysis.

Preventive Medicine: Controlling the Nation’s Healthcare Cost Epidemic

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As defined by the American College of Preventive Medicine, preventive medicine focuses on the health of individuals, communities, and defined populations. The overarching goal of preventive medicine is to protect, promote, and maintain our health and well-being and to prevent disease, disability, and death. It is important to take these measures to ensure our nation is utilizing all available resources to promote preventive medicine because healthcare costs are continuing to rise to unsustainable numbers, and future projections are only getting worse.

As U.S. citizens, we may believe the value of the U.S. healthcare infrastructure is second to none. However, Larry Merlo, President and CEO of CVS Health, believes otherwise. In a recent article, Merlo states that the U.S. is still in the infant stages of implementing the necessary healthcare changes and innovations that will significantly reduce these seemingly endless healthcare costs (Winston-Salem Journal, February 2015). Although the healthcare industry has been moving in the right direction and has some great achievements in healthcare over the last few years, consumers and employers alike continue to find themselves tangled in a “cost-quality-access conundrum”.

So, what is it that makes up this seemingly never-ending conundrum? Merlo says that over $300 billion dollars are spent on avoidable and unnecessary health-care expenses every year (Winston-Salem Journal, February 2015). In addition to the recent cessation of cigarette sales at CVS stores, Merlo believes that in order to start reducing these unsustainably high costs, health organizations must implement “whole-body” evaluations. These are an effort to reduce people’s time in their doctor’s office, as well as their money spent.

Although there will always be analysts reporting the exact dollar amount of money saved (or lost) in regards to the healthcare and preventive medicine, one thing is for certain, when consumers commit to taking control and responsibility of their healthcare, the U.S. can make significant strides towards improvements in healthcare innovations. Not only will they save themselves time and money, they will be keep themselves as healthy as possible.

Additionally, preventive medicine has implications for not-only patients, but also the other healthcare stakeholders – including payers, pharma, and policymakers. And other trends such as capitation payment models, informed and empowered patients, the proliferation of ACOs, and consumer driven healthcare all have dramatic implications and are driving the shift from a fee-for-service to a value-based healthcare model. This paradigm shift will fundamentally change the way we view healthcare value, including quality, access, and costs. Please check back for more blog posts, as CHI will be exploring healthcare value in more depth in the coming months.


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