Redefining Value in the Healthcare Industry
By: John Doyle, DrPH, MPH | January 27, 2014
The growing emphasis in healthcare on economic value is not just impacting how biopharma prices and commercializes its products. It’s impacting their entire discovery and development process.
In the past, if biopharma’s brought a treatment to market treatment that promised even incremental improvements over existing competitors, it won the value seal of approval. But today, that’s barely the first step.
To be successful in this economy, treatments have to deliver the value triple aim – improve population outcomes and enhance patient quality of life while also lowering healthcare costs. And that triple aim must be fortified with verifiable proof of each component of that value proposition. Drug developers who want to thrive in a value-based healthcare system have to be ready to prove all three of these components and broadcast them to an increasingly skeptical market.
In our new report, Value is the Target , we explore the changing definition of value in the healthcare economy, and how stakeholders are struggling to evolve their perceptions and processes to accommodate this new value proposition.
The problem? Healthcare stakeholders can’t agree on how to define, measure, and communicate about value, and that they don’t trust each other to deliver the value that they seek. This lack of cohesion makes it harder to implement efficiencies, and deliver promising new treatment options that will be successful in this marketplace.
Our survey also shows:
To overcome these obstacles, stakeholders from every area of the healthcare community have to find a way to agree on a definition of value and how that value concept will be measured. Then biopharma needs to apply these value terms to their R&D process, using them as a benchmark to determine which treatment options to pursue, and whether the efficacy and quality of new products is accurately balanced against its cost and risk.
It will be a arduous transition as it goes against the industry’s long held system of siloed decision-making, but building a truly integrated infrastructure will be worth it if biopharma is to successfully solve for optimizing healthcare system value.