Innovative contracts can help bring more value to patients and the health care system. These types of payment arrangements can include:
- Value-based contracts: Determine payment for health care services based on patient, clinical, cost or other outcomes and include results-based contracts.
- Alternative financing arrangements: Allow for a more flexible approach to payment, including pay-over-time or subscription models.
A recent report from Humana looked at value-based contracts between payers and physicians and found that while patients with physicians who were paid based on outcomes filled 38% more prescriptions per month, they also paid less out-of-pocket per month than those treated by a physician paid based on volume.
These findings may be due to better adherence to medicines. Physicians who received payment based on patient outcomes saw their patients more frequently and were able to help them successfully manage chronic conditions using maintenance medicines, which tend to be less expensive. These patients were able to better manage diseases like diabetes, chronic obstructive pulmonary disease and rheumatoid arthritis because they were better able to adhere to their routine treatments.
This is further evidence that value-driven health care can increase care coordination among health care providers, help lower out-of-pocket costs, improve patient outcomes and reduce overall health care costs. Innovative contracts may also be a tool to help states address prevalent health disparities, especially in the Medicaid program.
Currently, innovative contracts are happening across the health care system, including nearly 100 announced between biopharmaceutical companies and payers.
These types of payment models are essential for building a more resilient, affordable and equitable health care system. The publicly announced contracts include treatments for diabetes, cancer and rheumatoid arthritis.
We need to evolve our payment systems to keep up with the science by advancing policy solutions that will expand the ability to use innovative approaches to payment and reimbursement. That way, we can bring this new era of medicine to patients and their families.
Learn more about innovative contracts here.
Katie Koziara
Katie Koziara is Senior Director of public affairs at PhRMA focusing on the organization’s executive visibility work and media relations strategy. She previously ran the social media strategy for a D.C.-based non-profit working on federal management and leadership issues. Katie earned her B.A. in Public Policy from the University of Michigan’s Ford School and is currently earning her M.A. in Fiction Writing from Johns Hopkins University.
Katie Koziara
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