Research published in the Journal of the American Medical Association (JAMA) recently confirmed our worst fears: U.S. health spending is twice as high as in other affluent countries, but we face the lowest life expectancy and the highest infant mortality rates among peer countries. On the positive side, some of the most cutting-edge research is conducted here, and our hospitals lead the way in setting the global standard for best practice. So how come there’s such a huge gap between what healthcare could be and the results it actually delivers to us?
It’s drug prices!” “It’s opioids!” “It’s DTC commercials!” “It’s red tape!” “It’s insurances!” “It’s PBMs!” “It’s doctors’ and nurses’ pay!” “It’s understaffing!” “It’s government!”
It seems like every stakeholder has a short and simple explanation at the ready for what’s broken about healthcare. Fortunately, the focus has started to shift from finger pointing to finding real solutions thanks to an understanding that while we used to encourage volume, we meant to encourage value. The goal should never have been to perform this many procedures, to prescribe that many pills, or to keep x amount of patients admitted in a hospital bed.
Instead, the goal should have been to treat health conditions following the best protocols science has discovered, to improve quality of life, and to prolong life and cure diseases where possible. By starting to focus on value instead of volume, the healthcare industry has finally embarked on a path towards sustainability. The utopian vision is for society as a whole to be able to directly address two essentially ethical questions: “What do we want our health and care to be,” and “How much are we prepared to spend on it?” Right now, the only available answers are: “Whatever we can get” and “at any cost.”
“Cooking what guests like to eat”
The shift from volume to value has already seen some spectacular changes in how the reimbursement economics are set up: In some disease categories, first-line treatments have moved from lifelong drug treatments to preventative vaccines or to one-off or temporary treatment regimens resulting in a cure. Unquestionably, from a treatment perspective such medical innovation provides great advantages to the patient community.
Economically, however, these drugs must be a lot more costly per unit because less quantity will be sold, while innovation still has to be reimbursed and incentivized. So some plans have come up with “warranty” or “money back” schemes, in which the manufacturer only gets to keep the whole drug price if the treatment remains effective after a pre-defined amount of time. Such arrangements have been maligned by industry critics who simply cannot grasp how a “million-dollar drug” can be an economically sound concept. The truth is, if it creates the expected value, it’s not just economically valid but patient-friendly best practice.
What are the implications of the new value-based reimbursement models on biopharma marketing? One of my favorite definitions of marketing is “to cook what guests like to eat.” In other words: It all comes down to what the patient community’s real needs and desires are—it’s not about what we want to sell or what HCPs like to prescribe.
When value for the patient is truly our focus, we innovate in wholly new ways: We stop to compulsively look for new apps and tech gadgets to throw at our audience and instead start to listen. Where does the shoe pinch the most? In what way can our product and our services help get the most pressing needs addressed? Value-based healthcare economics can incentivize us to be more—yes, I’ll say it—patient centric.
The Beauty of Direct Interaction
This, of course, only works if we know what the patients want. Surveys as part of the traditional marketing toolbox are an excellent source of information, but sometimes, the gap between what we’re asking and what actually bugs the respondents is significant. That’s why there’s no substitute for getting up from behind our desks and actually meeting and talking to patients and caregivers. The beauty of direct interaction with patients is that it’s two-way. We learn what we need to do in order to “cook what they like to eat.” And we get a chance to explain why the “million-dollar drug” is not necessarily a sign of broken healthcare, but potentially a patient-friendly, cost saving innovation.
I am hopeful that value-based healthcare will help address a lot of what’s broken in healthcare. It’s hard to imagine that we would be facing the current opioid crisis if manufacturers and prescribers were incentivized to maximize value rather than volume. Will the value-based economy be rolled out to all of healthcare? Maybe. The way policy is moving, it may also remain just a partial shift for a while.
What will most definitely continue is the growing importance of the patient voice in pharma marketing. Economic changes notwithstanding, social forces such as the internet and the departure from these paternalistic doctor-patient relationships will propel the patient more and more firmly into the driver seat. And the value revolution stands to reinforce this trend.