Three Areas Payers Are Redefining Following COVID

The pandemic has altered every facet of our healthcare system, so the payer landscape is not likely to be any different. For Nicole Cottrill, Senior Partner, Health Provider Services Group Head, Finn Partners, the changes we will likely see over the next few months boil down to three things: value, technology, and collaboration.

“The COVID-19 pandemic really underscored the value of value,” Cottrill explains. “Data has shown that providers engaged in value-based contracts fared a lot better last year financially than those who were not. Value-based agreements are likely to get more creative and complex and focused on addressing issues such as equity and social determinants of health.”

While the concept of value-based agreements has been discussed in the industry for a few years, implementation of these types of contracts has been slow. Currently, the vast majority of U.S. payers still use traditional techniques for managing novel treatments like cell and gene therapies—only about 28% of payers report using a value-based model, according to a survey of payers in Xcenda’s Managed Care Network. However, Ana Stojanovska, VP of Commercial Consulting at Xcenda (a part of AmerisourceBergen), believes that will change soon.

“An influx of cell and gene therapy products is expected to reach market within the next five years; however, current payment systems and reimbursement paradigms are not designed to capture the value of these therapies,” Stojanovska says. “To address this issue, we’ve seen the emergence of new payment models, including a value- or outcomes-based model, pay-over time model, and a subscription-based model. And in the next 12 to 18 months, we should see a substantial shift toward these innovative payment models. In fact, nearly half of the payers surveyed said they were very likely to use an outcomes-based model.”

However, in the near term, Debbie Warner, VP Consulting, Kantar Health, says the majority of healthcare spending remains focused on managing chronic conditions for which payers and providers are also seeking value-based insurance and reimbursement solutions, making population health management an increasingly important goal. This overall shift to a value-based system will require pharma companies to adjust to remain relevant. Warner offers four tips for pharma:

  • Reassess payer value propositions to align with population health management goals.
  • Assess how the patient journey has changed and continuously monitor to agilely adapt channels and messaging for patients and HCPs.
  • Expand and evolve disease management and adherence programs so they may interact with digital health solutions being adopted by patients and providers.
  • Build real-world evidence (RWE) programs that can help integrated health systems navigate value-based initiatives.

Tech’s Influence and Impact

The rise of telemedicine, remote patient monitoring, and digital health will also force payers to rethink their approach.

“The pandemic dramatically accelerated the reimbursement for innovations associated with web-enabled remote healthcare,” says Inna Glozman, Head of IZE Product, Analytical Wizards. “As reimbursement models continue to evolve, we see an increased interest in analytics using multiple data sources to better understand the reimbursement options across different stakeholders. Wearables and other digital engagement tools are also gaining greater adoption in patient and provider communities, necessitating innovation in reimbursement models to account for use of these tools to drive improved healthcare outcomes.”

Innovation is also needed to continue covering telemedicine services. Rebecca Love, RN, MSN, FIEL, Principal Clinical Innovation, OptimizeRx, says continued telehealth visit reimbursements are at significant risk.

“While telehealth visits appear to yield better patient satisfaction, that is not directly translating into better patient outcomes,” Love explains. “Payers are not likely to reimburse telehealth simply because it is more convenient. Payers want RWE that a specific action leads to a specific outcome. There is a significant opportunity in RWE for life sciences companies and payers to find shared value, specifically with patient engagement programs designed using digital health platforms to produce similar outcomes to remote patient monitoring systems across a wide range of disease states. These programs provide the RWE that connects pharma and payers to outcomes.”

Other technologies providing digital monitoring and interventions have organically expanded, such as digital therapeutic devices for mental health, substance abuse, diabetes, asthma, migraine, and insomnia. Payers are also establishing new coverage options for these technologies.

“Some large payers are creating Digital Health Formularies and the FDA has established the Digital Health Center of Excellence to offer regulatory guidance,” says Diane Giaquinta, Chief Research Executive, Market Access, Ashfield Engage. “Ideally, as these digital monitors and interventions are created, they will be housed on ‘plug-and-play’ digital platforms for a single personal device. They will follow the patient regardless of insurance coverage and eschew specificity to pharmacy benefit manager (PBM) or payer. If patients include their personal reported outcomes, they will combine with biometrics and adherence measures to provide a database with ongoing insights into a patients’ health status, behaviors, and treatment responses, greatly enhancing patient care.”

A New Wave of Partnerships

As technology is becoming more prominent in healthcare, payers are looking to expand their capabilities with new partners and acquisitions.

“Payers are focused on increasing diversification to drive vertical integration and efficiencies,” explains Michael J. Motto, SVP, Market Access, Intouch Group. “Additionally, payer utilization of big data, AI, and predictive modeling continues to accelerate, fueled by acquisitions of technology-based platforms assets. Optum acquired the post-acute care management platform naviHealth in May 2020. In November, Centene announced its intent to acquire analytics company Apixio for its AI capabilities. Centene also acquired PANTHERx, the largest rare-disease-focused, specialty pharmacy in the U.S. And finally, in January of this year, UnitedHealth Group announced the acquisition of Change Healthcare. Data is power, and technology is clearly the driver of innovation in healthcare!”

Consumer health technology is also contributing to the momentum building around remote monitoring. Justin Freid, Chief Growth & Innovation Officer, CMI Media Group, points out that connected devices, from Peloton to Apple Watches, record our activity while the latest Apple Watch 6 even enables wearers to perform an echocardiogram and connect that data directly to their healthcare provider. Beyond the big tech companies, countless health startups at CES and SXSW also launched health monitoring devices for almost every aspect of health.

“This form of using remote monitoring via technology will continue to grow and become commonplace in how treatment is delivered,” Freid adds. “As payers continue to evolve their efforts into ‘health services’ we could see health technology startups or even devices become part of their offering even more than they are now. Many payers already led the way with early partnerships with wearables companies and programs offering discounts for fitness trackers; more innovative thinking will be on the way.”