Value-based Contracts Research Articles

Pharmacy benefit managers and drug affordability policy proposals for enhancing access in underserved communities

Pharmacy Benefit Managers (PBMs) play a pivotal role in the pharmaceutical supply chain, yet their practices have increasingly contributed to the rising costs of prescription drugs and limited access to essential medications, particularly in underserved communities. This paper critically examines the role of PBMs, highlighting their challenges to drug affordability and accessibility. It explores the limitations of existing policies and proposes comprehensive reforms to enhance transparency, accountability, and fairness in PBM operations. The proposed policy interventions include mandatory transparency in PBM rebates and formularies, regulations on rebate retention, and fair reimbursement rates for pharmacies. Additionally, broader strategies such as government regulation of drug prices, expanded subsidies for low-income populations, and value-based contracts are discussed as potential solutions. The paper concludes with recommendations for policymakers, healthcare providers, and PBMs, emphasizing the need for collaborative efforts to ensure the successful implementation of these reforms. Addressing the issues posed by current PBM practices, these policy proposals aim to significantly improve drug affordability and access in underserved communities, ultimately contributing to a more equitable healthcare system. Keywords: Pharmacy Benefit Managers (PBMs), Drug Affordability, Healthcare Access, Underserved Communities, Policy Reform, Pharmaceutical Supply Chain.

How a Robust Community Clinical Practice Arm Can Support an Academic Health System’s Tripartite Mission

Natural tension exists between the community clinical practice arm and the academic clinical practice arm within a large academic health system (AHS). Disparate salary structures, overlapping geography, competition for patients, and inequitable application of standards and resources can all lead to suboptimal system performance, as each clinical practice works to maximize individual outcomes. These tensions can lead to unnecessary duplication of resources and wasting time and energy focusing on internal politics and competition rather than on addressing external competitive threats, such as the influence of venture capital, virtual services, and retail entrants into the clinical space. At the same time, the health care landscape continues to shift, as physician ownership of practices has fallen below 50%, creating both challenges and opportunities for health systems. This article describes how, over the last 15 years, UNC Health has built a robust community practice arm called UNC Physicians Network (UNCPN) alongside the academic department structure that fully supports UNC Health’s tripartite mission. The authors describe how a community arm within an AHS can expand its clinical footprint and harmonize research and teaching efforts to support the AHS mission in a community setting. To accomplish this harmonization, UNCPN identified three high-priority focus areas for intentional investment in collaboration between the community and academic arms: (1) partnering to increase community-based research; (2) growing internal capacity for learners; and (3) scaling care delivery quality and population health initiatives across a wide geography. These intentional efforts have allowed UNC Health to improve the performance of all AHS missions: research, education, and population-based clinical care. Specifically, the number of community clinics that were actively participating in research more than doubled, from 23 practices in 2019 to 49 in 2023. In association with the UNC Schools of Medicine and Nursing, for the last few years, approximately 65–70 preceptors have been committing as many as 23,000 hours to teaching about 95 students each academic year. In addition, during that same period, the percentage of School of Medicine student learners precepted nearly doubled in UNCPN adult clinics (Family Medicine and Internal Medicine) and increased by 50% in UNCPN pediatric clinics. As the number of UNCPN clinicians increased from 44 in 2010 to 697 in 2024, the number of primary care–empaneled patients grew from 200,000 in 2019 to more than 350,000 in 2024, with currently more than 540,000 patients in total, inclusive of primary and specialty care, which has allowed scaling of high-quality care, leading to top-tier performance in value-based contracts.

Value-Based Contracting in Clinical Care

Value-Based Contracting in Clinical Care

Facilitators of and barriers to County Behavioral Health System Transformation and Innovation: an interview study

BackgroundInadequate and inequitable access to quality behavioral health services and high costs within the mental health systems are long-standing problems. System-level (e.g., fee-for-service payment model, lack of a universal payor) and individual factors (e.g., lack of knowledge of existing resources) contribute to difficulties in accessing resources and services. Patients are underserved in County behavioral health systems in the United States. Orange County’s (California) Behavioral Health System Transformation project sought to improve access by addressing two parts of their system: developing a template for value-based contracts that promote payor-agnostic care (Part 1); developing a digital platform to support resource navigation (Part 2). Our aim was to evaluate facilitators of and barriers to each of these system changes.MethodsWe collected interview data from County or health care agency leaders, contracted partners, and community stakeholders. Themes were informed by the Consolidated Framework for Implementation Research.ResultsFive themes were identified related to behavioral health system transformation, including 1) aligning goals and values, 2) addressing fit, 3) fostering engagement and partnership, 4) being aware of implementation contexts, and 5) promoting communication. A lack of fit into incentive structures and changing state guidelines and priorities were barriers to contract development. Involving diverse communities to inform design and content facilitated the process of developing digital tools.ConclusionsThe study highlights the multifaceted factors that help facilitate or hinder behavioral health system transformation, such as the need for addressing systematic and process behaviors, leveraging the knowledge of leadership and community stakeholders, fostering collaboration, and adapting to implementation contexts.

Improving patient outcomes while reducing readmissions with data analytics

As post-acute care spend continues to rise and the Centers for Medicare and Medicaid Services (CMS) moves forward with promoting both value-based and risk-bearing models of care, it is essential for accountable care organisations (ACOs), payers and hospital providers to take proactive measures to find innovative and data-driven strategies to meet the future demands of healthcare. Yet disparate electronic health record (EHR) systems between acute and post-acute providers continue to pose challenges in the ability to access live patient data across care settings, which enables clinical line of sight to manage both patient and population-level quality outcomes. Utilisation of an EHR-agnostic platform, which mitigates interoperability issues, can improve care transitions, provide data analytics to manage the patient care journey, foster seamless implementation of standardised care pathways and ultimately reduce total costs within post-acute networks by decreasing readmissions and length of stay. St. Joseph’s Health implemented such a data analytics platform and instituted a post-acute nurse navigator, social worker and care manager roles to manage their value-based patients in the postacute setting. As a result, their Medicare Shared Savings Plan ACO, Mission Health Coordinated Care, achieved a significant reduction in readmissions from 24 per cent to 17.8 per cent, as well as a total cost of care savings of US$1.6m in its first year. Currently, the readmission rate is down to 13.6 per cent, and there has also been a 3.2-day reduction in average length of stay. Owing to their successful post-acute strategy and programming, the project was scaled to include all patients in value-based contracts.

Evaluation of claims data from a commercial value-based insurance product shows pediatric imaging is not a major driver of overall or pediatric healthcare expenditures.

Initiatives to reduce healthcare expenditures often focus on imaging, suggesting that imaging is a major driver of cost. To evaluate medical expenditures and determine if imaging was a major driver in pediatric as compared to adult populations. We reviewed all claims data for members in a value-based contract between a commercial insurer and a healthcare system for calendar years 2021 and 2022. For both pediatric (<18 years of age) and adult populations, we analyzed average per member per year (PMPY) medical expenditures related to imaging as well as other categories of large medical expenses. Average PMPY expenditures were compared between adult and pediatric patients. Children made up approximately 20% of members and 21% of member months but only 8-9% of expenditures. Imaging expenditures in pediatric members were 0.2% of the total healthcare spend and 2.9% of total pediatric expenditures. Imaging expenditures per member were seven times greater in adults than children. The rank order of imaging expenditures and imaging modalities was also different in pediatric as compared to adult members. Evaluation of claims data from a commercial value-based insurance product shows that pediatric imaging is not a major driver of overall, nor pediatric only, healthcare expenditures.

HTA358 Value-Based Contracts Types Across Global Healthcare Systems: Comparing Perceptions Between Finance-Based and Outcomes-Based Agreements

HTA358 Value-Based Contracts Types Across Global Healthcare Systems: Comparing Perceptions Between Finance-Based and Outcomes-Based Agreements

HTA289 Optimizing Healthcare Outcomes: Identifying the Conditions for Successful Value-Based Contracts

HTA289 Optimizing Healthcare Outcomes: Identifying the Conditions for Successful Value-Based Contracts

HTA63 Qualitative Analysis of Value-Based Contract Experience, Perception, and Future Adoption across Geographies

HTA63 Qualitative Analysis of Value-Based Contract Experience, Perception, and Future Adoption across Geographies

Using Real-World Data to Inform Value-Based Contracts for Cell and Gene Therapies in Medicaid.

High upfront costs and long-term benefit uncertainties of gene therapies challenge Medicaid budgets, making value-based contracts a potential solution. However, value-based contract design is hindered by cost-offset uncertainty. The aim of this study is to determine actual cost-offsets for valoctocogene roxaparvovec (hemophilia A) and etranacogene dezaparvovec (hemophilia B) from Colorado Medicaid's perspective, defining payback periods and its uncertainty from the perspective of Colorado Medicaid. This cost analysis used 2018-2022 data from the Colorado Department of Health Care Policy & Financing to determine standard-of-care costs and employed cost simulation models to estimate the cost of Medicaid if patients switched to gene therapy versus if they did not. Data encompassed medical and pharmacy expenses of Colorado Medicaid enrollees. Identified cohorts were patients aged 18+ with ICD-10-CM codes D66 (hemophilia A) and D67 (hemophilia B). Severe hemophilia A required ≥ 6 claims per year for factor therapies or emicizumab, while moderate/severe hemophilia B necessitated ≥ 4 claims per year for factor therapies. Patients were included in the cohort in the year they first met the criteria and were subsequently retained in the cohort for the duration of the observation period. Standard-of-care included factor VIII replacement therapy/emicizumab for hemophilia A and factor IX replacement therapies for hemophilia B. Simulated patients received valoctocogene roxaparvovec or etranacogene dezaparvovec. Main measures were annual standard-of-care costs, cost offset, and breakeven time when using gene therapies. Colorado Medicaid's standard-of-care costs for hemophilia A and B were $426,000 [standard deviation (SD) $353,000] and $546,000 (SD $542,000) annually, respectively. Substituting standard-of-care with gene therapy for eligible patients yielded 8-year and 6-year average breakeven times, using real-world costs, compared with 5 years with published economic evaluation costs. Substantial variability in real-world standard-of-care costs resulted in a 48% and 59% probability of breakeven within 10 years for hemophilia A and B, respectively. Altering eligibility criteria significantly influenced breakeven time. Real-world data indicates substantial uncertainty and extended payback periods for gene therapy costs. Utilizing real-world data, Medicaid can negotiate value-based contracts to manage budget fluctuations, share risk with manufacturers, and enhance patient access to innovative treatments.

All-payer value-based contracting in organizations with Medicare ACOs.

To measure the prevalence of non-Medicare value-based contracting and participation in contracts with downside risk among organizations participating in the Medicare Shared Savings Program (MSSP). Cross-sectional analysis of 2022 accountable care organization (ACO) survey. The author analyzed surveys from 100 organizations participating in the MSSP that reported the number of covered lives they have in value-based contracts in traditional Medicare (ACOs), Medicare Advantage (MA), commercial payers, Medicaid managed care organizations, Medicaid, and direct-to-employer arrangements. We analyzed the distribution of covered lives across shared-savings, shared-risk, and full-risk contracts and analyzed changes between 2018 and 2022. Respondents reported 15.5 million covered lives in value-based contracts. All respondents have Medicare ACO contracts, and roughly 75% reported value-based contracts with commercial and MA plans. Approximately one-third reported such contracts with Medicaid managed care plans. Seventy percent of covered lives in respondents' Medicare ACO contracts included downside risk for losses compared with 51% of lives in commercial plans and 45% in MA plans. Compared with a similar 2018 survey, the proportion of respondents in value-based MA contracts doubled, and the proportion in commercial contracts rose by half. Organizations that participate in Medicare ACO models have substantially increased their participation in value-based contracts with other payers. They reported a higher proportion of Medicare ACO covered lives in downside risk arrangements than in commercial or MA contracts.

What Value-Based Care Means for Physician Leaders

Value-based contracts have spread unevenly across the country but are becoming increasingly common. Although they require chief medical officers and other physician leaders in health systems to adopt new thinking and master skills well beyond clinical expertise, value-based contracts offer a strategy for improving healthcare overall.

Identifying Implementation Factors for the Development, Operation, and Sustainment of Ambulatory Care Pharmacy Programs: a Qualitative Study

BackgroundPharmacist-led programs and clinics have been integrated into primary and specialty care clinics in a variety of ways, for example, to improve diabetes outcomes via patient education and counseling. However, factors important to the implementation of different outpatient pharmacy models have not been well elucidated.ObjectiveTo identify provider- and health system–level drivers of implementation and sustainability of pharmacy-led programs in the outpatient setting.DesignQualitative study of key informants using semi-structured interviews of individuals working in various roles throughout a large health system, including ambulatory clinical pharmacists, pharmacy managers, medical directors and physician leaders, and operations and quality managers.ParticipantsKey informants (n=19) with leadership roles in pharmacy programs and front-line experience providing integrated pharmacy care were selected purposively and with snowball sampling.ApproachWe coded the interviews using a codebook derived from the 2022 Consolidated Framework for Implementation Research (CFIR), which details various internal and external factors important for implementation.Key ResultsWe identified the following themes related to implementing ambulatory care pharmacy programs: (1) pharmacy programs varied in their level of embeddedness in the outpatient clinic, (2) establishing pharmacy program required leadership advocacy and coordination among stakeholders, (3) continued operations required integrated workflows and demonstrated value to the health system and clinicians, and (4) established revenue streams or added indirect value and continued improvement of integration sustained programs over time.ConclusionsExternal policies and incentives such as new reimbursement codes and quality measurement programs that rely on pharmacy input play a significant role in shaping the design, implementation, and sustainability of health system outpatient pharmacy programs. Ensuring that quality metrics used in value-based contracts or programs demonstrate pharmacy benefits will be critical to supporting and growing pharmacy programs.

Postmarket Surveillance for Effective Regulation of Digital Mental Health Treatments.

Postmarket Surveillance for Effective Regulation of Digital Mental Health Treatments.

HPR107 Landscape of Value-Based Contracting in Oncology

Increasing approvals and rising budget impact of cancer treatments over the past few decades have raised the need for value-based contracting – arrangements between healthcare payers and biopharmaceutical companies that allow coverage of new medicines while accommodating uncertainties around their performance and financial impact. The objective of this study was to identify and analyze publicly available value-based contracts (VBCs) for oncology drugs.

Aligning System Goals Through Value-Based Contracting

Aligning System Goals Through Value-Based Contracting

Alternative Payments and Physician Organizations.

There are longstanding concerns about the sustainability of the US health care system. Payment reform has been seen over the last decade as a key strategy to reorienting the US health care system around value. Alternative payment models (APMs) that seek to accomplish this goal have become increasingly prevalent in the US, yet there is a perception that physicians are resistant to their use and that organizations have been slow to adopt such models. The reasons for the limited effectiveness of APM programs are multifactorial and include aspects related to the design and implementation of these programs and lack of alignment and coordination across different payers and health care sectors. Most importantly, however, is that the current organizational structures in US health care serve to dampen the direct impact of these incentives, often because health care delivery organizations face conflicting incentives themselves. Organizations filter and refine the incentives from multiple external payment contracts and develop internal incentive systems that best reflect the amalgamation of the incentives embedded across their contracts, and thus the fragmented nature of the US health care system serves to undermine efforts to transform care under value-based contracts. In addition to organizations having conflicting incentives, there also are fundamental problems with the design and implementation of APMs that hinder their acceptance among physicians and the organizations in which they work. Moreover, much remains to be learned about how organizations can best adapt to succeed under these models, and how organizational culture can be leveraged to transform care.

Pharmacy leaders find common ground on population health.

Participants in ASHP’s August 24 Pharmacy Executive Leadership Alliance (PELA®) and the Section of Pharmacy Practice Leaders forum say that the profession’s path forward on population health management runs through strategic initiatives focusing on quality metrics for public and private payers. What’s still unclear is exactly where to direct the profession’s efforts to meet payers’ quality expectations. “Do we prioritize putting pharmacists in internal medicine practices versus family medicine, [because] internal medicine patients tend to be more complicated?” asked presenter Fern Paul-Aviles, assistant vice president for population health strategy, 340B, community clinic pharmacy services, behavioral health, and long-term care for Charlotte, NC–based Atrium Health. “Do you put more pharmacist resources in the practices that have more value-based contracts? Or do you look at where the worst quality scores are and allocate pharmacists where the worst quality scores are in the hope of improving the quality scores in those practices?” Fern-Aviles said her health system has shared-savings contracts with 4 Medicare Advantage plans. To secure the full financial incentives and attain the highest Medicare star rating, the healthcare team must meet medication adherence targets for beneficiaries taking statins, antihypertensive drugs, and diabetes medications.

Identifying outcome measures for atrial fibrillation value-based contracting using the Delphi method.

Value-based contracts that tie payments for pharmaceuticals to predefined outcomes aim to promote value through shared risk and aligned incentives between manufacturers and payers. We conducted a Delphi study among diverse stakeholders (patients, providers, payers, pharmacy benefits managers, pharmaceutical company representatives) to identify top meaningful outcomes for inclusion in value-based contracts for atrial fibrillation medications. The final panel (n=55) rated the importance of each outcome on a 5-point Likert scale and selected their top 3 most meaningful outcomes. Non-patient participants rated the feasibility of collecting each outcome on a 5-point Likert scale. Consensus was defined as ≥75% agreement (Likert scores ≥4/5 or selection of an outcome as most meaningful). Differences between stakeholder groups were examined using Fisher's Exact Test. Consensus was achieved for importance of 10 outcomes (Likert scale), where "preventing stroke or mini-stroke" reached 100% agreement (55/55). Eighty-one percent (44/54) of participants selected "preventing stroke or mini-stroke" as the most meaningful outcome (rank order question). The measures rated as most feasibly collected were "reducing hospitalizations" (97%, 36/37) followed by "preventing stroke or mini-stroke" and "reducing emergency department visits" (both 92%, 34/37). There were statistically significant differences between patients and non-patients [0% (0/17) vs 22% (8/37), P=0.047] and patients and providers [0% (0/17) vs 39% (7/18), P=0.008] in selection of "improving health-related quality of life" as a most meaningful outcome. These findings will inform the design of atrial fibrillation value-based pharmaceutical contracts and provide additional insight into preferences for outcomes which could be used to improve the quality of atrial fibrillation care.

3rd Annual International Pharmacoeconomic Forum Highlights.

3rd Annual International Pharmacoeconomic Forum Highlights.