Articles
12/11/18
Accelerating Growth for Pharmaceutical and Biotech Companies by Partnering with Payors
Have you created productive partnerships with health care financiers (payors)? Is your market share higher where there is increased managed care organization penetration? If not, you may consider focusing on relevancy and relationships with the major payors, ACOs (Accountable Care Organizations), health systems and large self-insured employers across the nation.
If you are a Pharmaceutical and/or Biotech company challenged with how best to optimize your health care financier (employers, health plans, ACOs and at risk health systems) channels thus maximizing market share, this article is for YOU!. Understanding how various channels make decisions on how or IF to position your products should be more than a therapeutic equivalency or unit cost discussion. The challenges are many, but can be overcome:
How relevant is your product in comparison to payors major cost of care trends and drivers?
Do your outcomes impact a broad cost of care view, making your product relevant to payors concerns beyond just a formulary position? Hepatitis B drugs became VERY relevant when they were launched due to the impact to payors total cost of care.
Have you PROVEN differentiated outcomes (not just safety and efficacy) for your product vs your competition?
Is there a level of trust and integrity in your relationships with payors?
Do you have relationships with a broad sphere of influencers?
Do you know what product lines the payor markets? To what extent does your product impact the Triple Aim (quality, cost, and patient experience)?
The solutions lie in two key areas:
Relevancy - Define the relevancy of the cost of care for the organization, including a broader view of drug cost and safety (those are table stakes). What are your clinical and economic outcomes, looking beyond unit cost? We are sure you have approached this by reviewing Medicare data, quantifying all aspects of the cost of care for a specific impacted disease state and how your product impacts these areas – emergency room visits, length of stay in the hospital, etc. By comparing the total cost of care impact, for your specific disease states, to their total cost of care, the health financier might be interested in your solution beyond unit cost. For example: the estimated total cost of care for an average Medicare member is between $800 -$900 pmpm and your impacted therapeutic area is found to be $20 pmpm, THAT may be considered a significant impact to their total cost of care. The formulary and unit cost discussion fades away and your product relevance drives the discussion.
Relationships - Relationships within Payors should extend beyond the PBM and the age old unit cost and safety discussion, both of which are relevant and important but not your key differentiator. Do you understand Payors business model and key drivers for success? Which product lines are they selling and servicing – Medicare Advantage, Medicare, Commercial group and or individual lines? What is membership and medical loss ratio (MLR) by line of business? What are the key cost of care drivers for these MLRs? After you understand THEIR business, you can begin to build relationships with key decision makers. By building trust throughout the organizations, your value will be increased and your message will be heard. Who are the key players within Payors to build relationships?
Chief Medical Officers
P&T members
Population health leaders
Service line leaders for your disease state
Clinical pharmacists
CFOs
Quality leadership (STARS and HEDIS performance)
Myriad of other value based leaders
To summarize, in order to maximize your market share and leverage payor channels you might consider establishing RELEVANCE and RELATIONSHIPS. Once you have these foundational elements, your market share will accelerate and you can work collaboratively to drive your product line initiatives! Front Edge has extensive experience in the payor (ACO, IDN, insurance company…) space that can be used to optimize your payor strategies.
12/11/18
Leverage value-based clinical models beyond Medicare and Medicare advantage, creating TRUE High Performing Networks
HEALTH SYSTEMS (with ACOs) AND PHYSICIAN LED ACOUNTABLE CARE ORGANIZATIONS- How are you monetizing your value-based strategic initiatives?
What is your response to the wave of population health and accountable care trends?
What is your secret sauce?
What measurements exist to demonstrate your effectiveness and shared value?
Having spent the time and effort to build population health models, NOW what?
How is this impacting your overall revenue (FFS + Pay for Value)
How do you further monetize this pop health investment?
We will attempt to ponder these questions.
What are the key ingredients of your Population Health “SECRET SAUCE” you are attempting to leverage in the Commercial self-insured and individual segments?
Population health model of care, improving the quality and cost of care
Better engaging with your sickest populations
Better physician engagement
Transitions post discharge to alternative settings, e.g. snf, home care
Delivering better care where your patients want and need care, IN THE HOME
Etc.
Risk adjustment capabilities
Continuous quality improvement key metrics – STARS, HEDIS, etc.
Aligning incentives to reward/engage provider in value-based care initiatives
Your PROVEN economic and clinical outcomes derived from all this hard work
Additional resources and tools
HOW can you best deliver this to the market?
Is it to your advantage to deliver this population health model to the market through NARROW networks or HIGH performing networks (HPNs)? Narrow networks have traditionally been a contracting scheme by payors (health plans and large self-insured employers, etc.), theoretically driving more volume to providers who are willing to discount their fees. A HPN has proven higher quality scores, as well as economic cost of care savings advantages. If you have invested in the key ingredients for your SECRET SAUCE, why would you not monetize this by positioning yourselves as HPNs?
Washington Business Group on Health (WBGH) recently published these facts:
More employers plan to provide these strategies:
11% of employers offer high-performance/narrow networks; expected to quintuple to 61% in 2018.
37% of employers contract with a health plan for services at a COE (Center of Excellence); expected to surge to 62% in 2018.
5% of employer’s contract directly with providers for services at a COE; expected to jump to 12% in 2018.
It appears there is a clear trend from both self-insured employers and health plans to select the perceived highest quality providers for their employees and members. How are you positioned to compete in this changing environment?
Where CAN you leverage this secret sauce to gain market share?
CMS –
ACOs – MSSP, Tracks 1-3, Pioneer, Next Gen models with more to come. These are table stakes and the entry to the game.
Health plans
Medicare Advantage products
ACA offerings
For select large local self-insured employers
Direct to large local Self-insured employers
HOW is the real question!
If you have already developed your population health capabilities AND have proven quality and cost improvement, your organization has more than likely taken advantage of the CMS innovation channel through: MSSP, Tracks 1-3, Pioneer or Next Gen etc. models.
Have you taken this exceptional model to your health plan partners to create HPNs? Have you targeted large local self-insured employers? An under penetrated channel for many ACOs is the self-insured. employer market place. If you choose to market to self-insured employers, strategies you will need to implement are:
Network pricing for your HPN. Though you are providing improved clinical and economic outcomes, employers and consumers have expressed they need a significant product pricing incentive to forego a broad network.
Do you have a claims processing and customer service solutions? Better known as TPA (third party administrator) capabilities. If you are working with self-insured employers you may need to either use their solution or bring one to the table. There are many options.
How will you outsource marketing your HPN? Partnering with a select number of local insurance brokerage firms will enable you to focus on what you do best, DELIVER EXCEPTIONAL CARE in an accountable care environment.
How will you drive utilization to your facilities while providing access for remote employees? Creating multi-tier benefit designs should solve this challenge. Your HPN will need to be able to address geographic coverage issues by working with other HPNs as well as out-of-area solutions for employees outside your service area. There are options with benefit design and HPN partnerships.
If you are not leveraging your secret sauce, population health strategies, by creating a HPN market position, you have not fully monetized your investments. Odds are that your competitors are, Carpe Diem and get to work!!