It’s getting increasingly difficult to sort out what the terms payer and provider actually mean because their responsibilities are changing.
That much was clear at a recent gathering of a group of health IT startups, consultants, academics and a smattering from the pharmaceutical and insurance communities called Philadelphia’s Health IT Circle at Venturef0rth, a workspace for early stage companies and soon-to-be home of an upcoming health IT accelerator. The group, which formed earlier this year, meets on a quarterly basis and includes a featured presenter from the healthcare IT industry. Roger Longman, the CEO of Connecticut-based Real Endpoints, stirred some debate by maintaining that payers will not exist as we know them in 20 years.
As I understand the argument and think about it myself, it’s not so much that payers will fall off the earth. They will be doing more or less of what they do now. The Affordable Care Act has set in motion changes that are reordering how pharmaceutical companies, providers and insurers interact with each other. Employers are part of this equation too but it’s less clear how their role as insurance providers will be sustained.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
The cost of funding drug development means that payers could play a bigger role in contributing to R&D. Challenges getting enough investors to fund the early and middle stages of drug development could mean payers get involved in working with pharmaceutical companies at earlier phases of their development. Conceivably that could mean they could have more influence in what drugs actually get financed and which ones don’t.
Most payers don’t track the effectiveness of drugs they reimburse. As the adoption of electronic health records becomes more widespread, providers would be better positioned to do this since they have regular contact with their patients. And not just in person. Increasingly this contact will happen through email, text messages and video.
Healthcare providers are taking on more risk. The ACA calls for providers to be reimbursed based on patient outcomes. That means a lot of work with patients and caregivers to ensure patients follow care and medication instructions. And it’s not like this is a new area of study. But the increased burden providers will carry will necessitate a more consistent approach and the best practices that will inevitably emerge will be shared. Health IT innovations are making it easier to track patient behavior too.
Health insurance exchanges. The resistance toward states desire to navigate the complexities of health insurance exchanges means some states could opt to create health insurance clearinghouses like in Utah that would create more coverage options. Although there’s a lot of concern about the potential coverage gaps created by churn, it could also create opportunity.
One question that emerged from this discussion is who will have more influence on pharmaceutical costs going forward. Last month, Memorial Sloan Kettering successfully persuaded Sanofi to cut the price of its colorectal cancer drug Zaltrap in half as a condition for including it in the hospital’s formulary. Sanofi, for its part, has said it has not cut the price of the drug but has discounted it. Any government study on cost effectiveness is challenging because politicians cannot use cost-effectiveness as a major reason for recommending a drug.
It is tough to read the tea leaves of health insurance. But no matter what happens, its outcome continues to be debatable.
