The Reimbursement Challenges Hurting Women’s Health Companies, Per Milken Institute

When discussing challenges in women’s health, two challenges that consistently rise to the forefront are limited funding and gaps in research. But a new Milken Institute report reveals another major stumbling block for women’s health startups: coverage and reimbursement.

The report is a result of a meeting convened by the Women’s Health Network, a global cross-sector collaborative created by the Milken Institute focused on accelerating women’s health progress. In February, the Women’s Health Network brought together experts in a workshop to discuss the barriers affecting innovation in women’s health.

According to the Milken Institute, a common mistake innovators make is developing a product without determining coverage and reimbursement strategies early in the process. Innovators need to decide upfront whether they want to pursue self-pay, commercial insurance or public-program coverage because shifting pathways later can be difficult.

“I think one [takeaway from the report] is to make sure when you’re developing your innovation to think about reimbursement earlier than you think you should. … They can really lose a revenue-generating opportunity if they’re not thinking about that coverage and reimbursement earlier on,” said Jenica Patterson, senior director of the Women’s Health Network, in an interview.

Women’s health companies especially struggle when it comes to coverage and reimbursement due to a lack of research in the sector. Women weren’t required by federal law to be included in NIH-supported clinical research until 1993.

“We’ve been left out of so much research for so long. … I think one of the biggest concerns, especially for payers, is that data’s not there,” Patterson said. “That’s why we put an emphasis on really understanding two or three steps ahead, so you can collect that data to be able to make sure that in the future you won’t run into any of those issues as you’re trying to identify what coverage to go under.”

The key takeaways

The report lays out four key considerations women’s health innovators have to think about prior to developing their product. 

1. Commercialization: Should the company pursue a self-pay business model or payer coverage? The report explains that this decision needs to be made right from the get-go because transitioning later can be difficult. This is especially true when transitioning from self-pay to payer coverage as it may “require substantial product modifications to align with payer expectations and standards,” the report said. 

There are pros and cons to both the self-pay and coverage models. Self-pay can enable faster market entry, greater pricing flexibility and direct consumer engagement, but it can limit access due to out-of-pocket costs and make it harder to scale broadly. Payer coverage offers broader access and greater scalability, but involves greater pricing pressure and longer time to market.

“Self-pay can be fast,” Patterson said. “You can control your pricing. You can have immediate revenue generation, which is great. But it also can exclude many other populations. So if you think about the Medicaid population, or if you want to transition to coverage, you might have to develop that evidence for it to be covered. [When] you’re running that clinical trial, you’re not thinking about that evidence that should have been collected. You might have to go back and run another clinical trial or collect more evidence for it to be covered under insurance. That’s why it’s challenging to switch.”

2. Clinician engagement: Innovators should be involving clinicians early in the development process to ensure the solution integrates into their clinical workflows and practices. Since clinicians are dealing with a lot of administrative burdens, innovations that disrupt their workflow don’t pick up much traction. Women’s health innovators should engage a variety of clinicians, including primary care, OB/GYNs, midwives and behavioral health specialists.

3. Payer engagement: Innovators should engage payers early in product development — not wait until launch — to understand coverage requirements. This includes talking with medical directors and payer innovation teams about clinical endpoints, study design, economic evidence and coverage criteria. They should also recognize that payer evidence requirements differ from FDA requirements and should ideally be incorporated into clinical trials from the start, according to the report. 

“Neither commercial nor public payers will cover products marketed as wellness or lifestyle enhancements,” the report added. “Innovators should use language that emphasizes ‘treatment of disease’ rather than ‘general wellness’ to qualify for reimbursement and avoid unnecessary obstacles.”

4. Coding: The report emphasizes developing a coding strategy early because it can directly affect reimbursement, coverage and time to market. Innovators can use an existing code or pursue a new code.  

What innovators are saying

While the report notes that it can be difficult to move from a self-pay model to payer coverage, one leading women’s health company was able to do it successfully: Maven Clinic. For this company, starting in the direct-to-consumer market was necessary to build the evidence to get employers and payers on board to cover its services.

“I think a lot of digital health companies start as self-pay, and especially the ones that started 12 years ago. That’s how old we are now. But you have to prove that people want the service first, and that it adds value,” said Dr. Neel Shah, chief medical officer of Maven Clinic, in an interview.

Shah agreed with the benefits to self-pay that the Milken Institute report laid out, including an expedited pathway to market. But healthcare coverage is what creates “parity, equity and access,” which is why the company eventually had to transition to working with payers and employers. However, the company still has its direct-to-consumer business.

For another women’s health company, Millie, insurance-based reimbursement was the only choice. Millie is a maternity clinic offering in-person and virtual gynecology care.

“When it comes to maternity care, I don’t think [self-pay is] an option,” said Anu Sharma, founder and CEO of Millie. “This is a long, complex and unpredictable journey. … It’s not reasonable for a patient to be able to pay for any of the stuff on their own out of pocket.” 

When the company first started, it had a single clinic in Berkeley, California, which meant it had very little leverage in negotiations and largely had to accept the rates it was given. Over time, Millie proved out its model and began scaling through partnerships with health systems, co‑building service lines and evolving its payment structure in a way that gave it more leverage than it had as a standalone clinic. It offers a collaborative model that includes midwives, doulas and physicians.

Sharma said she especially agreed with the Milken Institute’s emphasis on building coverage and reimbursement strategies into the business plan from the very beginning.

“If you’re building anything in healthcare, you have to start with the endpoint and build backwards. … There’s no dearth of innovators,” she said. “There’s no dearth of the need for innovation. It’s all about solving distribution, and a big part of solving distribution is really thinking through your long-term reimbursement and economic model, and really finding the right investors that will support you through it.”

Shah added that companies must invest in demonstrating that their products meaningfully improve patients’ health outcomes.

“If you want to be covered [but don’t develop evidence], that’s a non-starter,” he said.

Photo: Maria Korneeva, Getty Images