You know the old saying, “An apple a day keeps the doctor away”? Or how about the idiom “An ounce of prevention is worth a pound of cure”? Prevention is an oldie but goodie. Intuitively it makes sense and, in many cases, empirically it makes dollars and cents. Tertiary prevention (e.g., immunotherapy) slows or stops disease progression, and secondary prevention (e.g., mammography) spots new cases early. Furthest upstream is primary prevention, which protects (e.g., vaccinations) and promotes (e.g., wellness programs) health. All require upfront investments in pursuit of future returns. The further upstream the investment, the longer the wait for the return. Are payers on board?
Conventional wisdom
There’s a common misperception that payers are myopic. Several arguments are used to support this point of view. One is member churn: After all, why invest in a member’s future well-being if s/he is not likely going to be my member in a few years? Then there is the budget-cycle reasoning: Why would a manager look beyond the current or upcoming fiscal year if performance appraisals and bonuses discourage doing so? And why would an organization take a long-term view if investors and regulators do not reward long-term outcomes? Another series of explanations falls under structural barriers, like the division of pharmacy and medical benefits or the separate management of commercial and Medicare lives.
But the simple assumption that long-term outcomes do not resonate with payers is wrong. And these worn explanations of what makes payers tick are overly simplistic.
Required investments
Regulators have required payers to cover benefits that are, in essence, investments in long-term outcomes. State mandates, including screening for breast, cervical, colorectal, ovarian, prostate, and testicular cancers; HPV vaccination; and coverage for smoking cessation are significant examples that predate the Affordable Care Act (ACA).
At the federal level, the ACA requires private payers to cover certain preventive services without patient cost sharing, including those recommended by the USPSTF, the ACIP, the HRSA’s Bright Futures Project, and the HRSA/IOM committee on women’s clinical preventive services. These include a slew of screenings and counseling, immunizations, and preventive services for children, youth, and women. Noteworthy is the coverage of FDA-approved pharmacotherapy for adult smoking cessation, and not just screening for tobacco use. Payers do it when they have to do it.
Measured performance
HEDIS performance measures have motivated payers to invest in preventive services for years. Measures have encouraged primary prevention (e.g., weight assessment and counseling for nutrition and physical activity in children and adolescents, or immunizations, including flu vaccines for those 65 and older); secondary prevention (e.g., cancer, chlamydia, and lead screenings); and tertiary prevention (e.g., depression, osteoporosis, diabetes, asthma, and high blood pressure management). These external performance measures impact how payers measure management and manage measurement.
Purchased benefits
Wellness programs represent long-term investments, and some employers (e.g., Johnson & Johnson) have been at the forefront for decades. Encouraging employees and even their dependents to exercise more, improve their diets, stop smoking, or engage in stress reduction may have some short-term benefits like greater productivity and lower absenteeism. Programs have been broadened to include financial and emotional wellness, and are increasingly supported by technology (e.g., apps and wearables). However, it may take many years — even decades — to realize the benefits of long-term outcomes.
Most payers offer these programs to employers, but about 40% of employers offering health benefits do not buy them. Many employers have only short-term relationships with their workforces and can’t make a business case for long-term investments. Other employers embrace these programs —ROI data or no — simply because they believe in them. And, of course, the scope and quality of some employers’ programs are often a function of the benefits they buy. To a large degree, you get what you pay for.
Compelling outcomes
Payers’ long-term bets are also based on evidence. Stronger evidence makes the potential ROI more believable, but consider the “evidence” manufacturers all too frequently offer up: a budget impact model fraught with questionable assumptions? It may not be worth the squeeze. Payers want real-world evidence. How about product launches based on intermediate outcomes? Manufacturers commonly design clinical trials with intermediate outcomes because it’s the expedient thing to do. But if a product lowers a patient’s cholesterol, that isn’t very meaningful to payers. If the same cholesterol-lowering drug is proven to decrease the risk of stroke or MI — now, that’s meaningful!
Long-term financial and clinical outcomes take much more time to measure and cost much more to obtain than what can be shown through modeling and intermediate outcomes. So, is it a payer’s failure to “get it”? Or a manufacturer’s failure to prove it?
Timeout
Despite the initial sticker shock and budget impact, payers understand the value proposition of direct-acting antivirals that cure hepatitis C: a very large short-term cost (the $100,000 cure) with commensurate long-term benefits (no half-million-dollar liver transplant). Finger pointing is not productive, but understanding the conditions under which payers make decisions can inform actions by policymakers, regulators, purchasers and manufacturers. If payers all made more long-term, upstream investments, then, in theory all should benefit. Sure, maybe some payers could or should do more. And maybe it is time to pay payers more to do more.
A nuanced understanding of payers’ views on long-term outcomes has several implications for manufacturers. First and foremost, manufacturers should make greater investments in studies that demonstrate long-term outcomes. Manufacturers could then leverage the evidence when lobbying for laws and regulations that require coverage of their products, when attempting to induce employer demand for their products and supporting value-added programs, and when trying to optimize market access. And the endpoints used in these studies could support the development of valid performance measures associated with the use of their products. It’s time to think of payers as willing and able partners when pursuing long-term outcomes.
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