Value-based Healthcare concept

Value-based healthcare is a concept that may sound easy to understand but is in fact difficult to define. There isn’t one single definition, but it could be defined for example: (reference below)

“Value-based healthcare is the equitable, sustainable and transparent use of the available resources to achieve better outcomes and experiences for every person.”

or

“Value-based healthcare, or VBHC, is healthcare that delivers the best possible outcomes to patients for the lowest possible cost.”

The concept was developed at the Harvard Business School and it has been since implemented on smaller scale in different institutions and for projects running for a limited time period. Due to the increasing spending in healthcare, calls for the whole healthcare sector to shift away from the current fee-for-service type of model become louder and more relevant.

Rethinking Health MOOC

The two definitions above are from the recently published Rethinking health course. Rethinking health is a free MOOC(Massive Open Online Course) on the fundamentals of value-based healthcare created by Reaktor and Gesund Partners in partnership with the University of Helsinki. The course has been sponsored by Novartis and Johnson & Johnson.

It aims to teach different definitions of value-based care:

• why value-based healthcare is relevant;
• how value-based healthcare is being used in various countries around the world;
• and what the future of value-based healthcare might be.

The course is aimed for students, physicians, nurses, policy makers, hospital directors, municipalities, pharmaceutical companies, etc., and it offers a good general understanding of what the healthcare environment looks like at the moment with examples from different countries and institutions. It introduces ideas and examples how to implement value-based healthcare and also offers predictions of what the healthcare industry might look like in the future if value-based approach is widely adopted.

The MOOC in general has a large focus and tries to cover a lot of topics around: healthcare, climate change, world economy, digitalization, future of work, etc. Some parts seem like an information overload, unless you are willing to spend a bit more time reading background information (which should be valuable, if you make the time.) The few questions at the end of each section may in fact not seem so relevant after you have been taught dozens of different facts, ideas, and terminologies. It is a information heavy package but in general it gives a relatively easily accessible introduction to the concept of value-based healthcare and manages to cover the topic from all the relevant perspectives. We highly recommend anyone slightly interested to at least skim through it or bookmark it for a rainy weekend.

For anyone who works in any area of the Healthcare industry, this course can provoke some interesting thoughts and may help rethink how their particular business operates and what we should do change it. In our case, we thought about what we can do transform Pharmacovigilance into a value-based field of Healthcare. Currently, the industry is far from it and we have some work to do to change it.

Value-based Healthcare and PV

With the help of the MOOC, the concept of Value-based Healthcare provides another perspective on our own industry. The topic of value-based healthcare is closely tied with pharmacovigilance activities.

The pharmaceutical companies are responsible for monitoring the safety of their medical products and for commencing appropriate actions if changes are identified in the benefit-risk balance of the product. Safety and efficacy are key components of the quality of care as defined by the WHO.

While pharmacovigilance does not have a clearly visible impact to the treatment result with medicinal products, it is one of the most important activities that make it possible to treat patients with medicinal products in the first place. If we do not know that the products are safe to use, they cannot be used by the patients.

By monitoring the safety-benefit profile of the product, the companies and authorities are collecting information about the products that leads to safer and more efficient products. Also, by enabling the adverse event reporting and especially through patient support programs, the patients are more involved in their treatment. There is a lot of room for improvement here, but the practices and ideas are already there.

Pricing and Pharmacovigilance Regulation

If we define Value-based Healthcare as the one that delivers outcomes for the lowest possible cost, then it’s clear the whole Pharma industry has a lot to do to get there. Across the industry, whether you’re in drug development, clinical trials, or on the market, all around there is a large number of highly trained and expensive people involved, putting in hundreds upon hundreds of hours of work. There is no question about the need for expertise and training for the people involved, but we do question the necessity for having to involve such big numbers and spending so much time; clearly resulting in delaying developments in new treatments, and heavily increasing the costs.

Pharmacovigilance is a small part of the whole industry, but all these issues are very much present and are telling of the overall problem. We see two main factors here: outdated regulation, and business model of service providers.

The treatments are moving into more specialized treatments solutions and orphan drugs from the one-pill-fits-all of the past that is the reason why the science of pharmacovigilance exists in the first place. The current pharmacovigilance regulation is outdated and does not allow much leeway for experimental products. The situation is improving through compassionate use but there is still much to improve.

Even with a small product, the marketing authorization holder is required to establish a heavy pharmacovigilance set-up that slows down the implementation of new drugs but also increases the price of the product. This makes it more difficult for new, better products to enter the market. It also requires just as heavy set-up for generic and well-known products, making it arguably more difficult for cheaper alternative treatments to get to patients. In many cases, the regulations may be more sensitive to see whether a heavy Pharmacovigilance is truly necessary. Undoubtedly, it is an essential part of the drug life-cycle, but complex regulations should not be a deterrent for new, cost sensitive, companies.

Pharmacovigilance is a Fee-for-Service Industry

Another problem we see is the established commercial model of PV service providers. Under this model a provider is charging for their services either per hour or per activity performed (this, too, largely based on an hour-count). Logically, for the providers, the initiative has traditionally been to perform as many services or to be more exact, spend as many hours as possible to justify a higher invoice.

So, with the incentive to spend as much time as possible, it becomes much less appealing to innovate and bring in more efficient and streamlined processes and digital tools. We think this is a major reason why Pharmacovigilance has been so slow to adopt new technologies, widely used elsewhere. And, a critical reason why we still have a lot of work to claim PV is a “value-based” industry.

It shouldn’t surprise the reader that Tepsivo is changing this. We started the company to provide value-added services in PV. That means to remove all unnecessary workload, avoid engaging the expensive experts for too long, and overall bring down the time effort; reducing costs. And while most traditional providers claim that all these are at the cost of quality, it simply is not true. We can do things effectively while ensuring the highest quality standards, claiming otherwise is just protecting the old model, which benefits companies from inefficiency.

Luckily, we’re not the only company with such vision. It will be good to see how the PV space will be reshaped as we and like-minded firms become more prominent in the market.

We will regularly provide more thoughts on these topics and our ideas on what the future of Pharmacovigilance should look like.