Meet Emma – she has been diagnosed with Metastic breast cancer (MBC) and has been prescribed a high-cost therapy treatment by her clinician to reduce tumor size. She will receive three treatments over three months for 30’000 USD total. Her health insurance covers 80% of the cost and 20% will be co-paid by Emma herself.
After 3 months on treatment, Emma’s treating clinician cannot see any tumor reduction, which means, Emma and her insurance have paid 30’000 USD for a high-cost drug which did not achieve a positive outcome. This is what we call volume-based pricing, a payment independent of the outcome.
Now let’s rewind – and let’s assume that prior to Emma’s breast cancer diagnosis, a contract between the drug manufacturer and Emma’s insurance is in place, which defines that if Emma’s tumor size is not reduced by a certain amount, only 25% of the price is being reimbursed to the manufacturer – 20% by Emma’s health insurance and 5% by co-payment of Emma. The insurer saves 18’000 USD and Emma 4’500 USD compared to conventional models.
So, after 3 months, there has been no reduction in tumor size, hence the drug has not helped Emma. It did not provide any value to her, her insurance or society. According to the value-based contract, the reimbursement is limited to 30% of the agreed full price. The associated savings can be then used by Emma’s insurance to pay for another drug which might help Emma to shrink the tumour. THIS is called value-based pricing, the future of healthcare. Government and industry health leaders on national and international level regularly sit together to make it reality.
To implement value-based healthcare pricing, information about Emma’s treatment and its progress needs to be shared. Her health insurer and the drug manufacturer need to know from Emma or her clinician that the drug did not work, based on certain measures called outcomes. Of course, Emma’s clinician could send an email or call the insurance. But unfortunately, Emma is not the only one suffering from cancer or other severe diseases and the sharing of sensitive information on a large scale will result in heavy workloads for all parties involved with limited transparency throughout the process. To deliver a sustainable value-based healthcare program with billions of data points would become very complex.
Transparency of data and outcomes cannot be provided to payers, providers and manufacturers alike. Outcomes would stay on a high level trying to keep complexity relatively low. High administrative burden with intensive labour on all sides would create additional costs and long payment cycles. And different handling processes with different payers, even in the same country, will cause confusion. Furthermore, would you have biases towards data from a customer of yours as a basis for your reimbursement?
These are some of the practical limitations which prevent value-based pricing to become reality in an impactful way. Payers and manufacturers alike currently fail to operationalise their strategies in an efficient way. At the same time, all these limitations keep patients from getting access to the treatments that help them the most.
We from Lyfegen found a solution to break down these barriers to sustainable healthcare.
Our flagship, and first of its kind platform Lyfevalue allows trusted, automated and scalable healthcare pricing. The platform can connect to hospital systems in order to retrieve patient outcomes for given cohorts and determine the price payable based on the conditions sets by the manufacturer and payers. Using smart contracts on the blockchain, we enable patients, payers, providers and manufacturers to enter value-based pricing agreements with immutable outcome data, near real-time reimbursement notifications, minimal administrative burden and highest data security.
Our smart integration engine allows us to deal with complex data sources, use data from different sources for the same patient and conduct data quality checks on the fly.
Our solution enables payers, providers and manufacturers to operationalise their value-based healthcare strategies for a more sustainable health system in which the added value of a treatment for the patient determines the price. For Emma and all others this means, that they can access the best treatments available in the market with the best health outcomes possible.
….And that’s what we strive for at Lyfegen – Accelerating Value-based Healthcare for Patients.