How to Demonstrate Value: Established CQMs or New Value-Based Payment Models?

The healthcare industry is facing pressure to deliver better health outcomes at lower prices and is shifting risk and accountability to providers through value-based payment models. To succeed, drug and device manufacturers will need to be able to calculate and explain their value proposition to providers and payers in terms of the Clinical Quality Measures (CQMs) and value-based payment models. This is an emerging challenge for which solutions do not yet exist.

Two approaches are possible:

Using a recognized measure, such as those in the CMS Measure Inventory Tool, has the advantage of having already been vetted across the healthcare community. However, applying these to a specific pharmaceutical or device treatment, as opposed to measuring the quality across a healthcare facility or provider, is somewhat of a new twist.

As an example, this is how it would work for a new vascular catheter technology: a hospital that currently tracks and reports a hospital inpatient quality reporting program measure related to vascular catheter-associated infections could stratify their own risk-adjusted data based on whether or not the patients included in that measure calculation received the new technology. This could be repeated across multiple hospitals, and if the measure was improved for patients that received the new technology, then the treatment’s value could be communicated in terms of the established outcome measure. Capturing a new technology’s value in term of an established outcome measure could be particularly powerful especially since it leverages real-world evidence.

However, in cases where there is not a relevant measure already established, or if a single measure doesn’t capture the full value, what’s needed is a framework to assist device and pharmaceutical companies in determining a treatment’s value to payers, providers, and consumers in a pay for value world. An inclusive framework would consist of multiple diverse elements that support differentiation between treatments, such as:

Cost may be multi-dimensional, including out of pocket (cost per device/dose) as well as deferred and or avoided healthcare cost (OR time, hospital stay length, readmission frequency) and non-healthcare cost (disability, time-from-work).

Outcomes are, in many cases, already being quantified via CQMs. CMS and other payers are interested in improving the connection between drugs/devices and quality measures and there is opportunity for national consensus entities to designate measures specifically related to device and drug treatment quality.

However, it may be the case that interoperability and usability of the device, the security of the device and its data, and the experience that the user has with the device (or the company) can add as much value as the traditional domains of cost and outcomes. Therefore, we must find ways to quantify these elements and weight them appropriately, relying on real-world evidence.

That’s where human-centric design and cybersecurity come into play and what’s critical is that these elements are considered at the very beginning of the investment and design cycle.

Optimizing a framework for multiple stakeholders can quickly become complex but it is doable and it is critically important. To deliver better outcomes at lower prices, we must work together. Drug and device manufacturers can shift the way they calculate and communicate their value proposition to providers and payers by considering established CQMs and developing new value-based payment models.