COVID-19 Pandemic Magnifies Need to Identify Value-Based Payment Reforms for Drugs and Devices

Washington, DC— Although new biomedical treatments have the capacity to save lives and improve patient outcomes, an ongoing challenge is balancing the need for innovation to discover new therapies with  ensuring accessibility for the patients that need them. Value-based payment models for drugs and devices that are similar to those for health care providers could work to address this issue by aligning payments to outcomes, generating more evidence, and providing alternative payment options.

A new paper published by Health Affairs, Paying for Value from Costly Medical Technologies: A Framework for Applying Value-Based Payment Reforms, from the Duke-Margolis Center for Health Policy, with guidance from its Value-based Payment for Medical Products Consortium, proposes a framework for multiple value-based payment models for drugs and medical devices.

Rather than suggest certain payment methods as completely superior to others, the authors argue that a spectrum of value-based payment mechanisms is necessary to address the complexities of healthcare treatment.

“In the midst of an unprecedented pandemic, a clear framework for value-based payment reforms for medical products could help inform crucial coverage and payment decisions for COVID-19 therapeutics and vaccines,” said Dr. Marianne Hamilton Lopez, Duke-Margolis research director, Value-Based Payment Reforms. “This framework gives us the opportunity to clearly define these models, increase their impact when necessary, and foster consistent analysis and assessment for when and how they can be effectively used to make potentially life-saving therapies available to the patients that need them.”

The proposed framework includes input from experts on value-based payment reform, business, medicine, and policy and details four categories of value-based payment for medical products ranging from solely volume-based or value based with value adjustment to value-based linked to outcomes and  those that are population based. The paper also gives insight into circumstances in which each payment model is appropriate for use.

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