Can Pharma support the Accountable Care Model?

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The CEO of Starbucks once quipped that the company spends more on healthcare than it does on coffee beans. If this statistic is real or not, we can’t attest. But the reaction of most that hear this is “well, that makes sense.” Health care costs are out of control and the CEOs comment is a sad note on the current state of healthcare in the US.

The Affordable Care Act was put into place to address the skyrocketing costs of health care in the US. But what does it mean for the pharmaceutical industry? We can’t answer this question without first understanding the three major components of ACA that impact the pharmaceutical industry.

1. Accountable Care Organizations – voluntary initiatives that aim to reduce costs and improve patient outcomes by rewarding groups of health care providers and hospitals that band together to holistically treat Medicate patients in a coordinated fashion. When ACOs reduce costs and improve patient outcomes, they can share in the savings.

 2. The Health Insurance MarketplaceGlobalData estimates that the Affordable Care Act will bring in $115 billion in business over the next 10 years. In fact, Medicaid enrollment alone is estimated to increase by 19.5 million people. In total, 32 million new customers are expected.

3. Improving Quality while Lowering Costs – In its continual focus on outcomes and value, the government will pay physicians based on value, not volume. A new provision will tie physician payments to the quality of care they provide. Physicians will see their payments modified so that those who provide higher value care will receive higher payments than those who provide lower quality care.

The Affordable Care Act is influencing all aspects of the pharmaceutical industry’s value chain – from R&D to sales and marketing. It’s a matter of time until the shift takes place to value based payment models. Pharmaceutical companies need to be tied into supporting this model through the right outcomes studies, analytics and pricing. Is your organization ready? How are you preparing? We created this free whitepaper to help you address these questions.

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