The Patient Equation

14Value-based Reimbursement

For too long, our reimbursement systems have been driven by what we do, what we make, and what we sell—and not whether a treatment works, or how effective it turns out to be. The truth is—and you probably realize this by this point in the book—our ability to measure value in health care has been limited until recently. We could track gross measures like survival rates across populations, but there's a big difference between surviving in a hospital room, with limited quality of life, and surviving at the baseline level established before an illness hit. We could also track individual patient outcomes in detail, but that data remained trapped within each individual's chart, not connected to or compatible with an integrated view of outcomes for patients like them.

The future of medical reimbursement is all about value—from a broader perspective than just survival—hinging on the integration of the details of individuals. Incentives for pharmaceutical companies and device manufacturers are changing as we realize we can measure more. We can measure whether something is working for each patient, and how much it is working—and we can move patients from treatments that don't work to treatments that do.

Moreover, in a value-based world, the calculations can go far beyond each individual. Data can give us the ability to make convincing arguments for regulators to let our drugs and devices enter new markets, give us new paths to approval, and new ways to value ...