I recently interviewed Adrian Thomas, vice-president of Global Market Access, Commercial Strategy Operations and Global Public Health at Janssen, a pharmaceutical company, about the implications of value-based healthcare for health systems and pharmaceutical companies.
Could you give a brief definition of value-based healthcare?
Adrian Thomas, Janssen: People tend to define value-based healthcare as buying outcomes at the value they bring to the healthcare system in terms of cost effectiveness and comparative value, but we need to take the concept in its broader sense, that is, the investment and activities in healthcare that benefit society.
Within this broader view of value-based healthcare, there are at least three separate areas to consider when assessing value: the impact on the healthcare system (the value per health outcome, such as quality life years -- a measure of the state of health of a person of group -- gained); the impact on society itself (the impact of healthcare on caregivers and employment for example); and how healthcare is valued culturally (for example we see marked differences in the way mental health is viewed around the world).
How do health systems consider value and how, if at all, does that understanding need to change?
Health systems in developed countries, such as the UK or Australia, typically only consider value in healthcare from a cost-effectiveness perspective. But they should include broader societal benefits as well, which are not currently considered, or less weighted, in cost-effectiveness assessments. In low- and middle-income countries, individuals, who typically have to fund the majority of their healthcare costs personally, are more likely to have to balance healthcare against other priorities.
Whilst it is true that there is a general trend towards some establishment of universal health coverage in many countries, the gap between what is covered and what is needed is typically still a major obstacle and it is the individual who must deduce the value of their own healthcare.
What are the challenges associated with implementing value-based healthcare?
Everyone agrees with value-based healthcare in theory, but one of the biggest obstacles to its implementation is the way that budgets are siloed—based on costs rather than value. New Zealand’s healthcare system is based on health technology assessment (technology used to inform the formulation of safe and effective health policies), but in practice operates like a “one in, one out” budgeting process whereby if you benefit from a medical intervention, another area of priority may be sacrificed in order to pay for it. We need to think of healthcare as an investment priority rather than as an aggregation of costs.
Are pharmaceutical companies in particular shifting corporate strategies to cope with value-based healthcare?
Most large pharmaceutical companies are already adapting to value-based healthcare. Janssen’s view of market access is driven by demonstrating the value that the company's products provide to healthcare systems.
Janssen has an evidence -based strategy designed to show value, and the market access teams include policy and economic research professionals who help to shape the design of clinical trials. Where possible, Janssen is seeking broader collaboration with governments, academics or other partners in an attempt to move away from a purely competitive system (based on costs) and derive more value for patients
Which countries are leading the way in value-based healthcare?
In low-income countries, there is a clear view of healthcare as a driver of economic and societal growth. There is also recognition in a number of countries, such as the Gulf States, that social and political stability is heavily dependent on the quality of healthcare infrastructure and access to healthcare.
The concept of value-based healthcare has not been universally adopted by many of the upper-middle-income and high-income countries, however, and many of these countries still focus on costs. Despite recognising the value of health technology assessment (to reward innovation and improvements, these countries price products based on pricing in other countries rather than on the products’ broader societal benefits
Governments and society need to recognise that equitable access to healthcare should be maximised by assessing the value and impact of healthcare innovation rather than only seeking to minimise costs.
This interview is part of a series managed by The Economist Intelligence Unit for HSBC Commercial Banking. Visit HSBC Global Connections for more insight on international business.
