Value Based PurchasingSummary: In this article we will discuss Value-Based Purchasing and how it impacts the Pharma industry in particular.

According to an issue brief by Deloitte Center for Health Solutions, Value-based pricing for pharmaceuticals: Implications of the shift from volume to value, a shift in risk is occurring in the pharma industry as a result of healthcare legislation, culminating with the Affordable Care Act (ACA). The ACA was designed to increase quality while decreasing healthcare spending. All of the provisions, including value-based purchasing, are designed to achieve both of these goals.

Value-based purchasing is not actually a new concept. CMS has been piloting different initiatives since 2003 and has experienced great success. Early results obtained for the first three years with the Physician Group Practice Demonstration showed $25.3 million in Medicare savings as well as elevated composite quality scores. The ACA provisions related to value-based purchasing became effective in 2013 with the following goals:

CMS has also created steps along the way as providers shift from fee-for-service to fee-for-value such as Accountable Care Organizations (ACOs) , comparative effectiveness research, evidence-based medicine, and bundled payments. These delivery systems begin the risk shifting process, the collaborative efforts, and the emphasis on quality/value, and a method for reducing healthcare spending.

What is Value in Terms of Value-Based Purchasing?

Value is one of those relative terms that have different meanings to different individuals or groups. In general, we have the following definitions so the first step in any value based purchasing agreement is mutually deciding on what value is.

Trends Leading up to Value-Based Purchasing for Pharma

Things to Consider with Value-Based Purchasing:

The process of shifting from volume to value is not one that can occur over night. There are many decisions to be made, many processes to be created, and infrastructures to be designed and implemented. If you are in need of assistance in learning more about these new delivery systems, how to implement, or how the ACA can and is affecting your organization, please contact us – BHM Healthcare Solutions 1-888-831-1171 or re*****@de*.com or click below to request additional information or a complimentary consultation.

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