NAMCP Medical Directors Institute’s
“Value Based Care Council”
Executive Director: Michael A. Ford, RPh
NAMCP understands the changing landscape with regard to the delivery of healthcare is moving from traditional fee for service to more of a focus on value based care and all of the omplexities therein. In that pharmaceuticals are the mainstay of the treatment plan or therapy for most medical conditions, the association made the decision to move forward with an initiative to work with Medical Directors and other stakeholders to improve medical outcomes not only through the more effective utilization of pharmaceuticals, but medical devices and diagnostics alike.
“We believe the work you’re doing is important and
are excited to continue collaborating.”
Steven Pray – Director, Channel Marketing
Novartis Pharmaceuticals Corporation, US Oncology
To increase the competency and sophistication of payers and medical directors in their efforts to more effectively and efficiently extract and leverage the value of pharmaceuticals, medical devices, and diagnostics.
The council works with Medical Directors to develop solutions, including, but not limited to standardized tools and resources to assist in the more effective extraction of value from their product spend so as to optimize medical outcomes
Quadruple AIM Goals
The council is dedicated to assisting Medical Directors with the achievement of the Quadruple AIM goals of improved outcomes, improved patient satisfaction, reduction of medical costs, and improving the work life of health care providers.
The focus of the council will be on product value, adherence and persistency, strategies and methodologies to effectively leverage value of product spend, and the critical components of value based contracts for products. In addition, the council will explore and discuss other value based care landscape issues and develop projects such as analytical studies and white papers that drive better informed policy, coverage and healthcare delivery.
Tools and Resources
Value Based Contracting For Pharmaceuticals And Other Products – A Call For Business Culture Change
The mission of the Value Based Care Council (VBCC) of NAMCP is to help medical directors become more effective and efficient at extracting value from their spend on products. This mission is in alignment with the overarching mission of NAMCP to transform knowledge into improved outcomes by providing education and resources to medical director from purchasers, plans, and provider systems.
In short, a value based contract for a pharmaceutical or other product is where costs for the product are tied to results, the more effective a drug, the more a payer will allocate for that drug. Through a market survey conducted by NAMCP on value based contracting for products along with subsequent interviews with Medical Directors and a search of the literature, it is clear there is a need for a change in current business culture in order to be able to fully capitalize on value based contracting for products so as to improve outcomes and reduce overall costs.
Survey results show that 5% of employers and 26% of health plans are using Value Based Pharmaceutical Contracts (VBPCs). An additional 7% of employers and 18% of health plans are in the negotiation stages for VBPCs. This means that overall, less than one fifth of employers and less than half of health plans are using or in the process of negotiating a VBPC. In addition, just 12% use value based contracting for specialty drugs (usually the most expensive treatments) and fewer than 1% use them for more common drugs. Potential benefits of VBPCs include reduced risk and uncertainty around the performance and financial impact of a product for payers, improved outcomes and reduction in overall costs, opportunity for product differentiation for manufacturers, and improved access to new medication for patients.
In light of the above, the shift from traditional volume and market share driven contracting to value based contracting requires integration of the contracting process into comprehensive medical management which subsequently needs a change in business culture in order to support this same shift.
In the effort to support both the mission of the VBCC and NAMCP, the council is sharing the following resources to assist stakeholders in moving forward with their efforts to address business culture change so as to better be able to accommodate value based contracts for pharmaceuticals and other products.
OORCA – Organization for Objective Review and Clinical Assessment
In 2021, the medical leadership of the Value Based Care Council (VBCC) of the National Association of Managed Care Physicians (NAMCP) uncovered an unmet need and requested that an objective third party be created whereby the value propositions of products such as pharmaceuticals and medical devices could be assessed for both credibility and objectivity based on the evidence. The goal is to provide the marketplace with such an objective entity which would help bridge the trust chasm between manufacturers and payers / customers through the provision of such an assessment. This assessment is not an endorsement of a product, but affirmation as to the viability of the product claims made by a manufacturer based on the supporting evidence. This is distinctly different from other value assessment frameworks as this process does not assess the value of a product and has nothing to do with price. The VBCC agreed that function is up to each payer organization to determine the value of a product to their respective membership. The Organization for Objective Review and Clinical Assessment (OORCA) on the other hand, provides affirmation from an objective third party as to a product’s value proposition that will be helpful when payers evaluate a product.
Once created, OORCA was charged with conducting an initial assessment whereby the infrastructure, methodology, and processes would be pressure tested with the VBCC reviewing and providing input / feedback for improvement along the way. Over the last two years, the approach of OORCA was refined based upon this same feedback and now utilizes the Value Proposition Customer Engagement Short Form (as previously developed and approved by the VBCC and found on this website) for the submission of information for assessment. The assessment is predicated upon evidence and information submitted by the manufacturer with a methodology / process to review the four domains of efficacy claims, safety claims, economic claims, and other patient outcomes or product attribute claims with criteria established for these domains. Once completed, a final report is generated with regard to the final assessment. OORCA’s inaugural assessment was conducted for iRhythm as to the value proposition of the Zio device with the full assessment report found below.
Please click here to view the full report:
NAMCP VBPC Overview Guide
NAMCP continues to provide education, tools, and resources to assist its membership and the marketplace. The current focus of the Value Based Care Council (VBCC) of NAMCP is on value based pharmaceutical contracts (VBPC) and how to assist all stakeholders with their respective efforts to transition from traditional benefit management strategies to those that enhance / improve outcomes while reducing overall medical costs. Value Based Pharmaceutical Contracts are part of that transition and through the survey of health plans and industry regarding VBPC, meetings of the VBCC, and internal discussions – it is clear there is a need for education regarding VBPC.
While the VBCC created an introductory webinar on this topic (found on this same page below), this tool (NAMCP VBPC Overview Guide) is a one pager (front and back) that should be used for internal discussions within any organization that is entertaining the thought of negotiating a VBPC. It conveys what a VBPC is along with the principles of a VBPC and what comprises a first and second generation contract. The principles of this tool also apply to similar contracts for medical devices and diagnostics. Not everyone within an organization or affiliated stakeholders are familiar with VBPCs and are in need of education in order to increase their competency so as to be better informed during the decision making process. Functional areas to consider including, but are not limited to pharmacy, medical, contracting, provider relations, utilization management, as well as external stakeholders such as provider groups, etc.
Future plans for the VBCC include the provision of education on the intricate details as to the “how to’s” of implementing a VBPC.
Value Based Contracting for Products Webinar
The VBCC continues to support the mission of NAMCP to transform knowledge into improved outcomes by providing education and resources to medical directors from purchasers, plans, and provider systems. To that end, please avail yourself of this one hour CME accredited webinar entitled “Value Based Contracting for Products, The Future is Now, What Medical Directors Need to Know”.
In this webinar, you will hear about the historical perspective of benefit management strategies for products, the status of these strategies today, and then a look at strategies of the future inclusive of value based contracting and how to create that same future.
Please join Dr. Terry McInnis MD, MPH and Michael Ford, RPh, both who have experience in the Payer, PBM, Employer, and Pharma spaces when it comes to benefit management strategies. They provide an introspective and insightful overview as to why and how healthcare needs to embrace value based contracting for products in order to truly optimize care for the patient while reducing overall costs. These are paramount in obtaining the quadruple aim.
Value Based Contracting Survey
NAMCP was selected to co-present at AMCP’s 2023 annual meeting in San Antonio on March 23rd. Michael A. Ford, RPh, the Executive Director of NAMCP’s Value Based Care Council (VBCC), along with Jane F. Barlow, MD / MPH / MBA, the EVP and Chief Clinical Officer of Real Endpoints presented the results of the recent 2022 value based contracting survey as published in the Journal of Managed Care Medicine in January of this year entitled “Major Trends in Innovative Contracting: A Survey of Payers and Industry”. This survey was a collaborative effort between NAMCP and Real Endpoints.
There is a lot of discussion and negotiation regarding value based contracts / agreements between payers and drug, device, or other industry manufacturers, however – many of these don’t result in implementation and this survey was focused as to the challenges, barriers, and opportunities therein, from the perspectives of both payer and industry.
The good news is the survey shows there is significant alignment upon which to build. Payers and industry agree that standards for VBCs are important and that better data measurement tools are needed. Also cited were needs from both payers and industry for education as well as opportunities to build internal commitment towards these types of contracts.
We are optimistic that change is coming! While third parties with the needed data and IT expertise are showing up in the marketplace, the VBCC of NAMCP continues its commitment to provide education regarding VBCs to both payers and industry in support of the overarching mission of NAMCP.
You can read the full report here and / or watch the webinar, as well as continue to monitor this website for additional education, tools, and resources to help accelerate the uptake of these innovative contracting opportunities.
In response to a agreed upon unmet need in the marketplace, the Value Based Care Council developed a short form in order to enhance the effectiveness and efficiency with which product value propositions can be shared between industry and the medical leadership of various payers throughout the country. This same short form provides a concise and consistent manner with which product value propositions can be shared while also providing the ability to align expectations prior to actually conducting conversations or having a meeting regarding a product or service.
This form is to be utilized by the customer as an unsolicited request to industry. It contains guidance for industry as it pertains to the customer, as well as the form allows for a response to be a maximum of 3 pages.
For more information, please contact NAMCP at 804-527-1905 or email email@example.com