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What value-based healthcare means for Asia
Value-based healthcare is a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes, which differs from a conventional fee-for-service system where providers are paid based on the treatment services delivered.
By Fredrik Nyberg

As healthcare systems across Asia face pressure from rising costs, many countries are considering a shift towards value-based healthcare (VBHC) policies. This has implications for the medtech industry, which is a key part of the value equation. VBHC is a framework for structuring healthcare delivery models around the primary goal of achieving value for patients. As VBHC gains ground in the region, innovative and collaborative approaches to product development, market access, and commercial excellence will become increasingly necessary.

VBHC policies aim to improve cost efficiencies by rewarding life sciences companies and providers for their overall impact on patient outcomes. They come in many forms, but most seek to compensate healthcare stakeholders when their products and services keep patients healthy and out of clinical care settings—not just when patients are treated. This stands in contrast to more conventional fee-for-service systems, which rewards only the volume of services delivered.

At APACMed, the only association dedicated to providing a unified voice for the medical technology industry in Asia Pacific, we see interest in VBHC growing across the region. While most countries are still working to build the technological and professional capacity to make VBHC a reality, a few are actively experimenting with VBHC pilots. Medical technology (medtech) companies and other industry stakeholders are also getting involved.

“We welcome the opportunity to partner with government stakeholders, providers, and payers to create value-based healthcare programmes that deliver improved outcomes that matter to patients at lower cost,” says Dr Hsien-Hsien Lei, vice president of communications and value-based healthcare at Medtronic Asia-Pacific. “The value of medtech innovation can be measured in relatively short timeframes with clear outcomes.”

Yet despite the theoretical advantages, VBHC policies are still uncommon because they are difficult to implement. They require high-quality healthcare information infrastructure that provides granular data on treatment pathways, patient outcomes, and costs. More professionals with the skills to manage and interpret these data are also needed.

“Value-based healthcare professionals must have a mix of skills in information technology, health economics, government policy, pricing and reimbursement, and clinical affairs,” says Marius van den Berg, Asia Pacific Market Access Director for BTG International. “Talent like this is hard to find and comes at a very high price.”

Progress towards VBHC has been particularly slow in developing countries, where most healthcare stakeholders are focused on improving access to basic care. Yet as ageing populations, rising incidence of chronic diseases and other factors continue to strain healthcare systems everywhere, the need for healthcare financing reform is growing increasingly urgent.

One organisation working to encourage VBHC is the World Economic Forum, which recently launched a Value in Healthcare initiative in collaboration with The Boston Consulting Group that includes many of the world’s leading healthcare stakeholders. In April 2017, they released a major report on the topic and announced plans to develop VBHC pilots around the world. This includes two potential pilots in Asia—one in Singapore and one in the People’s Republic of China.

Further research on global progress towards VBHC can be found in a 2016 study by the Economist Intelligence Unit, which assessed the level of VBHC “alignment” in 25 countries globally, including six in Asia—Australia, China, India, Indonesia, Japan, and South Korea. It also included a case study on Singapore, one of relatively few countries in the region with the technology infrastructure and professional capacity to make widespread VBHC a near-term reality.

A major impediment to VBHC in Asia is the lack of longitudinal data on treatment pathways, patient outcomes, and costs. Yet as regulators, payers, and providers increasingly demand evidence of value in their assessments of new healthcare technologies, many stakeholders are building capacity for data collection and analysis. With more medtech products getting connected to the digital networks that increasingly power healthcare systems everywhere, medtech firms have a growing opportunity to contribute to the data pool.

At APACMed, we are also pursuing initiatives that will support outcomes research and data collection. In February 2017, for example, we released a Consensus Statement on the Future of Medical Device Registries Across Asia Pacific and Middle East-North Africa. Written in partnership with the Medical Technology Association of Australia and MecoMed, the statement provides a roadmap for longitudinal tracking of patient outcomes for medical devices in Asia.

As many Asian countries continue to experiment with VBHC policies and pilots, medtech firms will have to plan for new paradigms of reimbursement that could have a significant impact on their business and operating models. The healthcare industry and other stakeholders must work together to make sure that these changes lead to an equitable distribution of risk and ultimately deliver positive benefits for patients across the region.

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APBN Editorial Calendar 2018
January:
Obesity / Outlook for 2018
February:
Searching for the fountain of youth
March:
Women in Science - Making a difference
April:
Digestive health in the 21st century - Trust your guts
May:
Dental health - The root to good health
June:
Oncology / Biotech landscape in APAC
July:
Water management / Vaccination
August:
Regenerative medicine / Biotech start ups
September:
Digital healthcare / 3D printing
October:
Bones / Breast cancer
November:
Liver health / Top science research nations & institutions
December:
AIDS / Breakthrough of the year/Emerging trends
Editorial calendar is subjected to changes.
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