As stakeholders throughout the healthcare ecosystem continue to transition from a fee-for-service model toward value-based care—and as providers try to keep up while feeling increasingly burdened by paperwork and disconnected from patients—the Centers for Medicare & Medicaid Services (CMS) keeps moving the goalposts.
Providers now have hundreds if not thousands of value-based contracts, but recently CMS proposed a few changes to bundled payment models: Eliminate two models entirely and allow some providers to voluntarily participate in a third. So-called bundled payments are created to tally the costs for entire episodes of care—whether a hip replacement or a coronary artery bypass graft surgery—with any savings below a target set by CMS going to the hospital. However, if the costs exceed the target, then the hospital is responsible for the difference.
CMS’s recent announcement casts a veil of uncertainty over providers’ progress toward value over volume. And now that Tom Price, a vocal critic of the mandatory component of bundled payments, has resigned from his post as the U.S. Secretary of Health and Human Services, providers’ uncertainty has grown: Does CMS’s current proposal have a future? Will more changes be handed down?
Regardless of the specific disruptions at hand, or where CMS ultimately decides to position the goalposts, pharmaceutical companies should continue to demonstrate their own value to providers by partnering with them to help them navigate through the disruptions.
In theory, partnering with customers sounds easy enough, but as many pharma companies know, partnerships in practice are anything but easy to execute. Many pharma companies are struggling to figure out how, where and when they can add the most value. They need to understand where each provider organization is on its journey toward value-based care. Pharma companies also need to figure out how their own commercial organizations need to adapt in order to be capable of partnering effectively with providers—or how to make customer centricity feasible.
Ultimately, pharma companies will need to consider making some wholesale structural changes to break down their commercial silos and serve customers cohesively, and reinventing their go-to-market strategy likely is in order. But in the meantime, here are a couple of ways that pharmaceutical companies can show providers that they’re ready and willing to partner to create value:
- 1. Be present, and listen more. To make the shift to customer centricity and successful partnering, pharmaceutical companies have to be perceptive and responsive to how the changes to bundled payment models are truly affecting providers. To date, pharma companies have succeeded at telling a one-sided story: They’ve translated the findings from their clinical trials into a single (national) value proposition that’s communicated by a handful of tailored messages deployed across several channels including sales reps. But pharma companies need to broaden the conversation by listening to the evolving needs of their customers, and identifying opportunities for mutual value exchange.
Providers such as integrated delivery networks are struggling to keep up with the new demands imposed by the changes to payment structures. As the pharma industry looks to improve provider value, a strong listening capability will be invaluable in generating a strong foundation of customer insights from which pharma companies can build long-term partnerships.
The current rep-as-megaphone approach isn’t effective. Instead, migrating the key account management capability from an account coordinator to an information and insight generator will create a better customer experience and more worthwhile interactions. This approach creates an opportunity to describe the value that pharma companies bring to customers and also helps companies discover new opportunities to innovate for mutual value.
Turn the spotlight on your customer. A sophisticated listening and information-generating capability gives pharmaceutical companies better insight into the challenges that provider customers face, such as difficulties coordinating patient care or encouraging primary care physicians to participate in ongoing oncology care programs. In these cases, pharma companies have an opportunity to create services or assistance programs that benefit patients and providers. Better coordination helps pharma companies demonstrate value to their customers—in the context of provider-specific business models. We’re already seeing this in practice as pharma companies increasingly respond to payer and provider requests to show how products can create value for their patient populations.
Customers’ requests for real-world evidence is another way of them saying, “Show me how your product will work for me.” As IDNs become larger and more controlling, their desire to know how well a pharma company knows them and how its products fit into their needs will grow as well. In response, pharma marketers should rely on the knowledge and insights gleaned by key account managers to tailor a value story for each large customer. The pharma industry can take a cue from other industries here, looking to high-tech, for example, to see how companies are successfully applying the method of using key account managers to drive more of the marketing decisions—but that’s a topic for another post.
As healthcare continues to embrace quality over quantity, providers find themselves at various stages of the journey between fee-for-service and value-based care models. CMS likely will keep moving the goalposts, and providers also will keep facing other disruptions along their journey. This presents an opportunity for pharmaceutical companies to start listening to and addressing providers’ increasingly complex needs—ultimately allowing pharma companies to move beyond supplier mode and become partners in driving and delivering value throughout the healthcare ecosystem.