New legislation will increase access to health care, says DDI

Mar 31 2010

Will the newly signed health care legislation create a major shift in how pharmaceutical brand decisions are made? The bill will increase access to health insurance, but many believe the practice of medicine is already in transition, and the bill signed by President Obama will simply accelerate changes already being implemented.

“The days of payors just accepting or rejecting the various treatment patterns devised by doctors and institutions are ending. The new legislation will increase access to health care, but basing treatment on what's been shown to work will control costs and improve quality.”

A recent New York Times article reported that even before the new Health Care Reform Bill was signed, a 'quiet revolution is transforming how medical care is delivered in this country'. According to the Medical Group Management Association, the majority of physicians, which as recently as three years ago predominantly worked in physician-owned, are now employed by hospitals.

Dr. Ross Weaver, president of DDI, notes, "Medical practices, as corporate entities, are inserting themselves currently into decisions physicians make when deciding what the best care to provide to their patients is. This includes prescribing practices. For pharmaceutical companies, medical practice entities are the new player in town."

Medical practice entities influence individual physician prescribing by negotiating with payors to provide additional payments when an agreed upon percentage of patients in a practice meet specific clinical outcomes. For example, if more than 60% of patients with diabetes have their HbA1C less than 7 mg/dl, the practice receives additional payments. Similarly, if a practice reduces the number of emergency room visits and hospitalizations among their patients with asthma, the practice receives additional payments.

According to Dr. Daniel Hoffman, president of Pharmaceutical Business Research Associates, "The days of payors just accepting or rejecting the various treatment patterns devised by doctors and institutions are ending. The new legislation will increase access to health care, but basing treatment on what's been shown to work will control costs and improve quality."

While this was the original goal of HMOs and managed care organizations when founded back in the 1970s, only recently do a sufficient percentage of practices and payors have the necessary electronic record keeping capabilities to determine which approaches truly lower the costs of care. While many large payors continue to focus on lowering drug costs, regional payors have created niches for their businesses by integrating claims, electronic health records (EHR) and lab feeds into a single database. They have data-metrics analysts on staff whose jobs it is to mine the data, looking for ways to lower the cost of care, not just the cost of drugs.