Payers have been slow to reimburse for preventive care. Is that changing?
Most health care industry stakeholders consider many options in preventive care to be a good investment, shown to improve health and quality of life while also delivering short- and long-term cost savings for health care systems. But even as many new products and strategies in preventive care have been introduced in recent years, payer adoption and reimbursement for these options is often limited, creating challenges for health care systems and entire communities working to expand strategies in disease prevention.
Our Life Sciences Practice team at CRA recently conducted an analysis of the most common barriers to payer adoption and investment in preventive care measures. In this review we assessed a range of strategies, including vaccination and wellness programs and technologies such as genetic testing, and considered how payer support for different options might change in the years ahead. Currently, there are diverging opinions among payers regarding what should be considered adequate or optimal levels of preventive care. These differing opinions are based in part on the lack of reliable data on the long-term impact of these strategies on health outcomes and health care costs. In a period where more quantifiable data become available, as is anticipated in the next decade, it is likely that payers may have fewer concerns about the longer-term benefits and cost effectiveness of preventive care. This could, in turn, support broader adoption of preventive services and allocation of more funding to these services.
Another factor that limits adoption of preventive care services is the fact that many payers are compelled to prioritize strategies that deliver short-term cost savings when making reimbursement decisions. Preventive care generally targets large patient populations and thus can require a significant upfront investment, which payers see as sub-optimal from a purely short-term economic standpoint. While preventive measures can deliver clinical and economic benefits over the long term, many payers are not willing to wait years to see a return on investment. They are also challenged by an annual budgeting process that requires them to deprioritize measures that involve significant upfront costs with uncertain returns spread out over future budget cycles. The pressure to focus on short-term cost benefits may be even more pronounced in multi-payer systems where patients can move across payers. Many payers may be less willing to invest in longer-term strategies in disease prevention and wellness when the economic benefits are likely to be achieved by a different payer as patients join new health plans.
Challenges in forecasting costs and patient demand can also make it difficult for payers to assess the true budget impact and cost effectiveness of preventive care measures. In one example, payers found that forecasting models used to predict the number of referrals received for the “Healthier You: NHS Diabetes Prevention Programme” in England, aimed to prevent or delay onset of type 2 diabetes, were shown to be inaccurate. After the program launched there were 16% more program referrals than initial estimates,1 indicating that the cost was higher than payers originally forecast.
Research also shows that when payers do prioritize preventive care, many may not be allocating their funds as effectively as possible. On average, nearly 50% of all preventive care spending is allocated to patient monitoring (e.g. routine health or dental check-ups) rather than to immunization programs or technologies that support early disease detection and are widely shown to be more effective approaches.2
Gaps in health care funding are another factor encouraging payers to prioritize measures that deliver nearer-term cost savings rather than cost effectiveness. For example, offering the seasonal influenza vaccine is a cost-saving preventive measure (generating net savings of $68.96 per person in the U.S.) and is widely adopted.3 In contrast, multiple studies indicate that vascular disease health checks are potentially cost-effective preventive measures if applied to the general population, but access is often limited to only high-risk patients.4
Independent global advisors are now advocating that the preventive health care model must operate beyond the limitations of short-term cost assessments favored by many political and health care decision-makers including payers.5 Research from the World Health Organization (WHO) indicates that health care systems are at risk of continued escalation in demand in all forms of care (e.g. inpatient, outpatient, and long-term) if more preventive measures are not implemented. Without the longer-term cost and health benefits delivered by preventive services, patient care including administration of treatment is positioned to remain as the more common and more costly option.6
Most industry insiders agree that by 2030 payers will shift both their mindsets and fund allocation toward preventive care services and that this will accelerate as more data become available. Health care advocates also highlight the need for both government and societal pressure to support payer action. In one example, government advisors in Nordic countries are driving efforts to encourage payers to allocate equal amounts to sick care and preventive care (5% of GDP to each) by 2030.7
More payers may also recognize that many preventive care strategies could be easier to adopt and deliver both health and economic benefits earlier in the years ahead. We are seeing unprecedented levels of innovation in both technology and wellness strategies with programs based on wearable devices, health apps, and genetic testing as just a few examples. As innovation continues to improve access, effectiveness, and compliance, health care decision-makers including payers are likely to push for broader adoption of preventive care programs, especially those that are shown to delay or eliminate the onset of disease and the associated need for treatment among high-risk patients.8
While we have seen progress in recent years, allocation of funding to support access to preventative care now totals only about 3% of overall health care spending. With the development of more targeted and effective preventive solutions, increasing payer willingness to cover them, and growing demand for these services, industry insiders estimate that allocation will increase to 9% by 2030.9 This re-allocation of resources offers the prospect of reduced long-term health care costs and new opportunities to improve health outcomes and quality of life for patients around the world.
Michele Pistollato is an associate principal and Elaine Damato is a consulting associate in the Life Sciences Practice at CRA, based in the London office. Rajini Jayasuriya is a senior associate in the Life Sciences Practice at CRA, based in the Washington DC office. Views expressed herein are the authors’ and not those of CRA or any of the organizations with which the authors are affiliated. The authors wish to acknowledge the contributions of Lev Gerlovin and Neil Turner to this article.
In an open letter, CEO Albert Bouria sought to give clarity to the drug’s development timeline.
The chairman and CEO of Pfizer says the company will seek an emergency use authorization (EUA) from the U.S. Food and Drug Administration (FDA) for a COVID-19 coronavirus vaccine candidate after the U.S. general election.
In an open letter, CEO Albert Bouria sought to give clarity to the drug’s development timeline by giving an update on how the process of testing the drug is going. He says that the company will likely know whether the vaccine is effective by the end of October and will know whether the drug is safe by the third week of November. Finally, the drug maker believes that their manufacturing data, the last hurdle before the EUA can be granted, will be prepared for submission before the safety milestone is reached.
“So, let me be clear, assuming positive data, Pfizer will apply for Emergency Authorization Use in the U.S. soon after the safety milestone is achieved in the third week of November,” Bouria says in the open letter. “All the data contained in our U.S. application would be reviewed not only by the FDA’s own scientists but also by an external panel of independent experts at a publicly held meeting convened by the agency.”
Pfizer isn’t the only company racing to produce a vaccine to hopefully bring an end to the COVID-19 coronavirus pandemic, but some companies have had to hit the brakes on their clinical trials due to unexpected side effects.
Most recently, Johnson & Johnson announced earlier this week that its phase 3 trial was being paused after a trial participant contracted an “unexpected illness.” The company said that such outcomes are common in clinical trials, and stressed the difference between a study pause — which could be a short and only temporary occurrence — and a regulatory hold, which is a formal action by the FDA that can mean much longer delays.
Before that, AstraZeneca was forced to halt its own global clinical trial after an English patient taking part took ill in September. That trial was resumed about a week later after a U.K.-based regulator gave the go ahead.
Data from the COVID tracking project on coronavirus cases, test results and more
The COVID Tracking Project is a volunteer effort to compile federal and state data in regards to new COVID-19 cases, including number of positive and negative tests.
Here’s the latest data, updated on October 16:
Positive tests: 7,939,566
Negative tests: 105,479,593
Cumulative hospitalized: 430,887
Currently hospitalized: 37,308
Patient deaths: 209,340