AMCP Partnership Forum: Integrated Delivery Networks’ Role in Pharmaceutical Value-Based Agreements

Abstract

Health care payment models that reward value over volume have the potential to improve patient care and control rising costs. These payment models are increasingly being implemented by a range of care delivery providers in the United States. Integrated delivery networks (IDNs)—systems of providers and sites (e.g., group practices and hospitals) that care for and provide health care services and health insurance plans to patients in a specific region or market—present special opportunities and challenges for value-based care and represent an important sector for the advancement of value-based models.

Successful implementation of value-based agreements in IDNs requires a range of complex capabilities, including advanced data analytics, population health management solutions, comprehensive care management, and successful patient engagement. To address these and other operational issues, the Academy of Managed Care Pharmacy convened a stakeholder forum on November 13-14, 2018, in Baltimore, MD. Forum attendees addressed topics including (a) the current delivery of value-based care in IDNs; (b) opportunities and barriers to implementing pharmaceutical value-based agreements; (c) recommendations for IDNs to reach the full potential of value-based agreements; and (d) opportunities for collaborations among managed care organizations, accountable care organizations, and IDNs to improve health care outcomes.

Thought leaders with a wide range of backgrounds attended the forum, including those representing patients, payers, providers, government, and biopharmaceutical companies. The forum was sponsored by Amgen, Boehringer Ingelheim, Bristol-Myers Squibb, Genentech, Lilly, MedImpact, Merck, National Pharmaceutical Council, Novo Nordisk, Pharmaceutical Research and Manufacturers of America, Takeda, and Xcenda. This proceedings document presents common themes and comments from individual participants at the forum, which are not necessarily endorsed by all attendees, nor should they be construed to reflect group consensus.

Value-based agreements (VBAs; sometimes called value-based arrangements) are collaborations that aim to improve the quality of care while controlling costs by incentivizing the use of cost-effective treatments that improve the value of care.¹ Participants in VBAs can involve 2 or more parties, such as payers, pharmaceutical manufacturers, providers in integrated delivery networks (IDNs), and other third parties. These arrangements shift the risk for control of some health care decisions from payers to providers. A typical arrangement identifies baseline health care costs for specific conditions or populations and then allows the parties to share savings that are generated when improved quality of care reduces the overall cost of care.^1,2

IDNs are shifting the focus in care delivery models across the United States from inpatient services to more comprehensive services for total patient care.³ These networks provide a continuum of health care services including hospitals, medical offices, and pharmacies. IDNs differ from each other based on variables such as organizational and management structures, as well as complexity and risk profiles. There are various provider groups within IDNs, and some, such as accountable care organizations, share risk for their patient populations. Some VBAs are currently in place within IDNs for certain populations or products.³ However, scaling these types of arrangements across different networks remains a challenge.

Logistical challenges can hinder the development and implementation of VBAs. For example, defining and determining value can be difficult and is complicated by the need to consider what is of value to patients. Additionally, VBAs rely on effective integration of patient care data from multiple sources (e.g., primary care, pharmacy, specialty pharmacy, and laboratory); however, limited interoperability hinders access to data analytics necessary to support coordinated care. Legal and regulatory requirements (e.g., the Anti-Kickback Statute and Medicaid Best Price rule) can limit the use of certain strategies that could potentially improve care coordination and patient outcomes. During a stakeholder forum, convened by the Academy of Managed Care Pharmacy (AMCP) on November 13-14, 2018, in Baltimore, MD, participants explored these issues and brainstormed possible solutions.

Types of Value-Based Agreements

Participants explored various VBAs—including risk-sharing value-based contracts, coverage with evidence generation, and shared accountability contracts—and discussed their perspectives of the pros and cons of each type of contract for IDNs (Table 1).

TABLE 1.

Participant Perspectives on Selected Types of Value-Based Agreements

Type of VBA	Pros	Cons
Risk sharing	Performance on outcome measures should be readily identifiable if the IDN has integrated data Could have positive or negative financial outcomes	Complexities associated with distinguishing between medical and pharmacy benefits Need a certain population size Limits selection for providers Legal barriers Challenges capturing data and ensuring interoperability
Coverage with evidence generation	Generation of practice-specific evidence Allows for incorporation of patient-reported outcomes Population is more clearly defined Opportunity for more personalized outcomes Opens up access Could be beneficial for self-insured employers Allows for flexibility/adjustments as evidence is generated	Higher risk Opportunity costs Could be limited by FDA indications
Shared accountability	Need to have the right partners involved (payers or manufacturers) Focus on the entire patient population drives population health activities Patients supported throughout the continuum of patient needs Proactive patient targeting	Increased complexity and resources Need for data sharing Potential legal barriers depending on VBA design

FDA = U.S. Food and Drug Administration; IDN = integrated delivery network; VBA = value-based agreement.

Risk-sharing value-based contracts allow for manufacturers to demonstrate the value of their products and allow payers to gain experience with the products. However, it is important to consider whether providers will have to follow set prescribing patterns that could limit options for patients. These contracts also require significant infrastructure to effectively monitor and track individual patient outcomes.

Contracts based on coverage with evidence generation are best suited to address questions that remain the subject of research. In some cases, such arrangements may be limited to U.S. Food and Drug Administration indications for a product and may impede or prohibit off-label use. On the other hand, coverage with evidence generation contracts may improve access for patients if they allow for coverage for off-label indications. Because there are more unknowns related to product performance with these types of contracts, manufacturers are often cautious due to concerns about the potential for a poor outcome.

Contracts that focus on shared accountability increase complexity and may not be an appropriate initial contract type. These contracts offer the opportunity to positively affect patient care by using additional supports. For example, wraparound services (e.g., transportation and behavioral supports) can address a wide range of patient needs. Similarly, bundled service contracts (e.g., those that incorporate payment for additional supports into the overall compensation) can be very complicated. Of note, expanded levels of patient support may require changes in workflow that are difficult to implement without temporarily affecting care delivery.

Some VBAs are designed to incentivize providers to follow clinical practice guidelines and encourage the redesign of workflows to optimize the use of best practices, such as those identified in clinical practice guidelines. However, participants noted that, in contrast to static practice guidelines, innovative VBAs can be designed to provide information that helps evolve care delivery through identifying emerging practices with promise. Importantly, participants also stressed that workflow redesign can require substantial labor and resources; staff augmentation and coaching may be needed to facilitate changes in care delivery. Financial incentives that support changes may be a mechanism that supports these resources.

Considerations for Developing and Advancing Value-Based Agreements

Participants discussed strategies for stakeholders to prepare for the evolution of VBAs in IDNs. They stressed that part of the value that emerges from VBAs is the information they may provide about the performance of a treatment in the real world. However, participants also acknowledged that cost is an important driver and that it will be important to ensure that arrangements support the delivery of cost-effective care.

There is substantial variability in strategies for initiating VBAs with IDNs. This level of variability stems from the differences in the systems of care among IDNs, each entity having its own distinct population, and individual products having unique features that may influence terms of the agreement. National payers and manufacturers are challenged to develop contract terms that can account for this diversity among IDNs.

However, lack of standardization or common templates make it more complicated for creating agreements and determining how they will operate. To address this need, participants recommended that manufacturers develop flexible contract templates that could be adapted to meet specific needs and align with priorities of IDNs.

Regardless of contract type, participants recommended starting with smaller, simpler pilot initiatives and then building the complexity of contracts as systems mature and become more sophisticated. Initiating pilot programs that are feasible with existing resources, identifying and addressing issues, and then using what is learned to identify resources needed to expand is a useful strategy. As programs develop, contract terms and metrics can become more sophisticated. Determining whether findings from small populations are replicable and generalizable to larger populations, if the contract is integrated across a network, could be a goal for future VBAs.

Contracts related to supporting medication adherence in ambulatory patients were suggested as a relatively simple starting point. For example, determining whether an intervention improves adherence and results in reduced hospitalizations could be the premise for an initial contract. Of note, contracts that improve appropriate medication use could increase pharmacy spending while decreasing overall costs. While this concept is of interest across stakeholders, potential legal barriers exist, such as the potential for such arrangements to be interpreted as inducement.

Identifying the patients who are appropriate for inclusion in a contract is also an important step for developing an effective contract and is an important consideration when selecting treatments for both chronic population-wide conditions and for rare conditions. Participants recommended the use of data analytics to first identify the population for inclusion and then to characterize their risk for poor outcomes.

Some participants proposed initiating contracts with specialty populations because they believed metrics may be easier to define for these groups. Others noted that contracts for rare conditions can be challenging when only a few patients within the IDN may have the condition. Creating centers of excellence within more sophisticated IDNs to offer specialized programs for certain diseases was suggested as a solution.

The need to allocate resources to develop, implement, and administer effective contracts is also a barrier, particularly when IDNs face significant pressures to operate efficiently, financially, and continue to provide optimal care to patients. Participants noted the challenges inherent in requiring structural change in the daily activities of health care providers to implement value-based care. Providers may need to change their workflows to manage new responsibilities while simultaneously working to ensure delivery of optimal care, which can hinder implementation of new initiatives.

Strategies to support successful collaborations and improve administrative and clinical results were explored. Participants addressed several topics including data sharing, legal and compliance issues, managing risk, and informing and reporting (electronic health record use) issues. Potential considerations that were identified and proposed by participants are presented in Table 2. Participants also engaged in detailed discussions regarding goal alignment within VBAs, defining metrics, and effectively utilizing data to support VBAs.

TABLE 2.

Considerations for Addressing Needs for Successful Value-Based Agreements

Needs	Strategies
Data-sharing issues
Identification of needed data	Use predictive analytics to identify at-risk and outlier populations for designing interventions Identify appropriate time frames to analyze data for the intervention being assessed Measure variability in the provision of care by different providers within the system to establish targets that are appropriate for the VBA Ensure adequate infrastructure to integrate and access data as needed for contracts Provide access to internal and external benchmarks as a baseline for contracts when historic trend data are insufficient
Provisions for data sharing	Use unit cost caps for budget predictability Develop trust and transparency by identifying data elements to be recorded and shared among the partners to the contract (ensure HIPAA compliance) Consider including terms in the contract that allow the ability to terminate contracts based on data issues
Role of value-based partners to support costs	Conduct a preliminary analysis based on real-world evidence and past positive experiences Utilize external benchmarks Provide adequate in-house resources
Legal and compliance issues
Sharing data externally	Determine limits regarding which types of data may be shared with downstream vendors
Use of data in VBA contract	Stakeholders could collaborate to clarify and standardize regulations and policies in contracts
Need for well-informed legal advice about VBAs	Facilitate education about VBA requirements for legal and regulatory compliance personnel Consider a certificate that attorneys can earn to demonstrate competence regarding VBA requirements Collaborate with other associations (e.g., American Society of Pharmacy Law, American Health Lawyer Association, Food and Drug Law Institute) to develop educational initiatives Ensure that individuals who have the authority to approve contracts are involved in their development
Stakeholder knowledge	Raise awareness and understanding about VBAs among stakeholders through educational initiatives Facilitate stakeholder collaboratives to formalize definitions and create templates for VBAs
Legal and regulatory barriers	Advocate to CMS to address issues related to Medicaid Best Price and the Anti-Kickback Statute and create safe harbors
Managing risk
Variation in clinical outcomes	Focus on outcomes that are supported through clinical evidence Determine appropriate time frames for various outcomes, including leading and lagging indicators (e.g., A1c outcomes have a shorter time frame than amputations)
Variation in network provider performance	Include provisions in the contract that recognize and address variation among providers Include provider benchmarking and align incentives to change provider behavior Consider which stakeholders are responsible for changing provider performance
Variation in the population of interest	Determine whether to use a fixed or evolving cohort (i.e., can new patients join after the contract is initiated?)
Other	Potential for paradigm-shifting treatments to be approved during the term of the contract Changes in legal and regulatory requirements during the term of the contract
Informing and reporting
Emerging best practices	Electronic prior authorization processes Care pathways to identify gaps in care Data transfer to provide immediate feedback to providers about conditions and medications
Partners and roles	Determine how data from EHR systems will be transferred to payers and ensure it is transferred in a useful format Integrate data into a single platform that can be queried efficiently Manufacturers can provide tools and resources, including patient programs with care managers and related services Consider integration of the manufacturers’ care management program with IDN services
Restrictions	Privacy/HIPAA limitations for data sharing Including more than 2 parties in an arrangement complicates data sharing Need to build trust

CMS = Centers for Medicare & Medicaid Services; EHR = electronic health record; HIPAA = Health Insurance Portability and Accountability Act; IDN = integrated delivery network; VBA = value-based agreement.

Aligning Goals and Resources Within Value-Based Agreements

Participants stressed that goal alignment among parties to the contract (payer, provider, and manufacturer) is key for the collaboration to be successful. However, aligning goals for VBAs with the needs of each party can be challenging. For example, some parties may place a greater emphasis on cost than others or may be focused on specific time frames to achieve their goals. Additionally, because patients often switch health coverage, payers may be more interested in short-term benefits than IDNs, who are likely to care for patients over longer time periods. Stakeholders should communicate early and often to identify goals and work to align them prior to contract execution.

Because each IDN has its own treatment population, perceptions of value, strategic necessities, and contracting will need to be flexible and evolve to meet changing stakeholder needs. For example, social determinants of health may play a greater role for some populations and may be identified as a goal that requires additional supports to develop effective interventions for some contracts.

Physician payment under alternative payment models (APMs) was identified as one way to drive successful contracts. Participants recommended developing contracts that help physicians meet APM performance measures as a strategy for aligning incentives. For example, screenings are often considered in performance measures and could be specified as a component of care processes in contracts.

Participants also discussed the importance of patient engagement and the need to address health literacy so that patients can be well-informed, active participants in their health care. They suggested adding resources, such as coaches, to support this goal. Additionally, well-informed patients are better able to participate in goal setting and shared decision making in support of outcomes that are personally meaningful.

Defining Metrics

The current proliferation of quality measures is a challenge. Metrics are not always well defined, and even widely used metrics (e.g., hemoglobin A1c) are not always reliably captured and recorded. Metrics used for VBAs often differ from metrics required for other programs, such as HEDIS measures or Medicare star measures. Several participants believed that VBAs can play an important role in driving the standardization of metrics. Standardizing measures across payers and providers is more efficient, but opportunities to capture nuances or information of interest to individual stakeholders may be lost. For example, patient-reported outcomes are becoming potential endpoints for contracts but are often less well defined and more difficult to collect.⁴ Ultimately, participants called for metrics in VBAs to be carefully developed through a collaborative process with all parties to the contract to ensure that each understands the parameters and risks associated with the VBA.

Data Integration for Optimal Outcomes and Reporting

Developing the infrastructure needed to support effective and efficient access to data is critical for supporting VBAs.⁵ Participants noted that effective data management is not only important for analyzing the parameters of the contract, but also for providing actionable information to providers and patients at the point of care.

Participants explored a range of issues related to data capture for contracts. They noted that one of the potential advantages of IDNs for VBAs is that data are typically more integrated within an IDN than in other types of care delivery systems, making it easier to identify and track outcomes. Participants observed that there is substantial variability among IDNs in terms of the sophistication of their ability to access and analyze data and that the data management landscape is rapidly evolving.

Some IDNs utilize data warehouses or data “lakes” that allow for claims-based data analysis to assess care delivery and perform predictive analytics. These data warehouses provide an opportunity to analyze outcomes related to a wide range of variables and metrics. Data warehouses with sophisticated search capabilities can be a valuable tool for identifying patients who are appropriate to include in a contract. Sophisticated search capabilities (e.g., ability to identify biomarkers in databases) may be particularly important when identifying patients for contracts based on precision therapeutics.

Participants also discussed strategies for using data to improve patient care (e.g., improving care coordination and patient engagement). Collecting and sharing data about the costs of care in real time with patients and providers to support clinical decision making can help address total costs of care. With regard to metrics, some participants noted that while most IDNs have robust information management teams, they may lack the resources to analyze exploratory measures. Therefore, they typically prefer to use existing metrics when assessing available data to develop VBAs.

Even when an IDN has a sophisticated data warehouse, an important caveat is that challenges remain with data access and integration when collecting data across platforms (e.g., pharmacy and medical), and it can be complicated to analyze data across these platforms. Additionally, data warehouses often are missing some sets of data, such as those that arise from home care or care delivered by providers outside of the IDN. For example, if a patient receives a limited distribution medication from outside the IDN, the use of that medication is beyond the control of the IDN. In addition, in some cases, IDN providers may wish to refer a patient to a provider outside the IDN.

Furthermore, other parties to a VBA (e.g., payers) can also utilize customized data systems, and access and integration for these sets of data must also be considered. The need for developing trust to allow data sharing among various parties to a VBA was identified as a key issue when determining how to administer a contract. Participants noted that entities may be willing to have their data audited to administer contracts, but they do not want to send their data outside the organization.

A Look to the Future: Supporting the Development of Value-Based Agreements

Participants recommended several approaches for stakeholders to support VBAs, including activities for AMCP. Participants viewed AMCP as having a central role in fostering stakeholder collaborations and facilitating the development of educational initiatives. Participants brainstormed items that they believed would be valuable to include in a toolkit related to VBAs (Table 3). They proposed the creation of some form of matchmaking service that would allow entities that are interested in entering a VBA to enter their information. This service would also allow entities to search the characteristics, goals, and needs of other entities to identify potential partners who could be a good fit for developing a VBA.

TABLE 3.

Elements to Include in a Standardized Value-Based Toolkit

Element	Details
Definitions related to value	Develop agreed-upon list of terms with definitions for value, total cost of care, and related terms
Standardized measures	Development of value measures that align with needs of multiple stakeholders
Health information technology support	Develop pathways of data flows to populate, and utilize data lakes in support of VBAs Standardized datasets for inclusion in contracts to allow for consistent analytic models Recommendations for how to analyze data
Functional timeline	Outline of necessary steps for developing a contract, the order to follow, and the amount of time to allot for each step
Contract development	Checklist of sections to include in a contract and/or sample language or templates for agreements that address various types of value and time horizons Include transparency checklist regarding the types of information that should be disclosed
Self-assessment tool/readiness scorecard	Allows stakeholders to assess their level of readiness for developing an agreement, including assessments of human resources, infrastructure, and data
Tool for assessing partners	Allows stakeholders to assess whether a potential partner has abilities that align well with organizational needs
Value-based deal exchange	Database of emerging practices that can be shared among stakeholders
Educational resources	Educational materials about VBAs that can be used by a range of entities and individuals, including materials that can be integrated in schools and colleges of pharmacy Potentially develop a certification related to VBAs
Case studies	Real-world examples of VBAs including best practices for operationalizing contracts for various stakeholders

VBA = value-based agreement.

Participants recommended ongoing collaborations among stakeholders to support the advancement of VBAs, including educational activities for stakeholders. On a policy level, participants indicated that there are several legislative and regulatory issues that affect VBAs. Participants supported advocacy to address these issues and saw this as an important role for AMCP. They also suggested other potential advocacy activities for AMCP, such as the development of policy statements regarding VBAs and creating a committee of key opinion leaders to guide ongoing efforts.

Finally, participants stressed the need for transparency in building trusting relationships among stakeholders. Honest, transparent sharing of information allows parties to a contract to engage in a manner that aligns with each organization’s goals. Open communication throughout the contracting process supports the creation of successful contracts based on each entity’s needs (e.g., population needs, risk tolerance). It also allows each entity to develop a reasonable assessment of which entities will create useful partnerships based on realistic expectations.

Conclusions

Implementing VBAs in IDNs offers substantial opportunities for improving the value of health care interventions. Strategies that support alignment of stakeholder needs when developing agreements; creation and use of meaningful metrics; and development of health IT infrastructure to support the development, implementation, and analysis of agreements are needed to overcome challenges faced when implementing VBAs in IDNs. Stakeholders are encouraged to engage in ongoing collaborations and advocacy efforts in support of these strategies.

Forum Participants

MELISSA ABBOTT, PharmD, Clinical Pharmacist, Pharmacy Management Consultants; CLAY ALSPACH, Principal, Leavitt Partners; AMANDA BAIN, PharmD, MPH, MBA, Director, Pharmacy and Care Management, The Ohio State University Health Plan; AMANDA BRUMMEL, PharmD, BCACP, Director, Clinical Ambulatory Pharmacy, Fairview; LISABETH BUELT, MPH, Research Associate, National Pharmaceutical Council; DONALD CARROLL, MHA, RPh, Associate Chief Pharmacy/Connected Care, Cleveland Clinic; DUSTIN CARVER, MBA, Senior Manager, Portfolio Contracting & Innovation, Novo Nordisk; TIM CERNOHOUS, PharmD, PhD, Director of Ambulatory Pharmacy, Essentia Health; RICHARD DEMERS, CAO, Pharmacy Services, University of Pennsylvania Health System; MICHELLE DROZD, ScM, Deputy Vice President, Policy & Research, PhRMA; STEPHEN GEORGE, Senior Consultant, Milliman; PATRICK GLEASON, PharmD, BCPS, FCCP, FAMCP, Senior Director, Health Outcomes, Prime Therapeutics; DOUGLAS GOLDSTEIN, Managing Director, Santesys Solutions; FREDERIC GOLDSTEIN, MS, President and Founder, Accountable Health; JACOB JOLLY, PharmD, CSP, Program Director, Specialty Pharmacy, Vanderbilt University Medical Center; JOSEPH KRYZAN, Regional General Manager, Genentech; MYLA MALONEY, Vice President, Strategic Accounts, Premier; MARTY MATTEI, PharmD, Vice President, Enterprise Initiatives & Product Innovation, MedImpact; SWATI PATEL, PharmD, MBA, Senior Manager, Deloitte Consulting; AJIT RAJPUT, Head, U.S. Innovation, Eli Lilly & Company; YUSUF RASHID, Vice President, Pharmacy and Vendor Relationship Management, Community Health Plan of Washington; KAYSE REITMEYER, Director, Pharmaceutical Manufacturer Relations, Highmark; SOUMI SAHA, PharmD, JD, Senior Director, Advocacy, Premier; HAZEL SEABROOK, RN, MBA, Managing Director, Huron Consulting Group; REBECCA SUGARMAN, MS, Assistant Director, Global Health Economics and Outcomes Research, Xcenda; DANIEL SULLIVAN, MBA, Executive Director, Amgen; HAI TRAN, PharmD, BCPS, Associate Director, Drug Use Policy, Cedars-Sinai Medical Center; ROBIN TURPIN, PhD, Scientific Lead, Value Evidence and Health Outcomes, Takeda; WENDY WEINGART, RPh, MS, Senior Vice President, Managed Care Services, Visante; SUSAN WINCKLER, BSPharm, JD, FAPhA, President, Leavitt Partners Solutions; RENATE WOLFE, Manager, Contract Development, Boehringer Ingelheim Pharmaceuticals; LORI WOOD, MHA, Senior Vice President, Director of Payer Strategy Development, Entree Health; and FREDERICK ZELEZNIK, Director, Oncology Value and Access, Bristol-Myers Squibb.

AUTHOR CORRESPONDENCE: Brianna Palowitch, PharmD, BCGP, Academy of Managed Care Pharmacy, 675 N. Washington St., Alexandria, VA 22314. Tel.: 703.684.2625; E-mail: bpalowitch@amcp.org.