About the Report
The increasing use of digital technologies for diabetes indicates the health system has entered a new era of diabetes care. Increased digitalization, and particularly the use of digital medicine products such as connected devices and digital applications, offers many potential benefits such as improved health outcomes, increased care efficiency, and improved quality of life for people with diabetes. However, in order for the value of these tools to be realized, health policy and healthcare practice must continue to modernize to allow for improved patient access and use. In the area of reimbursement, value-based agreements (VBAs) show promise as one way to realize the value of digital medicine product innovations while also generating further evidence for the healthcare system.
Report Summary
Within the U.S. healthcare system, the prevalence of chronic conditions such as diabetes is increasing, as are diabetes care expenditures. In order to improve health outcomes associated with diabetes and to better manage care expenses, novel reimbursement mechanisms such as VBAs can help improve access to and use of new innovations. In its most simple form, value-based healthcare focuses on improving care outcomes and value realized from care expenditures. Operationally, VBAs can act to align health system stakeholder interests, ideally improving health outcomes and reducing care costs in the target patient population.
VBAs between manufacturers and payers can largely be categorized as either performance-based or differential pricing-based VBAs. The former links payment to the demonstrated patient outcomes, while in the latter, pricing varies based on the clinical value relative to existing treatments. In both cases, incentives are greater for products that work and less for those that do not. VBAs are gaining some traction and use in the U.S. healthcare system, but they can be more complex to implement than traditional rebate or discount agreements. Challenges can include defining which outcomes to measure, aligning on agreement terms, tracking performance, overcoming insufficient data infrastructure, and navigating potential regulatory concerns. To allow for more widespread uptake and adoption of VBAs, educational opportunities to learn about VBAs, the establishment of basic frameworks, federal policies, and efforts to appropriately share real-world experience with VBAs and their impact will all be helpful.