Value-Based Contracting: What's the impact on payers?

Publish date: 13 Aug, 2019

 
The impact of medtech value-based contracting on payers is uncertain because the payer - manufacturer interaction model is not as common as manufacturer relationships with providers.

However, there are still a few major ways we expect to see these agreements impact payers, as DRG’s Adrienne Lovink reviews in this video.

Transcription:

The impact of value-based contracting, specifically with med device companies on payers, is a little uncertain because the payer and med device company interaction model is not as common as med device company to provider.

There are a couple major areas where med device value-based contracts could impact the payer. One is generally just thinking about the incentive and the desire is to have these contracts reduce the overall cost of care. So the payer should get a benefit in cost of care going down and then generally being able to provide better care for patients.

The other potential impact on the payer is it gives them an opportunity to directly engage in brand selection, which they don't have in common contracting models today. So in markets where the payer has an incentive to promote or to prefer a certain brand, this gives them an opportunity to actually create a direct contract and to influence a brand selection process because they feel that a certain brand has a clinical benefit and they want the best and most clinically efficacious brand being used. Again, because their overall incentive is to just manage the cost of care and to provide the best care at the lowest cost.

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