Frequently Asked Questions
Value-Based Healthcare
Value-Based Healthcare
Value-based healthcare promotes cost-effective treatment by aligning payment with patient outcomes and ensuring equitable access to innovative therapies.
In this article, we address key questions about value-based healthcare, submitted by the participants the Global Payer Forum 2025—a live webinar series we host on trends in patient access and reimbursement. The Global Payer Forum is designed to equip payers, policymakers, providers, and patient representatives with comprehensive insights into value-based healthcare.
What are the main challenges in implementing value-based contracts and how can we address them?
The implementation of value-based contracts (VBCs), and particularly outcomes-based agreements, can present multiple challenges, including:
- Collecting and processing outcomes data, including lack of data sources, data infrastructure to access data, legal rights to use it, and staff to assess the data and adjudicate discrepancies.
- Regulatory and legal barriers.
- Lack of awareness of a value-based mindset among key stakeholders.
- Excessive complexity of the reimbursement solution.
- Lack of trust between the contracting parties, leading to overly complex negotiations and legal documents.
To overcome these and other barriers, the key stakeholders in a VBC must establish a relationship of trust by defining common goals and developing win-win solutions that reduce risk for both payers and manufacturers. Stakeholders should also take key actions to ensure the successful implementation of VBCs: develop a value-based mindset, strive for simplicity in VBC designs that acknowledge infrastructure limitations, and execute a clear and honest assessment of whether a VBC is the most appropriate response to the specific case.
Note that existing drug discount arrangements also require substantial negotiation and administration efforts as well as investment in new computer systems, external consultants, and dedicated staff. As VBCs become more numerous and standardized, significant administrative efficiencies should emerge.
How can we integrate patient-reported outcomes and quality of life measures into payment models?
Patient-relevant outcomes, such as patient-reported outcomes (PROs) and quality of life (QoL) measures, are still not widely considered when designing payment models, including value-based models. This is usually not because of a lack of desire but rather due to concerns about whether PROs are sufficiently robust and stable measures upon which to base payment and patient access to continued therapy. Burdening patients with a requirement to report their outcomes, which might affect their access, is also a concern.
Nonetheless, the value of health technology for patients is more likely to be integrated in value-based approaches. Elevating patient voices by engaging patient advocacy groups at all stages, from drug development to reimbursement and healthcare provision, is key to raising decision-maker awareness of the need to integrate patient-relevant measures in reimbursement models. Innovation in the collection and processing of PROs, such as leveraging digital tools, represents another avenue for the integration of the patient voice. Companies are already developing innovative methodologies. The generalized risk-adjusted cost-effectiveness (GRACE) framework, which integrates clearly defined measures of patient value into cost-effectiveness calculations, represents an elegant example of innovative solutions that place the patient voice at the center of reimbursement decisions.
Watch the first webinar of Global Payer Forum, Paying for Value in Healthcare: Why, When, and How?, to learn more on this topic.
What role does artificial intelligence and digital health play in value-based healthcare?
Artificial intelligence (AI), digital health, and digital tools have the potential to fundamentally change the way that healthcare data are generated, how care is provided to patients, and therefore, how decision-makers determine which technologies are reimbursed and prioritized. In a value-based framework, AI can potentially assist manufacturers and payers in the creation of innovative and creative reimbursement solutions that minimize risk and ensure patient access. AI can do this by analyzing data and finding previously unknown patterns, reducing the burden of VBC implementation on staff. Digital health can help to ensure care provision for disadvantaged and geographically disparate communities, facilitating treatment dispensation or the monitoring of disease outbreaks and enabling timely responses by health authorities, as exemplified by the Audio-Visual AFP Detection and Reporting program for polio eradication in sub-Saharan African communities. In addition, the increasing availability and affordability of digital devices and wearables is an opportunity for low cost, rapid collection of patient data, as well as treatment of both clinical and QoL outcomes, as seen with the Naveta Initiative in Spain, for a value-based telemedicine platform to enhance chronic care management by collecting PROs and patient reported experience measures. Digital solutions hold the promise of facilitating the implementation of VBCs and elevating the patient voice.
Watch the second webinar of Global Payer Forum, Can Digital Tools Enable Value-Based Healthcare?, to learn more on this topic.
How can healthcare stakeholders build trust and collaborate effectively?
Trust is an essential ingredient for successful interactions between all stakeholders in the healthcare sector. This is particularly relevant in value-based approaches, where stakeholders frequently interact during typically long contract periods and must work together to make decisions on whether pre-agreed outcomes have been met in the real-world. Trusted collaborations are built incrementally throughout a value-based drug access negotiation, implementation, and adjudication program, and then continue on to the next program. Hence, communication channels between and within institutions should be established well ahead of any pricing and reimbursement proposals or negotiations, to build the relations that facilitate trust-building, transparency, and cross-functional collaboration. Stakeholders can base initial trust on common goals, such as ensuring patient access and managing uncertainties connected to that access. The parties to a VBC should significantly share the risks, not push them to the contracting partner. Clear, pre-established methodologies for dispute resolution not only provide for later efficiency but also can build confidence in the trustworthiness of the partners.
How should we price innovative therapies within a value-based framework?
The healthcare industry should not perceive value-based frameworks as a method to either reduce costs or maximize revenues for innovative therapies. The same principles of pricing applied in traditional reimbursement methodologies still apply to pricing new health technologies. Payers will still define price using comparative clinical and patient value, cost effectiveness, budget impact, international reference pricing, and rebates, depending on local contexts. Nonetheless, pricing and reimbursement methodologies can be adapted to include value-based elements. An alternative like GRACE offers a transparent and systematic way to incorporate the value of a treatment for patient into traditional, widely used, cost-effectiveness approaches to reimbursement while its methods are built on traditional, widely used economic tools.
The promise of value-based approaches is that they will ensure that payers and patients pay for a technology’s measurable value, mitigate clinical and/or financial risks for payers and manufacturers, and, therefore, accelerate patient access to healthcare innovation.
Watch the first webinar of Global Payer Forum, Paying for Value in Healthcare: Why, When, and How?, to learn more on this topic.
Who should fund and maintain health data registries for value-based agreements?
Registries may not be needed for value-based arrangements, particularly outcomes-based contracts, if stakeholders can instead use surrogate measures in data that are easier to access, such as claims.
When registries are necessary, their funding is dependent on the legal and socio-economic framework of each country, resulting in different funding models. Governments may fully fund registries (even if operated by academics or others), or patient groups, public payers, private payers, and/or manufacturers may form partnerships. Provider-based registries (e.g., reference hospitals) can also present a solution. In Saudi Arabia, multiple disease registries have been developed in the past few years through collaborative work between the Saudi Ministry of Health and pharmaceutical companies. These registries are intended to guide formulary decision-making and facilitating the implementation of value-based agreements.
Watch the third webinar of Global Payer Forum, Will a Focus on Value Drive the Future of Our Healthcare Systems?, to learn more on this topic.
What are the key steps for countries to transition to value-based healthcare?
A transition to value-based healthcare models is a multifactorial process which is dependent on each country’s context, needs, and resources. The transition should involve all key stakeholders in healthcare, including patients, payers, policymakers, providers, and manufacturers. Key aspects to consider include raising stakeholder awareness of the rationale and mechanisms of value-based healthcare, thus inspiring the desire to implement initial pilots. In a pilot, stakeholders can begin building trust and collaboration by creating early and regular communication channels and establishing common goals. Stakeholders should be aware that a change in internal culture is required with the shift from a volume-based model of care to a value-based model.
The example of Saudi Arabia’s recent drive to transform its healthcare system shows that fundamental changes such as a transition from a cost-based to a value-based model of reimbursement do not happen overnight. Beyond an initial pilot, a phased approach is necessary to confirm what works and improve what doesn’t. In addition, several steps can maximize the promise of value-based healthcare while minimizing implementation risks. These include developing an infrastructure that facilitates the management of complex systems, including innovative processes and a powerful digital infrastructure. In addition, the widespread integration of real-world evidence to measure value for both patients and healthcare systems and creativity and flexibility in the design of innovative payment models are vital.
Watch the third webinar of Global Payer Forum, Will a Focus on Value Drive the Future of Our Healthcare Systems?, to learn more on this topic.
The Global Payer Forum is a landmark educational initiative organized by Alira Health in partnership with distinguished academic institutions UPF Barcelona School of Management, the NEWDIGS Initiative at Tufts Medical Center, and UCL Global Business School for Health, made possible through funding by Takeda.
Subscribe to our newsletter for the latest news, events, and thought leadership