New Therapies Could Have Big Impact on Healthcare Administration

New Therapies Could Have Big Impact on Healthcare Administration

Pricing and payment are vital aspects of healthcare management and administration. Some new approaches to therapies, and the realities of shifting demographics, could change how organizations charge for treatments and play for keeping entire populations healthy.

Start with new therapies. The pharmaceutical industry has been in a pickle. Much of the world either directly controls prices or uses the bargaining power of national health services to keep drugs affordable.

But the pharma companies need to satisfy shareholders and produce profits, so they’ve focused on pushing prices in markets like the U.S. where they can. Some have sharply raised domestic prices on existing and widely used drugs, as Reuters reported earlier this year.

Prices for four of the nation’s top ten drugs increased more than 100 percent since 2011, Reuters found. Six others went up more than 50 percent. Together, the price increases on drugs for arthritis, high cholesterol, asthma and other common problems added billions in costs for consumers, employers and government health programs.

But public outcry to examples like the sharp increase in the price of EpiPens, as well as broad media coverage of the bigger price growth trends, have shown companies that there is a limit to what they can do with impunity.

One approach is the idea of pegging prices to the results of clinical outcomes, rather than depending on the shift over time to generic versions of drugs to free up extra money for new costlier developments. Instead of the existing pay-for-pill model, organizations and consumers would be charged for the benefit of improved outcomes, like lower hospital admissions. But getting the data and objectively proving a benefit that has not yet arrived will be a tough hurdle to clear.

Then there are the changes in treatment and demands that come from an aging baby boomer generation. As the oldest members turn 70, they still often live active lives and are determined to remain healthy. That expectation can clash with many of the realities of aging, including higher incidents of more serious diseases and conditions, as well as the inevitability of death, particularly as many boomers have questionable health and such issues as obesity and diabetes because of lower physical activity than generations before.

So, there will be potential conflicts, as boomers want the treatments and attention to remain vital but may not have the base level of health to make efficient use of the resources they will need. Providers will need to adjust services to take into account the significant demographic shift, like adding geriatric services in emergency room settings. Drug companies and researchers will also likely focus on age-appropriate diseases, possibly taking focus away from broader considerations.

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