Global foundation launches value-based healthcare pilots

By Deena Beasley

April 26 (Reuters) - Key healthcare stakeholders, led by the World Economic Forum, plan pilot programs this year to show the value of a new model for healthcare that would track and pay for treatment based on how well it works rather than the volume of care.

The first pilot, being set up in Atlanta (BSE: ATLANTA.BO - news) , Georgia, will focus on treating heart failure.

Signatories include Novartis AG (IOB: 0QLR.IL - news) , maker of heart failure drug Entresto, drugmaker Takeda Pharmaceutical Co Ltd , medical device maker Medtronic Plc (Frankfurt: 2M6.F - news) , integrated health insurer/provider Kaiser Permanente, Qualcomm Inc's health-data unit, and health officials from the Netherlands and Britain.

Novartis' sales of Entresto have disappointed as doctors hesitate to switch patients from older drugs and insurers push back on reimbursement for the $4,500-a-year drug. The company has conducted studies showing the drug's impact on hospitalization and quality of life, and done deals where insurers cover it based on patient outcomes.

The notion of linking healthcare decisions to value -- and deliver better patient outcomes at lower cost -- has been around for about a decade, but implementation has proven difficult.

"Hospitals, primary care practices, the way people get paid -- all of that has to be transformed," said Harvard Business School Professor Michael Porter. "The push back is not on the ideas, it's on implementation."

The WEF, a global foundation fostering cooperation between public and private sectors, is urging global leaders to focus on patient outcomes.

"We believe that this is a model that should be adopted globally ... We plan on sticking with this for several years," said Rick Valencia, president of Qualcomm Life.

But questions remain about the U.S. government's commitment to health reform.

"Something of a political war is underway in healthcare," Porter said. "The AMA (American Medical Association) has been a great supporter of the old system. The private insurance industry, although there are important exceptions, has also been holding this back -- they are doing pretty well the way it is. They are making good margins."

He said the Trump administration has sent "mixed signals" about outcomes-based healthcare.

"Medical device and pharmaceutical companies are starting to realize that if they don't change the nature of healthcare, their prices will be cut," Porter said. "If they want to make good profits ... they are going to have to prove that their drug actually lowers the overall cost of care."

Regional pilots are planned for The Netherlands, Singapore and China. (Reporting By Deena Beasley; Editing by Sandra Maler)