Successful implementation of precision medicine will need to address several system-wide challenges, including administrative complexities, the creation of new financing models, and aligning provider- and patient-focused initiatives. The enormous clinical potential of precision medicine sheds light on the critical importance of using clinical benefit—not acquisition price—to guide and improve how we spend health care dollars. The model that we currently use to pay for medical services is clearly not suited for groundbreaking, one-time treatments, particularly those with clinical benefits that are incurred in the near and distant future.
When it comes to the boundless potential yet well-recognized limitations of America’s health care system, it is clear that we live in an era of Star Wars science but with Flintstones delivery.1 In recent years, precision medicine—the integration of molecular science into the clinical care of an individual patient— has spurred efforts to develop targeted preventive strategies and disease-specific therapies. Precision medicine allows us, for example, to examine the DNA from an individual’s tumor and determine which treatments work best for that patient. Precision treatments are already in use that target specific molecular markers found only on certain cancers. We now know that colon cancers that have a normally functioning version of a protein called KRAS are more likely to respond to certain antiepidermal growth factor receptor (EGFR) antibody therapies—those in which the protein is absent or nonfunctional are not. Targeted treatments are currently used in several other cancer types, including lung and breast.2
Personalized approaches like these have the potential to improve quality of care, enhance the patient experience, and allow for more efficient health care expenditures.3 However, these treatment approaches present the particular challenge of expensive, single-dose therapies, where prior treatments generally did not. This novel scenario causes unease for a payment system designed to manage predictable expenditures over long time periods. Successful transition into this new paradigm will require innovative approaches to ensure patient access to these targeted therapies and implementation of financial vehicles that stabilize payer costs.
Challenges for Patient Access
Although Food and Drug Administration-approved precision treatments are becoming more commonplace, patient access to them continues to be problematic in specific clinical circumstances, such as when the patient faces high out-of-pocket costs or challenging utilization management initiatives. Historically, the population health strategy has been to initially prescribe a lower cost treatment and then allow a higher cost treatment to be used next if the lower cost one is ineffective (also known as step therapy). However, precision medicine may specify the immediate use of more expensive, targeted therapies, nullifying recommendations for use of standard first-line treatment. Although step therapy is not used in every cancer treatment scenario, it is a common management strategy used to deter usage of higher-cost therapies.
Since existing access models encourage the first-line use of effective, lower cost clinical services in many clinical situations, patients have to pay higher costs out of pocket for precision therapies—even when they are clinically indicated. This is in the form of higher copayments, co-insurance, and deductibles, which have become more common in recent years.
Unfortunately, escalations in consumer out-of-pocket costs for health care have been associated with deleterious consequences. These include financial stress, worse disease control, increases in hospitalizations, and exacerbation of health disparities.4-9 Since these consequences are increasingly borne by individuals who have multiple chronic conditions or face financial insecurity, an innovative approach to cost-sharing that mirrors advances in precision medicine must be implemented to reduce health care disparities and ultimately improve individual and population health.3
Value-Based Insurance Design
As it stands today, the price paid for a therapy or service often does not parallel the health gains achieved. Defining actual value in health care is very challenging, because clinical value can only be determined at the individual patient level. To illustrate this critical concept of “clinical nuance,” we like to tell people that our 3 favorite high-value services are colon cancer screening, coronary artery stents, and back surgery; and our 3 least-favorite, low-value services are also colon cancer screening, coronary artery stents, and back surgery. This highlights the point that the same service can be lifesaving for one person and harmful to another.
For a patient that tests positive for a specific biomarker, like EGFR in nonsmall cell lung cancer, a targeted therapy may be indicated as the first-line therapy to optimize patient-centered outcomes. In these situations, the lower cost but less optimized therapy is no longer high value, and a clinically indicated, “precision” alternative becomes a higher value choice and should therefore be easily accessible by the patient. Thus, when a patient and a provider agree that the available evidence recommends a specific therapy and meets an individual’s treatment goals, the level of cost-sharing should, at that moment, adjust to that of “first-line therapy”—regardless of whether the agreed-upon drug is actually the first, third, or sixth one used in the episode of care.
If the full potential of precision medicine is to be realized, system-based reforms must encourage—not deter—its adoption by clinicians and consumers. This requires a value-based insurance design in which patient out-of-pocket costs are driven by patient-centered outcomes, not cost of therapy.10 The application of clinically-nuanced cost-sharing can enhance access to effective therapies when indicated, commit to established policies that encourage first-line therapies, and support precision medicine initiatives.
Implementing Precision Benefit Design
There are numerous barriers to the adoption of precision benefit design, including clinical information requirements, the separation of pharmacy data from medical claims, coordination with electronic medical records, and integration with payer systems. In order to implement the proposed precision benefit design, system-wide changes will be necessary and administrative complexities will need to be addressed. Incentives that engage patients, such as removal of barriers to accessing care, both financial (such as copayments) and nonfinancial (such as transportation to clinics), will also need to be established. The clinical and economic impact of these consumer-facing initiatives will be further enhanced if aligned with provider-focused initiatives, such as quality-driven payment models (eg, accountable care, bundled payments).11
The enormous clinical potential of precision medicine sheds light on the critical importance of using clinical benefit—not acquisition price—to guide and improve how we spend health care dollars. The model that we currently use to pay for medical services is clearly not suited for groundbreaking, one-time treatments, particularly those with clinical benefits that are incurred in the near and distant future. Massachusetts Institute of Technology’s NEW Drug Development ParadIGmS (NEWDIGS) is among the multistakeholder collaborations working to identify promising ways of paying for curative therapies that expand access to patients and reduce the impact of the high one-time costs of these therapies for payers.12
Conclusion
Successful implementation of precision medicine will need to address several system-wide challenges, including administrative complexities, the creation of new financing models, aligning provider- and patient-focused initiatives, and recognizing that the perfect must not be the enemy of the good. By enhancing access to effective therapies when clinically indicated, the application of clinically-nuanced cost-sharing commits to established policies that encourage lower cost, first-line therapies in many clinical circumstances, while simultaneously supporting precision medicine initiatives.
Read the counterpoint to this perspective here.
References
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2. Jameson LJ, Longo DL. Precision medicine—personalized, problematic, and promising. Obstetrical Gynecol Survey. 2015;70(10):612-614.
3. Fendrick AM, Buxbaum J, Westrich K. Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design. National Pharmaceutical Council and Center for Value-Based Insurance Design. https://vbidcenter.org/wp-content/uploads/2014/10/vbid-specialty-medications-npc2014-final-web.pdf. Published 2014. Accessed August 16, 2018.
4. Collins SR, Rasmussen PW, Beutel S, Doty MM. The problem of underinsurance and how rising deductibles will make it worse: findings from the Commonwealth Fund Biennial Health Insurance Survey, 2014. Issue Brief (Commonw Fund). 2015;13:1-20.
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9. Wharam JF, Zhang F, Eggleston EM, Lu CY, Soumerai S, Ross-Degnan D. Diabetes outpatient care and acute complications before and after high-deductible insurance enrollment: a natural experiment for translation in diabetes (NEXT-D) study. JAMA Intern Med. 2017;177(3):358-368.
10. Fendrick AM, Ayanian JZ. Smarter consumer cost sharing using clinical nuance. Harvard Bus Rev. https://hbr.org/2013/11/smarter-consumer-cost-sharing-using-clinical-nuance. Published November 15, 2013. Accessed August 16, 2018.
11. Bacher G, Zina A, Fendrick AM. Beyond SGR: aligning the peanut butter of payment reform with the jelly of consumer engagement [blog]. Health Affairs. https://vbidcenter.org/beyond-sgr-aligning-payment-reform-with-consumer-engagement/. Published April 23, 2015. Accessed August 16, 2018.
12. Massachusetts Institute of Technology (MIT) Center for Biomedical Innovation. MIT NEWDIGS. https://newdigs.mit.edu/. Accessed August 16, 2018.
