Fragmented system

Despite consolidation among insurance companies in the past decade, the US healthcare system is still relatively fragmented compared to other markets. A continuing trend toward ACOs could make the system even more fragmented by introducing ACOs as price-sensitive stakeholders.

In order to be successful, ACOs will need to monitor their budget closely and identify cost-effective protocols and policies at the system level. Each individual ACO will be making tradeoffs between different possible treatment regimens and evaluating whether newly available treatments could help increase efficiency. At a minimum, this would result in significant variation across ACOs in the early adoption rates of new healthcare technologies (e.g., drugs, devices, or diagnostics). And unless ACOs share approaches with each other, there is potential for long-lasting variations from organization to organization. There would be many more stakeholders to convince of the clinical and economic value of a new technology than ever before.

Targeted marketing

The emergence of ACOs will require a change in the way that pharmaceutical companies and medical device manufacturers market their products. While traditional US payers will still be important stakeholders, value communication will also be critical for ACOs as well. Some potential changes necessary in this new environment could include:

» Broadening the definition of "market access" to include system-wide ACO adoption of new technologies rather than simply formulary position and restrictions

» Tailoring value stories and health economic models toward individual ACOs to drive adoption, with less emphasis on making the case to traditional US payers

» Incorporating quality metrics into clinical trials that are being used in ACO contracts, so as to more concretely communicate value

» Defending the budget impact of new technologies, particularly in areas with high expenditures (e.g., diabetes, oncology, and cardiovascular disease), as these areas are likely to be the first targets for cost savings

Manufacturers should prepare for these kinds of changes because even if the ACA does not survive in its current form, there is little doubt that ACOs will continue to be one of the most important changes in the US healthcare landscape. This model has moved well beyond the pilot stage, and now private insurers are the pioneers in developing ACO programs. There are over 150 hospital systems across the country that have organized into ACOs, and that number is growing rapidly. Many of these newly formed ACOs are large healthcare networks treating a significant number of patients. Partners Healthcare, the largest hospital and provider network in Massachusetts, entered into a contract last year for the ACO program offered by BCBS of MA. The US healthcare system as a whole seems to be embracing a shift toward ACOs, and this trend could significantly change how companies will need to position new pharmaceuticals, devices, and diagnostics for market success.

Alex Gasik is Director at Simon–Kucher & Partners. He can be reached at alex.gasik@simon-kucher.com
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