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The Business of Healthcare Delivery: Demonstrate Value and Favorable Economics

Today at the Mid Atlantic BIO, a panel of the Business of Health Delivery discussed changes to the business of health delivery. Moderator Bruce C. Robertson stated that 10 years ago it was rare to speak to a healthcare payer when making an investment decision; today it is commonplace. The purpose of this panel was to directly solicit the voice of payers.

According to Adventist Healthcare President and CEO William G. Robertson (no relation to Bruce Robertson), the “fee for service” model historically drove the adoption of technology. The shift from cost-plus to payment for diagnostic-related groups (DRGs) regardless of cost has brought many changes to how hospitals manage their budgets.

J. Knox Singleton, CEO of the Innova Health System, referenced the lack of innovation in some countries and said that the historic open-payer environment was a gold age for technology development. The guaranteed stream of revenue growth was a strong driver of innovation.

When asked to describe the new environment, the payer-panelists summarized their reimbursement decision-making:

Given that the more attention is now paid to evaluating healthcare costs, marketing levers must shift to demonstrating benefits — improved safety, new efficiencies, reduced costs, improved efficacy, etc — and that there are no existing alternatives to achieve the same benefits. After considering the benefits of a new technologies, marketers should next explain how the cost of a technology measures against the benefit.

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