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The Changing Face of Value

From the Session: Ready for Healthcare Leadership – How Pharma Embraces a New Customer Engagement Paradigm


Marc Boutin, CEO, National Health Council – Moderator

Kabir Nath, President & CEO, Otsuka North America

Perry Sternberg, EVP & Head U.S. Commercial, Shire

Andrew McCulloch, President-Kaiser Foundation Health Plan & Hospitals Northwest Region, Kaiser Permanente

“Only in the last several years have we started to try to define value — we’re a late comer to this issue,” says Marc Boutin, CEO, National Health Council. “One of the great challenges in the U.S. is that we often look at value from the perspective of various stakeholders. In many cases we don’t consider what value is to the patient.”

We’re defining value from everyone’s perspective except the end user! That makes no sense.”

Things are changing, says Andrew McCulloch, President-Kaiser Foundation Health Plan & Hospitals Northwest Region, Kaiser Permanente. “Our value proposition is a direct reflection of what our patients and our clinic members tell us. And there are three simple measures of value that we use in terms of setting our strategy.”

  1. Clinical Quality: McCulloch suggests measuring this variable through preventative care, acute care, follow-up care, and inventory care.
  2. Affordability: As McCulloch explains, “We can put great innovation out there, but if we can’t put offer an affordable financing plan, clinical quality is of little value to anyone.
  3. Service: This includes the health plan side as well as inside the care delivery system. McCulloch describes a variety of factors to measure exemplary service, including how long people must wait for the medications in an outpatient setting.

It’s a strategy that works — although according to Perry Sternberg, EVP & Head U.S. Commercial, Shire, it’s a relatively new take of “value.” As he explains, “In the past 15 years, the definition of value has evolved. It was once all about bringing that innovative medicine to the market. Today, it’s not just about bringing that medicine to market but also how you diagnose the patient. How do you get these patients treated? How do you keep patients on their therapy? It’s about how the patient can live as normal a life a possible.”

As to how “value” will be defined within the next decade, Boutin offers a prediction. “Within the next 10 years we’re going to move from the concept of population health, a great starting point, to the individual. That will create a different market. It’s exciting, filled with huge opportunities.

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