Why Electronic Health Record Interoperability is a Key Step Toward Fair Drug Prices

The following is a guest article by Girisha Fernando, Founder and CEO at Lyfegen.

Changes are afoot in the way insurers and governments pay for the drugs and treatments patients need-and a big part of that change includes a move towards value-based contracting, with prices set based on the outcome of treatments. With recent legislation allowing Medicare to negotiate prices, it’s likely that the movement will grow, given the high and constantly rising costs of pharmaceuticals, especially gene therapies and other innovative or personalized drugs. Indeed, some drug companies offering very high-priced treatments have already adopted VBP, promising reimbursements to payers if a drug doesn’t work as promised.

That VBP is on the way to the private sector is clear, as more private health organizations adopt the model. Insurers both large and small, for example, are partnering or even acquiring organizations that specialize in VBP; the same goes for physicians groups and groups that provide home care. In the public sector, in addition to the changes recently passed by Congress requiring Medicare to negotiate some drug prices, a proposed change in the Medicare Physician Fee Schedule is also likely to further push adoption of VBP, experts believe.

But VBP has a ways to go before it becomes mainstream; in 2022, just 15% of all US physicians were working with a VBP program of any sort.

One important factor that is key to the growth and success of VBP – and making the transition to it smoother – is to expand the use of electronic health records (EHR). This provides a common system where all parties will have access to the health history of a patient, including their current and past treatments, the drugs they have been prescribed, and their outcomes – all key data components needed to make VBP work.

EHR systems are common in Europe, and many European countries have made significant strides in adopting some aspects of VBP for drugs and treatments. The EU has recommended further expansion of EHR sharing to encourage the use of VBP, which would lead to even lower costs for patients and insurers. Developing that interoperability – where all stakeholders will have access to data on patient treatment and outcomes – is going to be essential to the expansion of VBP in the United States as well, and the more interoperability there is, the easier it will be for stakeholders to implement, and benefit from, VBP.

Interoperability, of course, must be accompanied by strong security to protect both the records and the identities of patients, and will entail implementing safeguards like anonymizing data when appropriate, as well as better security training for medical personnel, high-level data security like two-factor or biometric identification for access, and other security measures. Such security and regulatory issues are currently being addressed in the wake of the 2016 21st Century Cures Act, which sets the shift toward interoperability as the norm in the healthcare industry.

With proper privacy and security policies and protocols, EHR interoperability will help expand the implementation of VBP in several ways. For example, a common aspect of a VBP scheme is that pharmaceutical makers will, among other things, refund payments to care providers and insurers for drugs that do not perform as promised – and this will require following patient results over time, regardless of care and insurance details. Record interoperability will provide a way follow patients as they move between care providers, treatments, and even insurers; this will be essential in order to allow the insurance company that paid the large sum for patient treatment will be able to recoup a contract-based refund if the patient outcome does not match the expected criteria even if the patient has switched insurance providers.

EHR interoperability will also help empower patients. Caregivers will be able to review with patients the complete collective history of a treatment or drug, including long and short-term side effects. AI systems, managed by caregivers with input from patients, will be able to analyze the specific needs and issues posed by patients, and recommend the best treatment options – with the patient and doctor ultimately deciding on the best option.

A system that allows access to the history of a drug or treatment throughout the entire system – how it was used, when and on which patient populations, what the results were over time – will also enable hospitals and caregivers to work more transparently with insurance companies. Data on treatments will give all stakeholders a clear picture on how much a treatment or drug really costs, and why it’s priced as it is. Several countries, among them Saudi Arabia, Sweden and Denmark have already implemented interoperability on a regional or national basis, and they provide clear models for the US to move forward with secure and successful data and record sharing.

Data is the new gold, goes the old saying – and in the case of VBP for drugs and treatments, EHR interoperability will indeed be the gold standard.  Achieving that goal will require overcoming numerous hurdles, both technical and administrative. But when those issues are resolved, expect all stakeholders to embrace VBP in a bigger way, setting the stage for a path to affordable drugs and healthcare