Bang & Olufsen Medicom - Outcome is the new income

With healthcare costs spiralling out of control, a radical shake-up of payment structures and stakeholder demands is desperately needed. Bang & Olufsen Medicom's CEO Morten Nielsen explains how a paradigm shift to a balanced system with a focus on outcomes - rather than on simple prescription of medication - would drive the required change.


The number of Europeans suffering from lifestyle-related health conditions is approaching critical mass. One in ten now die from diabetes, while the European Society of Cardiology has identified cardiovascular disease as the single greatest cause of death on the Continent.

For Europe's governments, the problem looks set to worsen as the years go on. According to Morten Nielsen, CEO of Bang & Olufsen Medicom, the number of afflicted people is rising, placing an increasing financial burden on national authorities.

Structural problems

"The proliferation of lifestyle diseases has driven the healthcare reforms we've been seeing, particularly over the last two or three years," he says. "They are already costing governments huge amounts of money, and it's going to get more expensive.

"The issue is made even more problematic by politicians not wanting to talk about the tough healthcare priorities we have to make as nations if nothing radical happens soon, as doing so will most likely not get them re-elected.

"This is a serious situation, though, and we, as a society, are going to have to make many tough decisions about how we want to fund healthcare, and how we want to pay pharmaceutical companies for the drugs they invest in and deliver to improve healthcare."

For Nielsen, dealing with the problem requires a fundamental shift in the way healthcare is approached. Rather than receiving money for providing an isolated drug/medication, pharmaceutical companies - and other stakeholders within the sector - should be paid by medical outcomes (delivering actual results from the medication and managing the disease as required).

"It's mathematically clear that there needs to be a change to the existing payment and prescription focused structure. The questions are, how do we want to go about it, and how quickly can it be implemented?" he opines.

"We must measure success with funding models that are regulated by outcomes and the factors that drive outcome, which is far from just being the medication. There must be a balance between demanding more of the patient, the healthcare professional and the pharmaceutical companies."

Taking a more holistic approach to healthcare is central to the required shift Nielsen proposes. Currently, the healthcare system and pharmaceutical companies tend to see the medication as the key treatment ingredient, while medical devices, connected patient services and other associated holistic solution elements are regarded as little more than necessary evils or marketing gimmicks to handle the medication, or simply to sell the drug.

With a stronger focus on outcomes, however, these peripheral aspects will need to take on a far greater significance in the eyes of all stakeholders - including pharmaceutical companies.

"It's not good enough that drugs firms only think about the solution components such as devices and connected services shortly before market launch," says Nielsen.

"They need to be thinking about these strategic solution components at least three years prior to the treatment being made available (before phase 3), so that it becomes an integrated part of the solution and how outcome should be improved. It's all part of providing end-to-end solutions that are focused on outcome, as delivering outcome will equal income in the future for the pharma industry."

The full treatment

"Some patients get very ill and their conditions develop into multiple disorders, including psychological problems. In situations like this, the role of the caregivers and/or the family becomes extremely important," Nielsen explains.

"In order to improve patient outcomes and provide effective, solution-based therapies, we have to build these additional elements into treatment plans. It's not just about the patient, it's the people and stakeholders around them, as well."

Nielsen accepts that the change he is calling for will have to happen on a grand scale and include all key industry stakeholders. He recognises that harmonising these different groups - many of which have competing interests - will be a major challenge, but believes integration is possible.

"One of the biggest hurdles in bringing about this change will be establishing a commonality between the industry regulators, pharmaceutical companies and patients," he says.

"If changes made by pharmaceutical companies aren't acknowledged (and paid for), or if patients, healthcare professionals, doctors and the local communities don't hold up their end of the bargain, it will never succeed. To ensure success, we need to have a number of different ways of measuring outcomes and to agree on methodologies. Everybody involved needs to understand their role and be able to stand up for their share. If anybody is not delivering their share there, need to be consequences."

Taking responsibility

Creating a system based on greater interaction between healthcare stakeholders will no doubt result in improved efficiencies and better patient outcomes. Nielsen is also keen to point out that it also brings significant responsibilities: "If patients fail to act as they are asked to," he suggests,"they should pay for half of the medication themselves, rather than receiving it for free. We are talking about changing behaviours across all players."

Bang & Olufsen Medicom has been in the business of innovating advanced drug delivery devices and services for more than 20 years. Its focus is on creating outcome-based solutions for drugs companies, delivering strategies that take wider medical contexts into account.

"Medicom creates end-to-end solutions in which devices, connected services and drugs are completely integrated," says Nielsen. "The company only works with clients that agree to that context and subscribe to that strategic approach."

The CEO illustrates his point with a recent project completed with Bayer that focused on the German pharmaceuticals company's fully integrated BetaConnect product, which helps to administer and monitor Betaferon injections for the treatment of multiple sclerosis. The approach aims to reduce relapses for patients, which means improving outcomes. BetaConnect not only eases injections for patients, but also enables patients, nurses and caregivers to manage and monitor diseases better.

This injection data - including speed/depth, date/time and volume - is uploaded in real time, via cable or Bluetooth, to a computer or mobile device, and is then passed through a central database and shared between the relevant people around the patient.

"Many approaches only include devices to just deliver the drug, but Bayer's provides a 360° view of both patient and disease," says Nielsen. "This is one of the first end-to-end approaches out there, though Medicom is developing similar solutions for other clients in other disease areas. Things are really beginning to take off and we are growing quickly."

Survival of the fastest

Nielsen is confident the increased interaction between industry stakeholders that is so central to improving overall healthcare will begin soon. Some areas of the sector, however, will adapt to the new model more quickly than others.

"Big pharmaceutical companies are hardly known for being nimble," he says. "Their decision-making procedures are often slow, which could make life more difficult for them - but regulators and healthcare institutions are similarly challenged by their lack of speed. On the other hand, it could really benefit smaller and mid-sized pharmaceutical and biotech firms, which have the potential to be much faster at implementing changes and even have a chance of being first-movers and thus setting the standard.

"No doubt there will be a couple of years of intense competition to define, implement and harvest the benefits of this new, outcome-based paradigm. The winners will be those that adapt most quickly, internally, as well as in the way they deal with their stakeholders.

"This is very much a first-movers' game, The system is extremely immature and on the lookout at the moment; it will be vital for companies to prove that they can operate and market new solutions in this new environment over the next two to three years."

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URL: www.medicomnordic.com

The pharmaceuticals industry looks set for some fundamental changes to the ways in which healthcare is administered and paid for.
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