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Industry Group Releases Framework for Demonstrating Value in Diagnostics

NEW YORK (GenomeWeb) – The Advanced Medical Technology Association (AdvaMed) Monday released a framework that diagnostic manufacturers can use to communicate the value of their products to different groups in the healthcare ecosystem. 

The framework comes at a time when the US healthcare enterprise is shifting from fee-for-service arrangements to models that link payment to proof of value, such as improvements in patient outcomes and reductions in per-capita costs.

"There has been a tremendous shift in how providers are paid under new value-based models," said Don May, executive VP of payment and healthcare delivery at AdvaMed, during a call to discuss the organization's report, entitled A Framework for Comprehensive Assessment of the Value of Diagnostic Test. "Whether that's [through] accountable care organizations, or bundles, or new private models, they've really shifted the incentives and the way that providers engage with patients and deliver care."

In concert with the value assessment framework on diagnostics, AdvaMed also released a report on a framework to assess the value of medical technologies more broadly. Though the ideas in the two reports are similar, the organization dedicated a report specially for diagnostics, because this sector of the medtech space has unique challenges. 

Value-based payment of diagnostics has so far been elusive. Industry players often point out that although diagnostics influence up to 70 percent of healthcare decisions, they only account for 5 percent of hospital costs and 2 percent of Medicare payment.

"As someone in the business of medical innovation, I can tell you that for industry to succeed it is imperative that we know how to demonstrate and clearly articulate how our technologies can improve patient outcomes and create value," Nadim Yared, AdvaMed chairman and CEO of implantable medical device firm CVRx, said during the call. "The challenge has been that there hasn't been a consistent way of talking about value or even assessing value of medical technologies and diagnostics."

Assessing the value of a diagnostic can be particularly challenging because it can change based on the type of information it generates and how that information is used in different points in a patient's journey through the healthcare system. Though there are a number of value frameworks available through disease-focused organizations and guidelines bodies, most were developed with drugs in mind and fail to capture the impact of diagnostics. 

In its report, AdvaMed outlines four "value drivers" that industry, payers, and providers should consider in assessing diagnostics, including what is the clinical utility in terms of patient outcomes; how does the test influence non-clinical parameters, such as patients' experience of care; what is the footprint on care delivery revenue and costs; and how does it impact public health or the population.

"Stakeholders value and prioritize different things in the health system," May said. "What patients care about, what providers care about, and what a health plan cares about are different, and they prioritize them differently. But ultimately, it comes back to the patient, so we developed a comprehensive approach that keeps the patient at the center."

AdvaMed outlines several core principles that should guide value assessments for diagnostics. To start, one should consider the incentives and priorities of different stakeholders; then, factor in a range of evidence beyond randomized-controlled trials, such as data generated by patients; consider costs incurred and avoided over time; and account for representative populations. The value assessments should also be developed with input from different groups, the methodologies should be openly shared, and evaluations should be updated regularly to keep up with the standards of care and new knowledge.

Additionally, there are a wide variety of diagnostics — screening, detection, prognostic, theranostic, monitoring, and recurrence — and their different characteristics must be accounted for in value assessments, AdvaMed notes in the report. In the case of an early detection screening test, for example, it will be important to consider the risks of a false positive result. For a prognostic test that can assess the chance that a person may one day develop a serious illness, one must consider if the result might change clinical practice or patient behavior.

In an effort to illustrate how this value framework could be applied in the real world, AdvaMed also published several case studies of medical technologies and diagnostics. One example involves Abbott Molecular's Vysis ALK Break Apart FISH Probe Kit, which is used to identify non-small cell lung cancer patients with an ALK rearrangement who would likely benefit from treatment with the targeted drug Xalkori (crizotinib). 

AdvaMed's value assessment process would start by characterizing the specific patient population the test would address — the 5 percent of NSCLC patients with an ALK mutation. It will be important to point out data from studies showing that of the patients that this test identified as likely to benefit from Xalkori, the majority saw their tumors shrink or experienced slower disease progression. Depending on the stakeholder considering the test, it might be of interest to point out that speed is of the essence when determining appropriate therapy, and this test can quickly guide that decision for patients with ALK mutations.

The framework would allow Abbott to discuss the "value drivers" of its test according to the kinds of decisions stakeholders need to make about the test. For example, doctors want to know if they should order the test and patients are trying to decide if they should be tested. It would help them to know the test's clinical impact — that it identifies only those who will benefit from Xalkori. It might also be beneficial to patients to know the test's non-clinical impact, that testing may help them avoid adverse reactions from treatment, particularly if they don't have ALK mutations and are unlikely to benefit from Xalkori. Meanwhile, for insurers who are trying to decide whether to pay for the test, Abbott would have to provide evidence that the test helps avoid costs of unnecessary treatment by getting patients to the right drug.

The case study demonstrates the different stakeholder interests that test developers must consider when creating the value profile for its products. However, May added that policy makers and insurers also must also be open to considering a range of evidence on medical technologies.

Last week, AdvaMed released a separate report to help policy advisors and analysts understand the types of evidence that can inform coverage decisions for medical technologies including diagnostics. In it, AdvaMed spends much time outlining the differences between drugs and medtech, and lays out specific instances when the gold standard randomized-controlled trials would be feasible and when alternate evidence through observational studies or registries might be more appropriate.  

"Medical technologies need a much broader type of evidence development, and technology companies are willing to come to the table with these types of evidence," May said. "We're asking that providers and payors accept multiple types of evidence, as well."

Ultimately, AdvaMed is hoping that the recommendations in its paper will be used by different groups to arrive at a common framework for evaluating value for diagnostics. The group believes that the principles outlined in the paper can be adopted by diagnostics firms charged with generating evidence on their tests, as well as those involved in determining utility and payment for tests, including health systems, providers, payors, health technology assessment bodies, and patient advocates.

AdvaMed CEO Scott Whitaker said during the call that his group didn't put together this framework as an academic exercise, but will work with stakeholders in coming months to "change their perspectives on value" and ensure that these recommendations get incorporated into existing value assessment models.

"We want to use the frameworks as a springboard for the development of potential public policy that aims to facilitate patient access to medical innovation," Whitaker said. "A measure of the success of our initiative will be whether patients have increased access to needed devices and diagnostics in a system that is mainly focused on cost."