Implementing Performance-Based Contracting in Digital Health Solutions: A Guide for Purchasers

In recent years, digital health solutions have risen to the forefront of healthcare innovation, offering new tools for patient care, monitoring, and data-driven interventions. However, as adoption grows, purchasers face challenges in aligning payment structures with the actual performance and value generated by these technologies. To address this, the Performance & Health Technology Initiative (PHTI) has released a detailed playbook aimed at guiding purchasers on how to implement performance-based contracting with digital health solutions.

Performance-based contracting represents a shift from traditional payment models. Instead of paying solely for access or volume, these contracts tie compensation to the achievement of specified health outcomes, improved patient experiences, or cost reductions. This method incentivizes digital health companies to develop and maintain solutions that deliver tangible benefits and ensures purchasers receive value for their investments.

The PHTI playbook articulates essential components for purchasers considering performance-based contracts. Key focus areas include:

1. Payment Models: Exploring various payment structures that can be aligned with performance metrics, including milestone-based payments, risk-sharing arrangements, and value-based purchasing.

2. Outcomes Definition and Measurement: Establishing clear, evidence-based outcomes that digital health solutions are expected to achieve. This includes clinical, economic, and patient-reported outcomes, alongside methodologies to measure and validate these results.

3. Accountability Frameworks: Defining roles and responsibilities, data-sharing agreements, and mechanisms to ensure transparency and enforce contract terms.

4. Implementation Practicalities: Addressing operational challenges such as integrating contracts into existing procurement processes, data interoperability, and stakeholder engagement.

This playbook serves as a strategic resource for healthcare purchasers, including payers, health systems, and employer groups, seeking to optimize their investments in digital health. By embracing performance-based contracting, purchasers can drive higher standards of care innovation while managing risks associated with new technologies.

The emphasis on outcomes and accountability also resonates with broader healthcare trends prioritizing value over volume. As digital health solutions proliferate, effective contracting models will be pivotal in accelerating adoption and maximizing impact on patient care. PHTI’s guidance offers a timely framework to navigate this evolving landscape.

Source: PHTI: How Purchasers Can Implement Performance-Based Contracting with Digital Health Solutions