Two years ago, less than one-quarter of health plans had outcomes-based contracts, according to Avalere.
About 60% of insurers use outcomes-based contracts (OBC) with prescription drug manufacturers, according to an Avalere survey released Tuesday.
Compared to the first survey conducted in 2017, the amount of health plans using OBCs increased 35%, with nearly one-third of insurers reporting that they utilized more than 5 OBCs. Another 21% of health plans had two to five OBCs in place.
For insurers with an OBC, an agreement that ties reimbursement to "clinical, quality, utilization, or financial" outcomes, the primary advantages were cost savings and clinical improvements.
In recent years, health plans have embraced OBCs as a method of contracting that is not linked to a formulary while seeking to achieve value-based pricing for prescription drugs.
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Achieving advertised value, improved patient management, and real world information capture were additional advantages cited by insurers with OBCs.
Sarah Donovan, health of client solutions, marketing and operations at Avalere, said the survey findings indicate a greater willingness by insurers to embrace OBCs, given the continued growth in such arrangements.
"[OBCs] can provide payers and life sciences companies with an innovative and effective approach to pursue high-value care that is ultimately beneficial for patients," Donovan said in a statement.
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Respondents in the Avalere survey did note some challenges associated with having OBCs, including expectations for cost savings, incentives to put arrangements in place, and methods utilized for measuring value, among other concerns.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.