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Katarzyna Kolasa talks about the economic value of digital therapies

How Can We Show the Economic Value of Digital Therapies?

by Artur Olesch 5 minute read

Katarzyna Kolasa, Ph.D., is a Professor of Health Economics, author, and Leader of the International Master Program Health Economics & Big Data at Kozminski University (Poland). In a conversation with The Sidebar, she argues for a novel methodology for evaluating digital health interventions. And she inspires as a forward-thinking reformist and tough-minded scientist.

“The healthcare system as we know needs to be sent for retirement,” says Professor Kolasa, and she really means it. Her point of view sounds radical, but for good reason. 

If we look at the health sector over the past 15 years, analyze its shortcomings and consider the rise of digital technologies, it becomes clear that getting out of the healthcare impasse requires honest conclusions that will drive a new mind-shift.  

Does her progressive thinking beyond the framework of classical health economics have something to do with the nomadic lifestyle she has practiced passionately for years? For sure, in both cases, experimentation dominates over the passive agreement with the status quo.

An Outdated System

The existing methodology in health economics was developed within a system framework that prioritized centralized health delivery. It’s incompatible with the currently emerging ecosystem centered around the individual

Therefore, approaches used for the evaluation of medical devices can’t be copied-and-pasted to digital health solutions. Besides, why should we when new technologies make it possible to measure results and pay for them?

Professor Kolasa enthusiastically talks about her passion for translating information into evidence to ensure longer and better lives for patients and a paradigm shift in healthcare. But she does much more than delivering inspiring lectures. 

Digital Health Start Me Up Program

Currently, she is leading the 6-month Digital Health Start Me Up Program at Kozminski University. During this first of its kind academic programs in Europe, participants learn concepts relating to innovation, methodologies for generating clinical evidence, and cost-effectiveness specific to digital health solutions.

In her upcoming book The Digital Transformation of the Healthcare System: Healthcare 5.0, she studies how the digital revolution has reshuffled healthcare during the COVID-19 pandemic, and advocates for a patient-centric ecosystem. This ecosystem empowers patients to take control of their health via technologies such as next-generation sequencing, nanotechnology, artificial intelligence and digital therapeutics. 

We sat down with Professor Katarzyna Kolasa and discussed health economics adjusted to the new digital era.

Professor Kolasa, one of the challenges for digital health developers is demonstrating the economic value of digital therapies. It’s critical for payers. Where should it start?

Digital health is driving the shift toward a patient-centric healthcare system where each of us will have a personal, micro health ecosystem controlled straight from our cell phones.

As soon as patients start trusting digital technologies and enjoy using them, payers will have no choice but to adopt them. We need to acknowledge the fact that digital health has the potential to save money on a scale not seen in healthcare system financing since it was established! 

Today, we spent less than 3% of healthcare expenditure on preventive care. In short, that’s 97% inefficiency. Digital transformation has the potential to take the leap from treatment to prevention. 

For that to happen, a broad consensus about the key value determinants for each type of digital health technology has to be reached. I envisage a checklist or guidelines that would work as an ISO certificate. Potentially, it should be driven by collaborative efforts across many stakeholders, including developers, patients, healthcare professionals and payers. 

How can economic theories be applied to understand the behavior of patients using digital health tools?

We need to acknowledge that we are entering a paradigm shift. But unfortunately, we still lack some critical skills required for this digital transformation to happen. 

Our mindset was formed in the era of the paternalistic healthcare system. And it’s still anchored there. Digital solutions teleport individuals to the next level of sovereignty in health and care. 

The extra-welfarism that set up the healthcare system framework powered by the unlimited responsibilities of budget holders (payers) is gone. I believe it will be replaced with healthcare 5.0 based on two new principles: individual sovereignty replacing paternalism and holistic health replacing the decision-maker’s definition of health. 

Well, it won’t happen overnight but will evolve over time. As Nobel Prize winning biochemist Richard Kuhn described, any paradigm shift has many phases, starting with a crisis. I believe the COVID-19 pandemic was such a crisis for healthcare systems that will trigger change.  

Which factors should be considered when considering the adoption of digital health interventions and their cost-effectiveness?

With a patient focus as the starting point, we should ask ourselves whether we still need cost-effectiveness. Well, I’m a health economist – who would think I would ever say such a thing [laugh].

I mean that cost per QALY (Quality Adjusted Life Year) – a commonly established measurement of affordability – is purely the instrument for decision-makers, not patients. The latter may sometimes derive more satisfaction from social activities than pills. For example, how can we measure the cost-effectiveness of spending time in nature vs. taking antidepressants? 

According to different estimates, the healthcare system influences between 15% and 43% of health status. The remaining part is mainly genetic makeup and socio-economic factors. According to other estimates, the latter hits up to 50% of the total impact on health. So it’s time to reinforce the holistic definition of health and ensure social determinants of health play a role in planning the clinical pathway.

In the digital era, we can collect real-world data on patients’ behavior and adjust access to alternative treatments “on the go.”

DTx are such technologies that feed patients with life-changing knowledge and the healthcare ecosystem with priceless data. 

However, harnessing this power requires a different approach toward reimbursement. Therefore, a new cost-effectiveness framework should be developed. 

What model of reimbursement do you suggest then?

There are already available mechanisms of outcome-based agreements that collect data in a “live” manner, for example, regarding the effectiveness of CAR-T therapies. This is the future for any type of financing mechanism for health technologies. 

In a data-driven healthcare system, value assessment of digital health services and ongoing reimbursement adjustments become possible. I truly don’t understand any reason to not introduce it as a base case for digital health solutions. I hope we’ll be moving into real-time reimbursement at the patient level.

So we should start seeing DTx in a broader context than equivalents of classical therapies but delivered digitally, right?

Today, we can use Big Data to identify predictors of a given illness and even improve the treatment results of the pharmaceuticals. Using DTx, we are able to support treatment adherence and subsequently monitor patients’ progress using mobile applications and real-life feedback. 

Let me give you a simple example: a study of patients with type 2 diabetes mellitus and depressive disorder revealed that virtual assistants could be helpful and effective for improving patient medication adherence. As a result, the average number of appointments per month decreased by 30%. Digital health solutions must be therefore integrated, not just added to the healthcare system.

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