For the Record with Joe Galatowitsch, Managing Director, Life Sciences with Guidehouse

Q&A published in Medical Alley

How did you end up at Guidehouse?

I’ve worked in med device for almost 40 years but got into consulting about 12 years ago when I co-founded a medtech consulting firm called Dymedex. Dymedex focused on market development for medical devices; we were acquired by Guidehouse in 2016. I now lead the medtech practice within Guidehouse.

In order to accelerate the growth of value-based agreements, what incentives need to change?

At the most basic level, fee-for service is the primary business model that stands in the way of broader usage of value-based agreements. The challenge is related to how to create win-win-win as we cross the chasm from fee-for-service to outcome-based business models.

Is the rise of value-based care inevitable?

Yes, but not for everything. There will always be some services and care models that are better served by pure fee-for-service or other non-risk-based models.

What piece of common sense in healthcare is actually bad advice?

Shopping for healthcare services based on cost or price. I think this is a bad idea on many levels. While it may make sense in some narrow cases, price simply does not translate from a consumer model to a healthcare services model.

Risk-based contracting and other value-based tools are complex, maybe too complex for smaller organizations. Is there a path forward for small- and medium-sized companies in value-based care?

I believe the answer will be yes, but it may spring from the provider or insurer. A provider, a large manufacturer, and an insurer could develop an index risk-based model for a given disease or procedure, and then the provider or insurer goes to smaller manufacturers with an offer to “participate” in the same model with potentially slightly less attractive terms. Or potentially after a successful index contract, the provider puts the proven model out for bid to all suppliers.

Data to measure outcomes, costs, and value seems to be central to the value-based care equation. What are the biggest challenges in the use of data in VBC?

The first challenge is related to what should be measured. Then there is the burden of accurately and completely gathering the raw data, adjusting the raw data, and then applying it to the risk-sharing algorithm. One of the big issues here is the question of “Is the juice worth the squeeze?”

Read more: For the record with Joe Galatowitsch
Back to top