Healthcare companies are being challenged to reduce costs while delivering innovative, quality care. A host of factors—shrinking reimbursement, penalties for quality shortfalls, more assertive payers, and the increasing transparency of provider pricing—are challenging traditional operating assumptions. Some of these changes are mandated by recent legislation, and others are market responses to this fundamental mandate for better quality at lower cost.

For pharmaceutical manufacturers, navigating this transition depends on understanding how to effectively engage healthcare delivery customers that look and behave differently. Specifically, rising cost pressures, stiffer financial penalties, and the imperatives of healthcare reform are forcing hospitals and health systems to develop new commercial models. One emerging tool is the integrated delivery network (IDNs) designed to aid the transition to a more value-based paradigm. Many health providers doing business with pharma are actively consolidating and/or creating alliances to develop them.

However, there is no common IDN model. Provider organizations vary in their development of and preparedness for a new business model.  Some IDNs have well developed procedures for managing clinical variation and are assuming risk for a population, while others are just beginning to establish the infrastructure for managing populations and risk. And there are still others that are just trying to conduct business as usual.

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