Certainly, some of that growth has already taken place. A January 2019 survey by Decision Resources Group showed that 22% of management organizations already had results-based contracts, while 49% were expected by the end of the year. Cardiology, oncology and hepatitis C were the most frequently covered indications of results-based contracts. Types of value-based contracts in the marketplace include those that measure reduced or no use of adjunk drug treatment, reduced total cost of treatment, discontinuation of treatment, replacement clinical measures that may yield better long-term outcomes, or a reduction in a single parameter of health use. Current projects should have exit options. Some agreements involve long or ongoing work. Agreements can be made to reward service providers for the duration of a contract and thereafter. For example, if a supplier`s role is to increase revenue and the supplier does, when does its rewards stop? If his mission was a single job, should he still receive a payment if the monthly sales goals are met as a result of his work? This is a plausible scenario if the provider is a web designer who promises a minimum number of monthly sales of a website he has designed. Situations like this must have severe final data or exit options for both parties.
There are some variations in the results-based basic procurement model, but all results-based contracts generally have the following three fundamental characteristics: this means that one size is not suitable for everyone. A results-based approach is not always appropriate and some services, sectors and organizations will naturally be better able to take full advantage of this contractual model than others. In some cases, an organization`s objectives can be properly served, for example by sourcing a particular product. Hybrid contracts, which define both results and process specifications, are often used in the public sector for large projects. Despite the many benefits received by both clients and service providers who participate in results-based contractual agreements, this contractual model is still not standard practice. Here are some of the key challenges businesses face and understand in successfully implementing a results-based strategy. The move to such contracts marks an abandonment of the environment that drug manufacturers have traditionally appreciated, where medical decisions about drug use have been made regardless of their price, but manufacturers are increasingly being asked to demonstrate the value of their products.