Scaling Precision Health: Time for Smarter Payment Models
By focusing on prevention, early detection, and personalised interventions, precision health promises to reduce the burden of chronic diseases, improve patient outcomes, and make healthcare systems more sustainable. However, scaling precision health requires rethinking how we pay for health and care. We need to reinvent how money flows to be able to change what we pay for: staying as healthy as possible for as long as possible. Most current payment models still reward activity over outcomes, so we must evolve healthcare finance to prioritise prevention and long-term health benefits.
The Challenge of Financing Precision Health
Across Europe and beyond, many healthcare systems still focus on reimbursing curative treatments after diseases occur rather than investing in proactive, predictive, preventive, and personalised interventions.
According to Eurostat, preventive healthcare spending in the EU accounted for 0.65% of GDP in 2021, making up 6.0% of total healthcare expenditure. This was a significant increase from 2020, when preventive healthcare represented only 3.5% of total spending. Although it seems like a great improvement, this is not enough to enable a paradigm shift toward precision health.
In 2021, Eurostat also analysed and compared the expenditures of European countries per inhabitant on preventive healthcare.
While European countries largely operate under universal healthcare models, they still face challenges in funding innovative, data-driven health strategies. The traditional fee-for-service, where providers are paid based on the volume of activities or services they deliver, does not incentivise precision health approaches that focus on keeping people as healthy as we can for as long as we can. On the contrary, the fee-for-service model in healthcare creates a perverse incentive structure that rewards quantity over quality, often leading to unnecessary tests, procedures, interventions and hospital admissions. Since providers are paid for each service they deliver, rather than for patient outcomes or overall health improvements, there is a financial motivation to maximise the number of billable procedures, even when they may not be medically necessary. Instead of encouraging value creation, the fee for service system prioritizes volume, reinforcing inefficiencies and misaligned incentives that do not always serve the best interests of patients.
To encourage the deployment of precision health at scale, financial incentives must shift to reward preventive measures and population health management rather than just medical interventions after illness has already occurred. Precision health also requires long-term investment in data infrastructure, multi-omics research, digital health tools, and patient-centred care models. The question is ‘’how do we redesign how the money flows’’? Can we finance a paradigm shift when many health systems around the world are already struggling to cover acute care? Payment models are so engrained in our health systems, we don’t really know how to get away from them.
Value-Based and Outcome-Driven Payment Models
A transition towards value-based care models is critical, because precision health is ultimately about delivering value to patients and health systems. In these models, healthcare providers are rewarded based on the quality and effectiveness of care delivered rather than their levels of activity – in other words, they are incentivise to deliver value for the patient and the health system. Several European countries have already begun experimenting with new payment models, more in line with value creation including:
- Capitation and Bundled Payments: Some health systems have introduced capitation models, where providers receive a set amount per patient to cover all necessary care, encouraging efficient, holistic, and preventive approaches. Bundled payments—where providers are reimbursed based on expected costs for specific conditions rather than per service—can also incentivize early intervention and better disease management.
- Accountable Care Organizations (ACOs) and Integrated Care Models: Countries like the Netherlands and Sweden have implemented integrated care models that encourage collaboration between primary care, hospitals, and community services. By rewarding overall patient health improvements rather than just individual treatments, these models align well with precision health strategies.
- Pay-for-Prevention Schemes: Some European health systems are exploring payment structures that directly reward preventive interventions. For example, providers could receive financial incentives for achieving population health targets, such as reducing diabetes incidence through early lifestyle interventions.
- Outcome-Based Pricing for Pharmaceuticals and Digital Health Tools: Tying reimbursement for new therapies and digital solutions to their proven effectiveness ensures that only interventions with demonstrated benefits receive funding, reducing waste and promoting precision health principles.
Policy and Systemic Changes
Governments and health authorities play a crucial role in enabling this transition. Key steps include:
- Aligning Reimbursement Policies with Prevention Goals: Expanding coverage for predictive diagnostics, genomic and multi-omics screening, and digital health tools can accelerate precision health adoption.
- Investing in Health Data Infrastructure: Secure, interoperable health data systems are essential for implementing precision health at scale. Policies should support data sharing while ensuring privacy and security.
- Encouraging Multi-Stakeholder Collaboration: Policymakers, payers, providers, and technology innovators must work together to develop sustainable financing models for precision health.
Conclusion
Scaling precision health across global health systems, particularly in Europe, requires a fundamental rethinking of how healthcare is financed and incentivised. Moving away from activity-based reimbursement towards value-based care, investing in innovative financing mechanisms, and fostering collaboration between public and private sectors are all critical steps. By making these changes, health systems can shift their focus from treating disease to actively predicting and preventing it — delivering better health outcomes and long-term sustainability.
If you have been working on this topic and have a strong point of view on this essential question to enable precision health, please email me at pascal@editohealth.org. It will be one of the key topics examined at #RadicalHealth to answer our broader question: ‘’how do we operationalise precision health?’’.
Pascal Lardier, Principal, éditohealth and Content Lead, Radical Health Festival
