Value-based healthcare: what comes next?

Alexandre Lourenço

More than 15 years have passed since the publication of Michael Porter and Elizabeth Teisberg's iconic book Redefining Health Care.

As a seasoned consultant, Porter delivered a simple message: Value-Based Healthcare (VBHC), an attractive concept to healthcare professionals, providers and payers. Presented as a solution to the health care crisis in the United States, the concept of value – the relationship between results and the cost to achieve them – quickly spread throughout Europe, South America and Australia. Like a magic potion, it provided a solution for almost all health-system problems: addressed fragmentation, variation, over-provision of care, financial lack of sustainability, medical errors, clinical compromise, lack of trust, patient disengagement, etc.

Challenging stimuli predicting the future

David Font
 

Photography by Alejandro García (EFE) 

I reread an article published in 2014 in the British Medical Journal, "A Glimpse into the Future: Typical day in the NHS in the year 2050", in which Hannah Wilson, a student at Imperial College, imagines a healthcare system that screens patients admitted to Singapore and New York from London, within the framework of a global hospital, and which operates on patients by remote surgeons using robots. The Euthanasia Department and the Genomics Clinic are, for her, hospital departments in 2050. She describes patients convinced of the suffering of two diseases when they know their genomic sequence and also "digitally addicted" patients in times when a day may end up in an isolation pod due to a virus raised to epidemic levels.

Medical services, an anachronism

Jordi Varela
Editor

 

@varelalaf

Clayton Christensen says that if you want to be efficient, you have to offer services as close as possible to where the need arises. Michael Porter and Thomas Lee, for their part, defend the creation of Integrated Practice Units (IPU), while those of Corporate Rebels affirm that attractive projects are made because of the commitment of professionals and not because of the hierarchical command structure. This post is contrary to the status quo of hospital organization charts and, for this reason, I have chosen these three references that, from various perspectives, direct us against centralism, corporatism, and the hierarchy that current medical services give off, anchored in a vision more typical of the last century than of the demanding complexity of today's health problems.

Baker's Decalogue for high-performance healthcare organizations

Jordi Varela
Editor

 

Americans trust that competitiveness is the essence of human activity, which has made them the world's leading power, with China's permission. This principle, however, has not worked for them when they have applied it, without palliative, to their health care system, which is showing clear signs of poor performance: it’s very costly, it’s inequitable and it’s showing poor results. For this reason, some public health care organizations such as Veterans Affairs and Medicare, or private, such as Mayo Clinic, Cleveland Clinic or Kaiser Permanente, are trying to put sanity, analyzing what are the keys to improve the performance of the system.

Narrative, expectations and relevant outcomes for patients

Gustavo Tolchinsky

At the beginning of my medical residency, I used to experience some frustration with some patients whom, despite having gone through a correct assessment and having been diagnosed with a treatable and straightforward pathology, when they were discharged, they were still not satisfied. After some time, I began identifying that at least one of my mistakes was in my approach to patients. Excessively focused on diagnosing a pathology as if I were to “nail it” in an exam, I wasn’t paying attention to what led the patient to visit me, their concern; this couldn’t be solved by giving a mere diagnosis and treatment. When we go through these situations, we find it traumatic, frustrating and disconcerting. On top of that, this may lead to over-acting that only leads to over-treatment due to repeated patient demand at different points of the system. This could be because the clinical solution we offer does not solve those concerns that went unidentified in the clinical interview, or that the patient's expectations are ill-adjusted to realistic results and these, therefore, are unattainable.

Measuring the effectiveness and value of clinical practice

In the "XIV Conference of the Sign Foundation", Jens Deerberg-Wittram, Director of the Boston Consulting Group, gave the inaugural lecture entitled "From volume to value". It was a very timely speech, at a time when the obsessive control of budgets and waiting lists prevents clinicians and managers from reflecting on what contributes so much care activity to society. The concept of value expressed by the German speaker is very new for healthcare managers, who tend to understand clinical effectiveness as a rhetorical concept more typical of epidemiological studies.

Share the decisions table: one more step in the patient's experience

Mònica Almiñana

During the past Christmas holidays, many of us have shared a table with family and friends. Can you imagine if we did it with our patients to decide how we should evaluate their diseases?

That is what the Karolinska Hospital in Stockholm (Sweden) effectively proposes: a whole revolution in the way of understanding the care process. For those who don’t know, the Karolinska is one of the largest and most innovative university hospitals in Europe. It serves a total of 1.5 million patients per year, with a newly built infrastructure that houses 1,600 beds and employs 15,800 people.

Proximity versus quality

The proximity of the health services is a highly appreciated and defended value; not in vain regional hospitals have proliferated throughout the country as an essential instrument for territorial balance. The local organizations and the small communities have understood this and have protested fiercely against any councillor who has dared to suggest that it might be convenient to close some low-performing service. It seems generally accepted therefore; that the proximity of services is a value that favours the accessibility for dispersed populations and improves the equity of the system. However, it doesn’t escape anyone that too often, maintaining the quality of certain services when located far from the centres of reference is a challenge in itself.

This reflection has come to my mind after reading an article in the New England Journal of Medicine by Michael Porter and Thomas Lee "Why strategy matters now". One may rightly say that this source is a little far-fetched for the dilemma that I raised, especially and fortunately because the problems of our health system are very different from those of the North American system, but in return, I’ll insist that after rereading it, it seemed to me that the recipe of the two authors from Harvard can be useful in offering rational elements to the controversy around the proximity – an issue that always seems to be politicized.

Let's consider Porter&Lee’s 6 strategic proposals that can be tailored to our concerns:

1. The main objective of any strategy must be the value it brings

To give a couple of examples, in a strategy of chronic disease, community work is a value in itself; on the other hand, for the infarction code, the efficacy of clinical action is the tracer axis, so the planner must know how to balance the dispersion of the services with the excellence of the results.

2. Organization charts must be redesigned according to the needs of patients and processes

We ought to abandon the current organizational charts based on bodies, systems and levels of care and advance to multidisciplinary teams that are organized according to the needs of patients, who are responsible globally for clinical processes and that are accountable according to the value obtained ( remember that Porter’s value is the relation between clinical results and costs).

3. The portfolio of services must be adjusted to the organization’s capabilities 

In order to fulfil the main objective, hospitals must identify the services in which they are able to provide value, declining to maintain an offer that doesn’t correspond to their real possibilities or to the desired results. This adjustment is valid both for the regional hospitals’ historical difficulties in retaining talent, as well as for mid-level centres that despite all reason, focus on tertiarism as a sign of identity.

4. Clinical management units should be oriented to clinical effectiveness

The multidisciplinary teams must evolve towards "integrated" clinical management units when they have the capacity to approach a sufficient number of patients and the results obtained are good enough. In this situation, the units must be endowed with the essential resources, and even financing models based on adjusted capital or objectives, as the case may be.

5. Synergies can solve many of the current problems

To overcome the problems of excess installed capacity, duplicities, or the desire to act beyond the real possibilities, organizations must have the vision of generating synergies to solve these imbalances. Concentrating services to a single point or sharing professional teams are two strategies that, when they have been implemented rightly, yielded good results.

6. The referring hospitals must elaborate more strategies by looking at the territory

We ought to further deepen the current strategy of opening referring hospitals in the territory, with all kinds of agreements with hospitals of lower hierarchies. In the same way that it’s not good for regional hospitals to practice tertiarism, it’s also unreasonable for referring centres to dedicate their costly structures to solving case-mix typical of community centres.

It would be advisable that we take advantage of the lessons of Michael Porter and Thomas Lee in order to overcome the dilemma of proximity versus quality, generating more professional and social debate about the value of health services, since it’s pointless to have an emergency unit at every corner if we can’t support them, every day of the week and all hours of the day (and night), with qualified professionals.

Jordi Varela

Editor

Measuring the value of anti-cancer drugs

Cristina Roure

Anti-cancer drugs, especially palliative drugs, are toxic, costly and sometimes of little benefit, as a result their value to the patient and society are often questionable. It’s also true that significant improvements in the survival rates are threatened by the difficulty in accessing them, due to their unsustainable cost.

Primary care: segment to reform?

In a paper published in Health Affairs, Redesigning Primary Care: A strategic vision to improve value by organizing around patients' needs (see commented post) Michael Porter invited us to rethink the organizational model of primary care in accordance with the real needs of the population.

Following the Porterian advice, and just to think a little, it’s worth the excellent Memory of the Catalan Institute of Health (ICS) of 2013, with data from 288 primary health care teams spread throughout the territory, from small local clinics to metropolitan centres with several basic health areas under their care. On page 7 of the document you will see a table elaborated with the attendance of more than 4 million people (who have been visited at least once during the year). The segmentation of this population, grouped with Clinical Risk Group, shows that segments 5, 6 and 7 (different intensities of chronicity) have represented 64.5% of the people who have visited, a group that has consumed 88.8% of the pharmacy and generated 74.7% of urgent hospitalizations (among patients who have been hospitalized two or more times in a year).

Measuring results in health is still very complicated

In order to evaluate health institutions based on the value they provide, health outcomes must be measured. However the efforts to achieve this are bearing dismal results. Pay-for-performance initiatives are drifting in an ocean of indicators that don’t translate into anything too operational. To give some examples, in the US, CMS (Medicare and Medicaid) handles nearly a thousand indicators to promote new funding models (see Health Affairs Blog "The Quality Tower of Babel") and, not so far away, in the Results Central of Catalonia (AQuAS), more than 300 indicators are recorded. Everything suggests that the excess of information will not bring light if we are not able to clarify what it means to add value to people's health, and to make this statement comprehensible, we must distinguish between two different approaches:

Health value for citizens

A long life free of disability is a goal that most mortals share but this indicator is not very useful for service providers because the impact of the health system on life expectancy barely reaches 20%.

Modern clinical management: the basics

In recent decades, clinical management has had a couple of conceptual disruptions that have generated interest in the welfare act as an object of study. The first was when, in the early 90s a group of epidemiologists moved clinical epidemiology from the academy to the consultation and developed evidence-based medicine; and the second came when governments and health professionals became knowledgeable about the clinical work’s ability to do harm. The "To err is human" from the Institute of Medicine report in late 1999 was the turning point of patient safety programs. Now, in the second decade of the century, starting from those two fundaments (security and evidence), all the interest is in knowing what is the value that clinical practice brings to the health of people.

The conceptual foundations of modern clinical management

+ smart + connected = + effective

Michael Porter has published another anthology document, in this case for the industry; and the question raised is paramount, the one regarding the interconnectivity of products. According to the authors, the main value that industries of the last century conveyed to consumers was the quality, or the durability, or the performance of their products; but with the advent of computers, the value of adjustment to the circumstances took hold. Hybrid cars and robotics are examples of this. But Porter and Heppelmann explain that now the products, besides being smart, should come embedded with interconnectivity of origin, and argue that in the future this will be the differential value for competitiveness.

"Smart and interconnected products -the authors say- will change the consumers’ perception, but so will the rules of the competition game, so the industry will be affected by this new setting. The new wave of information technology improvements will result in disruptive improvements in the capabilities of products and services, which will result in radical changes in the world economy and human relations".

Integrated Practice Units: trust us, we’ll deal with everything

Michael Porter’s book "Redefining Healthcare" provides the basis of the value chain of a clinical trial. He says: don’t worry so much about the clinical practice guidelines, focus, instead, in sharing with the patient the health goals that you reasonably expect to obtain, clarify either how much of the outcome depends on the patient or how much depends on the professionals involved. Then focus on measuring the achievements in order to know at what cost you achieved them and compete in the healthcare market with these values in hand.

The clinical process’ difficulties should not cause you to lose focus: the clinical effectiveness is the only objective.

According to the methodology Care Delivery Value Channel (CDVC), the creators of a clinical trial should be able to define how to address each of the stages of a clinical trial: prevention, diagnosis, preparation, response, recovery and follow-up or monitoring. At the same time it must be ensured that the patient flows through the process smoothly, without any surprises or poor coordination, but with assurances and being kept well informed.

Integrated Practice Units: what for?

Hospital medical divisions are based on rigid organizational charts, in accordance with the official medical specialties. This organizational model is quite efficient when you need to provide services to patients with acute pathologies, especially when the derived procedures are more or less standardized. But in any other circumstances, of which there are plenty, the shortcomings found in coordination between medical services often cause frankly disappointing results that leave a lot of room to be improved.

In the fields of Mental Health and Oncology, particularly those sensitive to transversality, long ago instruments designed to overcome the closed compartments (circuit meetings, tumours committees) were created. These organizational models are based on protocols, individualized treatment plans and a lot of intense coordination; and, as a consequence of the positive results of these experiences, we have witnessed the emergence of the Integrated Practice Units, which are often initiatives that want to go beyond simple coordination, although most of them fail to overcome two tough limitations: real management autonomy (can they contract?) and lack of own resources (do they have an attached budget?).

Integrated Practice Units

At the moment, we're seeing many official initiatives aimed at giving legal backing to the establishment of Integratec Practice Units, precisely to overcome the above obstacles and thus get more management autonomy and accountability of clinicians in the management of resources. Even admitting that this new framework is encouraging, the question remains:  Why do we want Integrated Practice Units? Will they bring more value or end up as a new constellation in the firmament of the chaotic management of patients with complex and little standardisable pathologies?

Deconstruction of primary care

The renowned Harvard professor Michel Porter, with the collaboration of two GPs, one veteran, Thomas Lee, and the other on training, Erika Pabo, applied to primary care their well known proposals of adding value to clinical performances. Their article, published in Health Affairs, caused me to act cautiously because I didn’t believe any American proposal of reforming primary care could benefit us as we enjoy a much more evolved model. But when I noticed that the first author was Michael Porter, I couldn’t help taking a look.

Primary care (gatekeeper type), Porter and his colleagues say, is now served on a single dish, like a stew (they don’t actually say that). Continuous care prevails, always the same chef for every meal, an almost artistic development, case by case, plate by plate. According to them, this makes it difficult to measure the provided value. On the other hand, the most common model in the US, where the patient goes to a specialist in their own terms, is chaotic and promotes a disproportionate consumption of resources.

High Value Healthcare: Porter and Lee proposals

Michael Porter, professor at Harvard Business School and Thomas Lee, Medical Director at Press Ganey, an organization aimed at improving the patient healthcare experience, published an article on the HBR Blog Network:  "Why health care is stuck and how to fix it". These two teachers, tired of analyzing the stubborn (and chaotic) reality of the American healthcare system, have decided to focus on making strategic proposals to change things.

How can it be that with so many good and well-intentioned people involved in reforming the American health system, they can’t find a solution? Almost the opposite happens: it seems that the opposing positions are increasingly reinforced.

The authors ask this rhetorical question, although they, far from disenchanted, still insist on the idea that solutions can only be systemic, as this is where the problems lie in the model.

How the health value can be measured?

At first, talking of health value seemed as if it was initiating a debate in the area of epistemology. Instead, in the hands of Michael Porter, this issue becomes very practical: “What results in terms of health have been achieved and what were the costs?”. Put this way, it seems fairly clear, but then it’s logical to ask ourselves: What is an outcome in terms of health?

As the renowned Harvard professor sees us, the ones dedicated to this, as a bit stuck, he gives us a clue in the following table, proposing three levels of results (tiers) and two subgroups within each.

Now, with the previous table on the retina, let's get into the skin of a Integrated Practice Unit who needs to present their clinical results, beyond the usual indicators of suitability and efficiency. If, for example, we think of a functional unit responsible for an oncologic process, a very important fact should be the survival of patients treated in a given period, say five years. And while admitting that this would be very useful information, we have, however no knowledge at this point as to what are the survival factors attributable to the different oncologic units.

Better health per dollar spent

"Better health for dollar spent", Michael Porter’s celebrated phrase, summarizes, like no other quote, the spirit of the current focus of clinical management. Porter is a professor at the Harvard Business School renowned worldwide for his work on company strategy and competitiveness. This professor shocked the world of health services when in 2006 he published ”Redefining Health Care", a book in which the author put his finger on the pulse of the American health care system, when he said he did not understand the organization in specialties that had little to do with the needs of patients. Neither did he understand how there were no indicators to measure the value that the ”health industry” contributed to the people’s health, nor how the clinical activities are remunerated per volume of work done, regardless of achieved health outcomes.

In an article in JAMA in 2007, Porter said that competitiveness in values ​​is the basis of the economy and that in the health system only the doctors can achieve it, if they set themselves the goal that clinical activities have a final purpose and not a meaning in themselves.