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  • Outcomes and costs are not independent Cost containment model doesn’t work; we’ve tried it for 20-30 years, need a new model The system isn’t organized to create value E.g., through the right diagnosis (Cleveland Clinic second opinions example – 17% of diagnoses changed) Fewer failed or unnecessary treatments Cancer drugs 10% effective; rewarded failure with more revenue Prevent/maintain health versus treat (or treat earlier in progression) Need to organize around getting to better health, not treatment/“doing stuff” You shouldn’t have to pay more for excellent quality (E.g., P4P) Good quality is usually less costly – the cheapest option is to be healthy Ability of quality to drive costs greater in health care than any industry I have encountered
  • No group learning in “teams” of this sort. Improvement
  • Switch clinical judgment and satisfaction
  • Often reporting the wrong information with the wrong focus/wrong units of measurement Have to measure outcomes and ultimately costs and prices Value makes access relevant Value drives equity Failure to measure value is self-inflicted wound Brings on micromanagement, loss of autonomy
  • Set of outcomes Best outcome measures in the past have resulted from government action Cardiac: 41% reduction in mortality, first four years (CABG) IVF care What you measure matters, and affects results More than one measure Patients will benefit even if they don’t use measures Patients will use eventually Charge medical societies Date certain; otherwise government will convene groups to determine
  • KFSYSCC cited stage and co-morbid conditions (including COPD, and coronary artery disease etc.) as candidates to inform risk adjustment TNM Staging: Breast Cancer Primary tumor (T): TX: Primary tumor cannot be assessed. T0: No evidence of primary tumor. Tis: Carcinoma in situ (DCIS, LCIS, or Paget disease of the nipple with no associated tumor mass) T1: Tumor is 2 cm (3/4 of an inch) or less across. T2: Tumor is more than 2 cm but not more than 5 cm (2 inches) across. T3: Tumor is more than 5 cm across. T4: Tumor of any size growing into the chest wall or skin. This includes inflammatory breast cancer. Nearby lymph nodes (N) (based on looking at them under a microscope): NX: Nearby lymph nodes cannot be assessed (for example, removed previously). N0: Cancer has not spread to nearby lymph nodes. N1: Cancer has spread to 1 to 3 axillary (underarm) lymph node(s), and/or tiny amounts of cancer are found in internal mammary lymph nodes (those near the breast bone) on sentinel lymph node biopsy. N2: Cancer has spread to 4 to 9 axillary lymph nodes under the arm, or cancer has enlarged the internal mammary lymph nodes. N3: One of the following : Cancer has spread to 10 or more axillary lymph nodes.  Cancer has spread to the lymph nodes under the clavicle (collar bone).  Cancer has spread to the lymph nodes above the clavicle.  Cancer involves axillary lymph nodes and has enlarged the internal mammary lymph nodes.  Cancer involves 4 or more axillary lymph nodes, and tiny amounts of cancer are found in internal mammary lymph nodes on sentinel lymph node biopsy. Metastasis (M): MX: Presence of distant spread (metastasis) cannot be assessed. M0: No distant spread. M1: Spread to distant organs is present. Estrogen & Progesterone receptor status can matter because if receptors are present, a response to hormonal therapy is possible.
  • Innovations are now often discouraged Treatment-based, service-based reimbursement penalizes innovative providers (less complex DRG Revenues can go down faster than costs Current view is that high-tech raises costs. In value-based competition with results measurement, it will not Organizational and process innovation is really crucial, not just technology. Problem with technology-driven cost increases comes from deploying technology piecemeal Cleveland Clinic M.D. Anderson In most medical conditions today, there is now some way to address them. Most innovation will reduce costs from the cycle perspective going forward. Example – Diabetes In the current system profits from acute treatment have to be used to subsidize prevention such as podiatry Providers should be rewarded for success, not failure – right now care improvements lead to reduced reimbursement DRG system is 15% of the way Now contracting for full care cycles in organ transplants; future of health care
  • The market system not the problem, it’s the kind of market we’ve created Disconnect: pay for services; shifting costs; capturing bigger share of revenue

0 4 Introduction Teisberg 0 4 Introduction Teisberg Presentation Transcript

  • Value-Based Health Care A Global Perspective Basel, Switzerland 8 October, 2009 Professor Elizabeth Teisberg Darden School, University of Virginia and The Institute for Strategy and Competitiveness, Harvard Business School ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • What are the problems in health care? ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Everyone knows 3 things about U.S. health care: !  Extremely costly per capita !  Fails on equity: 40 million people are uninsured !  Population-wide outcomes are not better WHY? Competition in the U.S. system occurs over cost shifting. Zero Sum competition divides value and increases costs. Positive sum competition to improve health results creates value. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Other Insights on U.S. Cost Drivers Poorly designed for chronic care; often excellent results for complex acute care •  Chronic care is 65-80% of costs --Wrong structure drives costs up •  Employers pay 3x more for poor health than for health care •  Improving value requires innovation in structure & organization Provides universal access to emergency room care only, •  less effective AND less efficient •  Cutting early stage care ADDS expense Committed $25 billion to eHealth •  Could enable redesign for coordination & measured outcomes •  Or, may simply automate today’s systems and accelerate spending ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • The goal of health care reform? ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • The goal of health care reform? Current US reform will be insurance reform. Health care delivery transformation will unfold through additional efforts. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Value in Health Care Everyone must be in the system for equity and efficiency. Then, to control spending, the choice is to limit health care or improve value. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • In every nation The challenge is to drive dramatic and ongoing improvements in health care value. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Five key ideas in Redefining Health Care ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Opportunities for Value-Based Health Care Delivery Improving Value ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Value in Health Care Efficiency is a function of Quality. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Patients want more health, not more treatment. INSEAD Ca Health Alumni re Summit 2009 ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • In health care, the best way to contain costs is to improve quality Quality drives efficiency in many ways: -  Prevention - Fewer complications -  Early detection -  Fewer mistakes and repeats -  Right diagnosis -  Less invasive treatment methods -  Early and timely treatment -  Faster recovery -  Treatment earlier in the causal chain -  More complete recovery of disease -  Less disability -  Right treatment to the right patients -  Fewer relapses or acute episodes -  Rapid care delivery process with - Slower disease progression fewer delays - Less need for long term care Better health is inherently less expensive than poor health ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Value-Based Health Care Delivery Restructure Care around Patient Solutions ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Definition of a Medical Condition •  Includes the common co-occurring conditions –  Diabetes is not just a disease of the pancreas; –  Includes multiple diseases that often occur together •  Extends through the full cycle of care –  Consider breast cancer a medical condition ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Migraine Care in Germany Old model Organized by Imaging Outpatient Physical Unit specialty in discrete, Therapist fragmented services Outpatient Neurology Inpatient Primary Treatment Care and Detox Physician Outpatient Psychologist Source: KKH, Westdeutsches Kopfschmerzzentrum ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • West German Headache Center New model Imaging Unit Integrated Practice Unit West German Primary Headache Center Essen Patient Value is Care Neurologists Univ. Inpatient Docs. Psychologists the beacon of Physical Therapists Unit inspiration for Day Hospital organizational Network innovation. Neurologists Source: KKH, Westdeutsches Kopfschmerzzentrum ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Opportunities for Value-Based Health Care Delivery Redesign Teams for Clinical Integration ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Teams and Medical Conditions •  Define to offer patients and families a solution to their medical circumstances •  Organize for patients •  SUVA The coming tidal wave of chronic disease makes redefinition of care structures an urgent priority. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Clinically Integrated Care Team or Collection of Fragmented Services? ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • •  Learning •  Health Outcomes •  Clinical Judgments •  Efficiency •  Coordination •  Research •  Satisfaction ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Driving Learning Broad expertise develops over the care cycle for the patient. Attention to results enables and inspires improvement. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Value-Based Health Care Delivery Measure Results to Accelerate Learning ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Outcomes should be universally measured and reported •  For medical conditions over the cycle of care !  Not for interventions or short episodes •  Not for practices, departments, clinics, or hospitals •  Not separately for types of service (e.g. inpatient, outpatient, tests, rehabilitation) •  Results must be measured at the level at which value is created for patients ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Measurement of health care outcomes •  To accelerate learning and improvement: Measure and report risk-adjusted outcomes by clinical team and by medical condition. •  To accelerate universal measurement and overcome hesitation: The government should actively support outcome measurement. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Outcome Measures have multiple dimensions Health Survival Status Achieved Degree of recovery, health, capability Recovery Time to recovery or return to normal activities Experience Care process consequences (e.g. pain, complications, errors; self-care knowledge, confidence) Sustainability of capability or health over time Sustainability of Health Long-term consequences of therapy (e.g., care-induced illnesses) ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Measuring Value: Essential Principles •  Clinicians need to measure results in order to drive value improvement and learning •  Outcomes should be adjusted for patient initial conditions •  Outcome measurement should not wait for perfection: Measures and risk adjustment methods will improve rapidly •  The feasibility of outcome measurement at the medical condition level has been conclusively demonstrated Failure to measure outcomes will invite further micromanagement of physician practice ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Opportunities for Value-Based Health Care Delivery Align Medical Success and Financial Success ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Today… Financial success of Patient system participants success Shift reimbursement to… Bundled prices for cycles of care, not global budgets or payment for discrete services. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Effective, sustainable changes in incentives require changes in structure and organization. •  Bundled reimbursement for care cycles, by teams. •  Pay for prevention, screening and diagnosis, not just treatment. •  Pay for overall management of chronic conditions. •  Adjust for patient complexity. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Thinking in redefined terms ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Current Model v. Redefined Model The product is treatment The product is health Measure volume of services (# Measure value of services tests, treatments) (health outcomes per unit of cost) Focus on overall facilities, Coordinated and integrated care specialties or types of delivery practitioners Discrete interventions Care cycles Individual diseases or overall Sets of prevalent co-occurrences facilities Fragmented, localized, pilots. Integrated care delivery systems programs and entities ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Care delivery redefined •  Patient centric: Value-creating care solutions •  Clinician led: Teams treating medical conditions over the full cycle of care •  Results driven: Measuring patient outcomes to accelerate learning •  Value based: Paying teams for value ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter
  • Slides and information posted on: http://www.hbs.edu/rhc/speaking.html Published by: economiesuisse, Zurich; Klinik Hirslanden AG, Zurich; Interpharma, Basel ; Swiss Insurance Association SIA, Zurich, und Swisscom IT Services AG, Bern. ©2009 Elizabeth Olmsted Teisberg , Scott Wallace and Michael E. Porter