Creating new value in healthcare

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Over the last two decades many industries have changed their value proposition by developing their customers’ capacity to create value. Healthcare is only just understanding how this might transform its own value proposition. Globally some parts of healthcare are beginning to make the changes that will involve patients, carers and their communities more fully in their own healthcare.

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Creating new value in healthcare

  1. 1. Global themes for a global conference Dr Mark Britnell Chairman and Partner KPMG’s Global Health Practice @markbritnell
  2. 2. 1© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Member of the World Economic Forum Global Agenda Council 60 countries, 170+ occasions.
  3. 3. How much change do you expect in the shape of the provider system and their business models in the next 5 years? Source: KPMG pre-conference surveys: Rome 2012 and London 2014 3% 16% 53% 13% 16% 11% 19% 30% 37% 4% 0% 10% 20% 30% 40% 50% 60% Extremely sustainable Very sustainable Somewhat sustainable Not very sustainable Not at all sustainable 37% 61% 3% 0%0% 52% 41% 4% 0% 4% 0% 10% 20% 30% 40% 50% 60% 70% Major changes Moderate changes Minor change No significant change Not sure Rome 2012 London 2014 “The current business models operated by hospitals in my system are...” 72% think existing hospital business models are sustainable but 98% expect moderate or major change to their health systems Do they believe change starts with someone else? #1 Organisations and health systems are not aligned for sustainable transformation
  4. 4. What is the scale of change required in the healthcare sector in your country? Sources: KPMG What Works Healthcare Insights global crowd sourcing community 35% 36% 16% 6% 6% 0% 20% 40% 60% 80% Fundamental Moderate Incremental Very little No change is required 73% 19% 7% 1% 1% 0% 20% 40% 60% 80% Our crowd sourcing community revealed a major disconnect between their organisation and health system Twice as many thought the wider system required fundamental change What is the scale of change required in your organisation? #1 Organisations and health systems are not aligned for sustainable transformation
  5. 5. While most strategic effort is focused on transactional – not transformative – changes, integration is much more prominent. Source: KPMG pre-conference surveys: Rome 2012 and London 2014 85% 81% 74% 44% 56% 52% 44% 30% 22% 30% 81% 78% 85% 85% 74% 50% 52% 41% 56% 63% 33% 19% 93% 85% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Majorcost reduction Leanorother improvement methods Developingnew workforcemodels Incomegrowthfrom existingpayers Mergers Acquisitionsof otherhospitals Acquisitionsof otherprovidertypes Verticalintegration Entryintonew markets inthecountry Expansioninto overseasmarkets Focus& specialization Investmentin healthIT %ofresponses: 'Likely'or'VeryLikely' #1 Organisations and health systems are not aligned for sustainable transformation Which strategies are providers likely to adopt to respond to these changes?
  6. 6. "My health system is planning to redesign care within the next 5 years to create more integrated delivery" Sources: KPMG Global Healthcare Conference 2014, pre-conference survey 0% 7% 11% 52% 30% 0% 10% 20% 30% 40% 50% 60% Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree #2 People believe that integration is critical for improved health system sustainability 82% of global respondents believed their health system will become more integrated over the next 5 years
  7. 7. "Fragmented patient pathways – within my organisation and across my health system – compromise clinical effectiveness and operational efficiency" 80% of global respondents agreed that fragmented care hampered clinical effectiveness and operational efficiency Sources: KPMG Global Healthcare Conference 2014, pre-conference survey 0% 0% 19% 58% 22% 0% 10% 20% 30% 40% 50% 60% 70% Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree #2 People believe that integration is critical for improved health system sustainability
  8. 8. "Bringing primary and secondary care together into the same organisation does not create sufficient additional value to justify the difficulty of doing so" Sources: KPMG Global Healthcare Conference 2014, pre-conference survey 15% 56% 19% 11% 0% 0% 10% 20% 30% 40% 50% 60% Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree #2 People believe that integration is critical for improved health system sustainability 71% of global respondents believed that greater primary and secondary care integration was beneficial
  9. 9. "With the right support and empowerment patients actively managing their own care creates better value care" #3 Patients, when empowered, will create more value 72% of global leaders believe empowered patients create better value care Sources: KPMG Global Healthcare Conference 2014, pre-conference survey 0% 11% 17% 28% 44% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree
  10. 10. Source: KPMG Global Healthcare Conference 2014, pre-conference survey How satisfied are you that your organisation is truly meeting the aspirations of your patients? 8% 4% 0% 58% 31% 0% 10% 20% 30% 40% 50% 60% 70% Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree 7% 70% 19% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% Very satisfied Somewhat satisfied Somewhat dissatisfied Very dissatisfied #3 Patients, when empowered, will create more value However, 89% of leaders believe their health systems are designed around organisations’ – not patients’ – priorities and they are not very satisfied they are meeting patients’ needs “The delivery of healthcare is currently structured more according to organisational structures and boundaries than the needs of the patient"
  11. 11. Sources: KPMG Global Healthcare Conference 2014, pre-conference survey KPMG What Works Healthcare Insights global crowd sourcing community “In my organisation patients actively participate in managing their own care” 79% of our crowd sourcing community believed patient experience indicators are being more widely used; only 14% of global leaders thought their patients were becoming ‘active’ 79% 17% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Yes No Don't know 3% 29% 46% 14% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Strongly disagree Disagree Neither agreenor disagree Agree Strongly agree Is patient experience a key performance indicator for your organisation? #3 Patients, when empowered, will create more value
  12. 12. Source: KPMG-commissioned global survey of patient representative and advocacy groups Hong Kong Alliance of Patients’ Organizations ABCD: Associacao Brasileira de Colite Ulcerativa e Doenca de Crohn Unique global insights from patient support and advocacy groups, representing millions of patients across 6 countries Crohn’s & Colitis Foundation of America Families USA American Cancer Society Childbirth connection Canadian Cancer Survivor Network Canadian Diabetes Association healthexperiences.ca Canadian Breast Cancer Network / Reseau Canadien du Cancer du Sein ABRA SUS Nederlandse Diabetes Vereniging Crohn en Colitis Ulcerosa Vereniging Nederland European Patients Forum National Voices National Childbirth Trust Macmillan Cancer Support Hong Kong Breast Cancer FoundationDiabetes Hong Kong Dutch Patients & Consumers Organisation #4 There is some distance between what patients want and what they get Federação Brasileira de Instituições Filantrópicas de Apoio à Saúde da Mama
  13. 13. Source: KPMG-commissioned global survey of patient representative and advocacy groups Our global research suggests 5 dominant themes: “See me – and support me – as a person, not a condition or an intervention site” 1 Patients want to be informed partners in care2 Fragmented care is harmful and wasteful care. Patients can feel “abandoned” (especially after discharge)3 Patients want to be empowered partners in care4 In some countries securing responsive access to care is a fundamental priority 5 #4 There is some distance between what patients want and what they get
  14. 14. "Measurements of patient experience impact on how my organisation delivers care" Are patient experience measures used in the performance appraisal of clinical staff and managers within your organisation? Clinical staff Managers Sources: KPMG What Works Healthcare Insights global crowd sourcing community 46% 37% 17% 46% 42% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Yes No Don't know 62% 26% 6% 5% 0% 10% 20% 30% 40% 50% 60% 70% Strongly agree / Agree Somewhat agree Somewhat disagree Strongly disagree / Disagree #4 There is some distance between what patients want and what they get While our crowd sourcing community overwhelmingly believed that patient experience is now a key performance indicator, more needs to be done on activation and empowerment
  15. 15. Source: Hibbard J H, Greene J, Overton V (2013) ‘Patients with lower activation associated with higher costs; delivery systems should know their patients’ “scores”.’ Health Affairs, 32, no (2013): 216-22. (Quoted in KPMG, ‘Creating new value with patients, carers and communities’) Many studies show that activated’ patients have better health outcomes at lower costs. Patients with lower activation scores cost 8% to 21% more. 2010 patient activation level Predicted per capita billed costs ($) Ratio of predicted costs relative to level 4 Patient Activation Measure (PAM) Level 1 (lowest) 966 1.21 Level 2 840 1.05 Level 3 783 0.97 Level 4 (highest) 799 1.00 #5 What Works. There is an evidence base for patients creating value
  16. 16. We have developed a 9-point maturity matrix to help assess progress: 3. Systems to support shared decision making 4. Models support self- care and help professionals adapt 6. Can patients get and use information? 5. Are patients’ assets mobilized? 8. Are the assets that communities can contribute mobilized? 7. Are patients involved in teaching and research? 1. Work to create a new culture centreed on the patient culture 2. Patient input into service design Are there measurement systems to support this? Patient experience and outcome data embedded in all performance management & governance Patient experience and outcome data embedded in performance management of medical staff Real time collection data used at front line for improvement Systematic collection of data reported to boards Recognition that the collection of data on patient experience and outcomes will provide a basis for understanding progress and analysis No data on patient experience or outcome data collected 1 2 3 4 5 9. Are there measurement systems to support this? 0 maturitylevel Source: KPMG, ‘Creating new value with patients, carers and communities’ 2014 12345 #5 There is an evidence base for patients creating value
  17. 17. Source: All-Party Parliamentary Group on Global Health, ‘Patient empowerment: for better quality, more sustainable health services globally’ 2014 #5 There is an evidence base for patients creating value
  18. 18. #6 The activist payer is emerging and pursuing value (but has some way to go) “I expect to see...” Sources: KPMG Global Healthcare Conference 2014, pre-conference survey 93% 85% 7% 15% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Payment systems more bundled and focussed on value Price reductions and capping of volumes Agree Disagree Global leaders expect payment systems to become more bundled and focused on value (with downward pressure on prices)
  19. 19. “The pursuit of short-term cost reductions compromises clinical and operational effectiveness:” “My negotiations with my main payer / provider are focussed (mainly) on ...” But a majority agree that a short-term focus on costs is too transactional and not consistent with value and sustainable care Source: KPMG Global Healthcare Conference 2014, pre-conference survey 3% 28% 17% 42% 11% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Strongly disagree Disagree Neither agreenor disagree Agree Strongly agree 41% 38% 9% 13% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Immediate concerns for financial sustainability Short-to-medium-term improvements to patient care Long-term considerations of higher-value Sustainable patient care #6 The activist payer is emerging and pursuing value (but has some way to go)
  20. 20. Conclusions Organisations and health systems are not aligned for sustainable transformation 1 People believe that integration is critical for improved health system sustainability 2 There is some distance between what patients want and what they get4 The activist payer is emerging and pursuing value (but has some way to go)6 There is an evidence base for patients creating value5 Patients, when empowered, will create more value3 Workforce is a worry. Optimism around leadership and technology.7
  21. 21. Launched at Davos... Necessity, the mother of innovation:: Low-cost, high-quality healthcare
  22. 22. kpmg.com/socialmedia © 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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