Value Based Healthcare

1. Value Based Health Care

2. Quality care pays out

3. How does benchmarking create more value in healthcare?
Outcome
Costs
Value =
Michael Porter PhD, Professor, Harvard Business School, “What is Value in Health Care“
New England Journal of Medicine, December 23, 2010
“The Strategy that will fix healthcare”, September 2013

4. About the costs
Porter et al (2013): Calculate the full patient cycle costs
Measure activities per patient
Measure resources per activity
Requires a well defined uniform costing methodology

5. Status of costing in Ireland
Costing requires local hospital knowledge, feedback and actions
National costing project important
Access to data needs to be improved
Galway/WNWHG first public group to deploy costing properly, with
departments’ input
Bon Secours System first private group to deploy costing on a group-wide
basis

6. Cost benchmarking possibilities
Purchase prices
European market for high costs elements, devices.
Are prices too high?
Resource utilisation
We all have doctors, nurses, administrative staff.
How much should they produce?
Activities per patient
Same patient diagnoses
How many activities are expected? (LOS, theatre, laboratories)
Treatment mix
Treatment possibilities are global.
Which options do we choose? (PCI, CABG)

7. Outcome
Costs
Value =
Now about the outcome

8. The outcome
Indicators set per disease/treatment in collaboration with doctors, for example:
Complications (Intensive Care/infections/re-operations)
Mortality
Volume
New indicator sets define quality of life
Hospital mortality is getting very low
High differences in functional results
For example after prostate surgery
Indicators supported by professionals

9. About DICA/DSCA
DSCA means Dutch Surgical Colorectal Audit. The DSCA records the results of cancer surgeries.
This gives the professional insight into the quality of their own care and that of colleagues.
This so-called benchmark information can demonstrably improve their work.
The DSCA was created by: The Dutch Society of Surgical Oncology, the Dutch Society for Gastrointestinal Surgery
and the Dutch Colorectal Cancer Group.
DSCA is part of the Dutch Institute for Clinical Auditing (DICA).
Performation and DICA team up in measuring value of healthcare
A PhD study is focusing on relation of costs and clinical quality

10. Benchmark - quality
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
100 150 200 250 300 350 400 450 500 550 600
Percentagepaëntenmetgecompliceerdbeloop
95% BI
Gemiddelde
Ongecorrigeerd
Gecorrigeerd
95% BI
Funnel plot complicated clinical pathway vs. volume (2010-2012)

11. Making choices
Jointly with you we create high value healthcare for Europe
Outcome
Costs
Value =

12. Value chart, colorectal surgery
Less complications (case mix corrected)
Lowercosts/case
86
113
187
178
132
164
141
78
177
96
51
75
74
92
85
82
112
81
153
61
€ 6.000
€ 8.000
€ 10.000
€ 12.000
€ 14.000
€ 16.000
€ 18.000
0 0,5 1 1,5 2 2,5
Volume of interventions
: <85 per year
: 85-140 per year
: >140 per year
€ 18,000
€ 16,000
€ 14,000
€ 12,000
€ 10,000
€ 8,000
€ 6,000
20% 30% 40% 50%10%0%
This team saves 7 complications/year
and saves € 3,300 per patient = € 270k/year
(compared to average hospital)

13. Focus: making choices
Lesscosts/casethanpeers
Less complications than peers
Observed/expected outcome compared to costs
Orthopaedics
HeartOncology
Obstetrics
FOCUS
Good & efficient
STOP
Expensive and
sub-standard
IMPROVE
Cheap & sub-standard
‘LEAN’
Expensive
but good

14. Results DICA 2010-2012
2010
2011
2012
-23%
2010
2011
2012
-18%
Mortality Complications
2010 2011 2012
Patients 2553 2555 2939
Died 102 95 91
Mortality 4,0% 3,7% 3,1%
2010 2011 2012
Patients 2553 2555 2939
X-Patients 625 563 593
X-Rate 24,5% 22,0% 20,2%
2010
2011
2012
-10%
2010 2011 2012
Patients 2553 2555 2939
Costs/case € 11.487 € 10.647 € 10.368
Costs
€ 0
€ 2.000
€ 4.000
€ 6.000
€ 8.000
€ 10.000
€ 12.000
Kosten Hoofdopname + Q1
MEASURE
FEEDBACK
COMPARE
IMPROVE

15. How to make it happen?

16. Hospital
Patient and
activity data
Costing data
Hospital
Patient and
activity data
Costing data
Hospital
Patient and
activity data
Costing data
The key: reliable data
Patient and
activity data
(Hipe/PAS)
Costing data
Central ‘cloud’ data warehouse
Benchmark
database Reporting….
> 200 hospitals in NL/UK/IE
Clinical data

17. Easy to understand and easy to utilise reporting

18. The Dutch perspective

19. Experiences in the Netherlands
UHI introduced 1998
MFTP introduced 2007-2012
Freedom of choice in insurer, hospital
Safety nets along the route
Hospitals were already foundation trusts
Autonomous seeking for best information systems
Management information has improved dramatically
Waiting lists have reduced, quality has improved
Acute hospital costs are now going down
Efficiency
Quality
Better purchasing

20. Outside – in observations
MFTP/UHI is the way to go
In Ireland, administrative data is widely available, however data is not structured
Most key players are still in the dark on essential information!
Major backlog on ICT investments (expenditures are only 0.3%!)
Need for wall-to-wall HIS
Need for Business Intelligence, DWH, dashboards
High investment per hospital, or innovative, cloud solutions….
Cultural / regulations aspect make it very hard to innovate at local level
Hospital managers need to empowered to take a risk
Clinical data needs to be collected, monitored and actioned  DICA?
Connect the doctors stronger to the hospitals

21. Summary

22. Summary
Value = Outcome / Costs (Porter)
Benchmarking is an essential driving force
Benchmarking on efficiency requires costing models
Benchmarking on outcome requires clinician involvement
Value charts allow strategic choices
With benchmarking, value increases
WNWHG and Bon Secours System are frontrunners in financial transparency
Data is a challenge in Ireland
Cloud Data Warehouse is a viable route, comparing UK/NL/IE

23. Sweelincklaan 1 Baggot Street Upper 9-11
3712 JA Bilthoven Dublin 4
The Netherlands Ireland
+31 30 233 3872 +353 1 662 8280
www.performation.com
Steven.Lugard@performation.com