Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Robert Kaplan, Value Based Health Care

209 views

Published on

March 02, 2018
Value-based health care is one of the most pressing topics in health care finance and policy today. Value-based payment structures are widely touted as critical to controlling runaway health care costs, but are often difficult for health care entities to incorporate into their existing infrastructures. Because value-based health care initiatives have bipartisan support, it is likely that these programs will continue to play a major role in both the public and private health insurance systems. As such, there is a pressing need to evaluate the implementation of these initiatives thus far and to discuss the direction that American health care financing will take in the coming years.

To explore this important issue, the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School collaborated with Ropes & Gray LLP to host a one-day conference on value-based health care. This event brought together scholars, health law practitioners, and health care entities to evaluate the impact of value-based health care on the American health care system.

For more information, visit our website at: http://petrieflom.law.harvard.edu/events/details/will-value-based-care-save-the-health-care-system

Published in: Healthcare
  • Be the first to comment

  • Be the first to like this

Robert Kaplan, Value Based Health Care

  1. 1. Value-Based Health Care Harvard Law School March 2018 Bob Kaplan, Senior Fellow and Marvin Bower Professor of Leadership Development, Emeritus
  2. 2. 2Copyright © Harvard Business School, 2017 The central goal in health care must be value for patients, not access, volume, convenience, quality, or cost containment Value = Health outcomes Costs of delivering the outcomes The unit of analysis for creating and measuring value is the treatment of a patient’s medical condition over a complete cycle of care. Health Care Value-Based Delivery Use Competition to Drive the Greatest Value to Patients MD encounter Assess appropriateness Assess risk Schedule OR Procedure Recovery Possible need for procedure Shared decision making Pre-procedure testing Patient problem Measure Outcomes and Cost
  3. 3. 3Copyright © Harvard Business School, 2017 Creating a Value-Based Health Care System 1. Organize Multi-disciplinary teams around the patient’s medical condition • For primary and preventive care, the multi-disciplinary team serves a distinct patient segment 2. Measure and communicate Outcomes by medical condition 3. Measure and improve Costs by medical condition 4. Develop Bundled Payments to compensate providers for treating the medical condition
  4. 4. 4Copyright © Harvard Business School, 2017 Creating a Value-Based Health Care System 1. Organize Multi-disciplinary teams around the patient’s medical condition 2. Measure and communicate Outcomes by medical condition 3. Measure and improve Costs by medical condition 4. Develop Bundled Payments to compensate providers for treating the medical condition
  5. 5. 5Copyright © Harvard Business School, 2017 Measure Outcomes for a Patient’s Medical Condition Patient Experience/ Engagement PSA, HgA1b levels, Gleason score, surgical margin, Infection rates, Readmission rates, length-of- stay Protocols, Quality, Safety, Compliance Guidelines & Checklists Patient Initial Conditions Processes Output Indicators (Health) Outcomes InputsStaff certification, facility standards JCAHO accreditation
  6. 6. 6Copyright © Harvard Business School, 2017 Measure Outcomes that Matter to Patients M. Porter, NEJM Dec 2010 Survival Degree of health/recovery Time to recovery and return to normal activities Sustainability of health /recovery and nature of recurrences Disutility of the care or treatment process (e.g., diagnostic errors and ineffective care, treatment-related discomfort, complications, or adverse effects, treatment errors and their consequences in terms of additional treatment) Long-term consequences of therapy (e.g., care- induced illnesses) Tier 1 Tier 2 Tier 3 Health Status Achieved or Retained Patient’s Experience during Care Cycle Sustainability of Health Mortality Clinical status achieved Functional status achieved Time to care completion and recovery Care-related pain/discomfort Complications Reintervention/Readmission Long-term clinical status Long-term functional status Long-term consequences of therapy
  7. 7. 7Copyright © Harvard Business School, 2017 ICHOM (International Consortium for Health Outcomes Measurement) has developed Standard Sets, covering 55% of the disease burden ▪ Dementia ▪ Older persons ▪ Heart Failure ▪ Pregnancy and childbirth ▪ Breast cancer ▪ Colorectal cancer ▪ Overactive bladder ▪ Craniofacial microsomia ▪ Inflammatory bowel disease ▪ Chronic kidney disease ▪ Hypertension
  8. 8. 8Copyright © Harvard Business School, 2017 A case study in multi-disciplinary care and outcomes measurement: The Martini Klinik Prostate Cancer Surgery Center in Hamburg Professor Dr. Hartwig Huland Founder and Chief of Martini Klinik
  9. 9. 9Copyright © Harvard Business School, 2017 Clinical and Staff Resources Contained within Martini Klinik Personnel • Faculty: Urological Surgeons (9) • Peri-operative staff: nurses (39) [dedicated to prostate cancer] • Physiotherapists • Psychologists * • Oncologists * • Anesthesiologists * • Social Workers • Biostatisticians for clinical trials and outcomes measurement Facilities • Operating rooms (4) [dedicated] • Inpatient ward • Physiotherapy unit • Outpatient clinic • Central Administration and Scheduling * Employed by Hospital Department but dedicated to Martini Klinik
  10. 10. 10Copyright © Harvard Business School, 2017 Outcome Measures Collected at Martini Klinik Clinical Outcomes Patient Outcomes Length of Stay Mortality Post-surgery PSA level (annually) Patient-reported erectile function (Int’l Index of Erectile Function) Tumor volume Patient-reported urinary function (Int’l Prostate Symptom Score) High-grade cancer volume Patient-reported general quality of life (European Cancer QLQ-C30 Survey) Number of positive lymph nodes Incontinence (ICS Score) Positive surgical margin Surgical complications up to three months post-op (Clavien/Dindo) Radiotherapy complications Metastasis
  11. 11. 11Copyright © Harvard Business School, 2017 Outcomes Measurement at Martini Klinik Prostate Cancer Surgery Center in Hamburg • Outcomes data measured pre-surgery, at discharge from MK, and, post-discharge, 3 months, 1 year, 2 years, and 3 years. • 1,200 surveys per month; 90% return rate (multiple phone reminders) • Data base on 20,000 prostate cancer patients • Now collecting molecular genetic data for every tumor tissue sample
  12. 12. 12Copyright © Harvard Business School, 2017 MK clinicians participate in a semi-annual meeting to compare clinical and patient outcomes by surgeon o Dr. Huland, at one meeting, learns that his incidence of positive surgical margins had increased from 5% to 8%. o He enters training with junior surgeons who had better performance. o Dr. Huland’s subsequent incidence of positive margins dropped to 3.5%.
  13. 13. 13Copyright © Harvard Business School, 2017 9.2% 17.4% 95% 43.3% 75.5% 94% Incontinence after one year Severe erectile dysfunction after one year 5 year disease specific survival Average hospital Best hospital Prostate Cancer Outcomes in Germany
  14. 14. 14Copyright © Harvard Business School, 2017 Martini Klinik Outcomes versus the average German hospital 9.2 17.4 95 43.3 75.5 94 Incontinence Severe erectile dysfunction 5 years disease specific survival Percentage of patients treated Average hospital Best hospital
  15. 15. 15Copyright © Harvard Business School, 2017 Creating a Value-Based Health Care System 1. Organize Multi-disciplinary teams around the patient’s medical condition 2. Measure and communicate Outcomes by medical condition 3. Measure and improve Costs by medical condition 4. Develop Bundled Payments to compensate providers for treating the medical condition
  16. 16. 16Copyright © Harvard Business School, 2017 Measuring Costs Correctly Develop process maps for the care cycle Level 1: Overall care cycle Map 1: Surgical consultation Map 2 : Pre-operative testing Map 3: Day of surgery pre-operative prep Map 4: Operation Map 5: Post- anesthesia care unit Map 6: Discharge Map 7: Rehabilitation Map 8: Follow-up visit Level 2: Studied care cycle Map 2 Level 3: Process maps for studied care cycle
  17. 17. 17Copyright © Harvard Business School, 2017 We compute total patient-level care costs by multiplying capacity cost rates by process times and summing across each patient’s cycle of care Initial consultation Minutes Cost/ minute *Total MD X1 Y1 136.13 RN X2 Y2 68.04 CA X3 Y3 6.17 ASR X4 Y4 15.74 $266.08 Surgical procedure MD X1 Y1 584.99 Anes. X2 Y2 603.89 RN X3 Y3 136.29 Tech X4 Y4 97.82 OR X5 Y5 329.16 $1752.15 Follow-up or post-operative visit MD X1 Y1 55.19 RN X2 Y2 13.61 CA X3 Y3 3.09 ASR X4 Y4 1.77 $73.66 Source: Meg Abbott, MD & John Meara, MD Boston Children’s Hospital
  18. 18. 18Copyright © Harvard Business School, 2017 Time-Driven ABC provides a common platform – a single version of truth – for productive discussions among clinical & administrative personnel. By standardizing on this procedure and we can achieve consistently excellent outcomes at lower cost. We can skip this process and save $120 per patient. 18
  19. 19. 19Copyright © Harvard Business School, 2017 Creating a Value-Based Health Care System 1. Organize Multi-disciplinary teams around the patient’s medical condition 2. Measure and communicate Outcomes by medical condition 3. Measure and improve Costs by medical condition 4. Develop Bundled Payments to compensate providers for treating the medical condition
  20. 20. 20Copyright © Harvard Business School, 2017 The Movement to Value-Based Payment Models Capitation/Population Based Payments Bundled Payments Pay for care for a life Pay for care for conditions (acute, chronic) and primary care segments • Both capitation (ACOs) and bundled payments create positive incentives to reduce costs and give clinicians flexibility in the provision of care • Capitation at the hospital or system level can coexist with bundle payment at the condition level Fee for Service Global Budgets
  21. 21. 21Copyright © Harvard Business School, 2017 Bundled Payment • A single risk adjusted payment for the care of a condition (or patient segment for primary care) • Covers the full set of services and products needed to treat the condition over the full care cycle • Contingent on condition-specific outcomes • At risk for bundled payment versus the cost of all included products and services for the condition − limits of responsibility for unrelated care and outliers • Accountable for outcomes and cost condition by condition Value-Based Payment Models Capitation (Population-Based) • A single risk-adjusted payment for the overall care for a life • Responsible for all needed care in the covered population • Accountable for population level quality metrics • At risk for the difference between overall spending and the sum of payments • Accountable for population total cost and population quality outcomes
  22. 22. 22Copyright © Harvard Business School, 2017 Outcome-Based Bundled Payment 0 10,000 20,000 30,000 40,000 50,000 60,000 Base Payment Warranty Payment Performance Payment Total Payment SEK Standard Payment Risk Adjustment 54,537 ($8,139*) * Based on Jan 1, 2012 exchange rate of 6.8 SEK to 1 USD 42,044 4,357 Average 10% of Base 8,136 Base Payment Covered: Preoperative consultation, surgery, inpatient stay, implants, medications, laboratories, radiology, physical therapy, and follow-up care. Risk adjustment: Age, gender, patient- reported pre-operative pain measured by Visual Analog Scale (VAS) Performance Payment Amount: Target average of 10 percent of base reimbursement Criteria: Based on the actual improvement in pain at 1 year after surgery (Global Assessment Scale) versus expected pain outcome based on registry data for similar patients Warranty Payment Risk adjustments: Age, gender, preoperative VAS, pain duration, smoking, comorbidities, operative treatment, employment status Covered: •Surgery wrong level •Disk herniation •Re-stenosis •Mechanical complication •Pseudoarthrosis •Cerebrospinal fluid leak •Ongoing Bleeding •Infection •Pain in neck/arm/back •Wound dehiscence •Implant related pain Swedish Spine Bundle Standard Payment Risk Adjustment
  23. 23. 23Copyright © Harvard Business School, 2017 Bundled Payments are more Aligned with Value • Accountability condition by condition • Drives multidisciplinary care (IPUs) and directly rewards good outcomes • Strong incentives to improve efficiency • Providers focus on areas of excellence • Enables transparency condition by condition • Expands and informs patient choice • Competition on value by condition
  24. 24. 24Copyright © Harvard Business School, 2017 Device and Pharma Suppliers • Drug, device, test, or IT/AI is embedded within cycle of care for bundled procedures • Suppliers must compete on value for patients; demonstrate how their product or service improves patient outcomes at lower total costs • Be accountable for patient outcomes; share the risk with providers and payers • This may require some regulatory changes to facilitate full collaboration between supplier and providers Bundled Payments: Implications for Suppliers
  25. 25. 25Copyright © Harvard Business School, 2017 Regulation Issues in a Value-Based World • Current regulations (e.g., Anti-Kickback Statute, Stark Law) may inhibit productive collaboration and risk-sharing between Suppliers and Providers • Pharmaceutical pricing in a VBHC world with bundled payment contracts? • JCAHO accreditation could inhibit creation of innovative Integrated Practice Units that offer high-outcome care for a specific medical condition. • Today: standards focus on the credentials and qualification of people and facilities; i.e., inputs • Tomorrow, in a VBHC World: emphasize accountability for the outcomes produced by the institution or (better) the Integrated Practice Unit

×