Category : OBH

Value-based healthcare: a junior doctor’s perspective

The OBH bookshelf is home to a range of titles, and over half of them are inexplicably copies of ‘Redefining Health Care’ by Michael Porter and Elizabeth Teisberg. I was delighted to have the opportunity to learn from the authors themselves earlier this year.

A rite of passage here at OBH, the Value-Based Healthcare (VBHC) Intensive Seminar is an annual week-long course at Harvard Business School. I couldn’t wait for a sunny holiday to relax and sit back while learning more about the world of VBHC.

Unfortunately my dreams of a warm, laid-back trip were shattered when I arrived in Boston mid-blizzard with a foot of snow beneath me. I realised that the mammoth pile of pre-course reading I had put off could be delayed no more.

The concept of VBHC is, on paper, incredibly simple. Value in healthcare can be defined as the  patient outcomes achieved, divided by the cost to deliver care. Michael Porter and Thomas Lee outlined this nicely in their article ‘The Strategy That Will Fix Health Care’: “at its core is maximizing value for patients: that is, achieving the best outcomes at the lowest cost.”

You can’t improve what you don’t measure

While this may sound straightforward, very few health systems have had a rigorous approach to both measuring patient-centred outcomes and measuring the cost of care. “You can’t improve what you don’t measure” is – I’m told, taught in Management 101.

The course was taught in an incredibly interactive and engaging way, the same style used for MBA students – where the lecturer asks an open-ended question and a discussion opens up amongst the room. Working through two or three case studies each day, we explored how health systems around the world had innovated in this space.

Going into the course I had a few questions to address:

Firstly, how can we implement a philosophy that has been developed around an American health system in the NHS?

Secondly, if this really is the ‘Strategy to fix health care’ why isn’t everyone doing it already?

Finally, VBHC sounds great on paper – but how do we actually implement it?

Outcomes

A close-to-home case study was that of stroke care in North Central London. We discovered how using a rigorous approach to maximising value, outcomes in stroke care improved remarkably. In 2006 there was a more than two-fold variability in ‘acute stroke mortality’ (the chance a person with a new stroke dies within 30 days) between the best and worst performing hospitals in London. This was in part due to patients being treated by teams and on wards that were not specialist stroke units. Again – there was a huge amount of variability. In some centres almost everyone was managed in a specialist stroke unit and in others, only 15% were.

By moving from 34 highly variable centres across London that managed acute strokes to just 8 high-volume specialist units – London went from having the worst stroke outcomes in the UK to the best.

Across all the case studies, a common theme was the importance of rigorously measuring outcomes. Not just measuring any outcomes, but firstly – using true outcomes rather than processes and secondly, outcomes that actually matter to people.

“Let’s get ready to bundle!”

We learnt from the infectiously enthusiastic Bob Kaplan about how neither of the most commonly used payment models – fee-for service and global capitation directly improved the value of patient care.

Fee-for service models – where a provider is paid for each service they deliver, incentivises providers to increase the volume of work they do. This means more investigations, more operations, more drugs  - not necessarily improving value. In other words: a focus on quantity rather than quality.

“Let’s get ready to bundle!” Kaplan proclaims as he argues that a bundled payment for the full cycle of care is the solution.

What is a bundled payment? A single payment to cover all the care for a person’s condition(s). The payment is risk-adjusted based on patient mix and is contingent on delivering good outcomes.

This model incentivises providers to focus on improving patient-centred outcomes. Providers would be paid to look after the full care pathway. For example in osteoarthritis: the painkillers, investigations, physiotherapy, surgery (and complications), post-op care and rehab.

Cost

Something that struck me when learning about cost accounting in healthcare – is that despite being a clinician making decisions daily, I have no idea how much things cost.

Being taught about TDABC (Time-Driven Activity Based Costing) made me aware of the importance of knowing the answer to this question when making decisions in healthcare. It’s impossible to know the value of a service if we don’t know the cost.

A great example is Boston Children’s Hospital. The plastic surgery department looked after a range of conditions from simple problems that could be dealt with in primary care, to highly specialised surgery. Each condition was charged with the same fee for an initial clinic appointment despite the fact that more complex conditions required much more time and specialised input. Using existing accounting methods, each service was equally profitable – so increasing the volume of work done in any condition would be profitable. However using TDABC – they found that some services were indeed profitable, but they were losing money on complex appointments. This highlighted how existing methods of measuring cost did not capture the nuances of care pathways – and might cause departments to make the wrong choices in deciding where to cut/expand services.

So back to my initial questions:

Is VBHC applicable to the NHS?
Yes – we covered case studies across a range of health systems including the UK’s, and while the intricacies might differ between countries, the principles are universal.

Why isn’t everyone doing it already?
It sounds simple – pick outcomes that matter, measure them and use financial incentives to improve them. But in the words of a certain political leader: “Nobody knew healthcare could be so complicated”. Many centres are doing some things well and VBHC is gaining traction.

How do we put it into practice?
The toughest bit. Every case we explored had one thing in common: a leader who had the determination, patience and vision to make real change. These were often, but not always, senior clinicians. Enacting change is difficult, and can seem impossible in the bureaucratic NHS-machine. Outstanding leadership will help drive success. We also need to get clinicians and managers on board, and most importantly – patients need to be shown why VBHC is a better way of delivering care.

What’s next?

Amongst a myriad of talk of cost, profits, volume and competition I felt something was missing. The principles taught on the course were based around maximising value for an individual rather than a population, perhaps a reflection of the US health system. In the States, if a patient arrives at a hospital – their insurance company and the hospital are responsible for that individual. They have no responsibility to improve value for someone in a different state with a different insurance company.

In the UK’s single-payer system, the state is responsible for everyone’s care. We need to also think about value at a national, population-based level. The care of a person with diabetes in London affects the care of someone with cancer in Manchester, as the resources come from the same pool. We need to consider the needs of society in addition to those of the individual. Oxford’s Sir Muir Gray promotes this view.

Nevertheless the ideas are still very relevant here and there are reasons to be optimistic. Firstly, there is now a real appetite in the UK for a focus on value. Brits were well-represented at the course, the largest cohort after Americans. Secondly, many of the 44 Sustainability and Transformation Plans outline plans for outcomes-based commissioning and a focus on improving value. Finally, it is often in the toughest of times that innovation happens. The NHS in its current form is unsustainable, VBHC will be part of the solution.

Links:

The Strategy That Will Fix Health Care
How to Pay for Healthcare

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OBH Outcomes Platform selected for NHS Innovation Accelerator programme announced by NHS England Medical Director Sir Bruce Keogh and Professor Robert Wachter

NHS England Medical Director Professor Sir Bruce Keogh along with US Digital Health expert Professor Robert Wachter will today (9 November 2016) reveal eight health innovations set to join the NHS Innovation Accelerator at an event taking place in London to launch year two of the programme.

Last year, the programme selected 17 innovations and supported their roll out across over 380 NHS organisations, benefiting millions of NHS patients.

Each of the innovations are evidence-based and cost-saving and focus on providing solutions to key challenges facing the NHS, including better prevention of ill health, improved management of long term conditions and early intervention into diseases…

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Does Facebook Know When I’m Not Well (and can it do anything about it) ?

Just imagine getting a Facebook notification suggesting you should take paracetamol, maybe take an afternoon off and cook some chicken broth; indeed, a couple of hours ago you noticed your nose was running, and you felt a bit shivery. But how could Facebook know?

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#OBHIS2 – Two Things We’ve Learned … About Health Data

1 – Data is getting (even more!) interesting

At OBH, we’re starting to explore the potential of big data in improving health care delivery…

2 – Even we don’t know what health data is anymore (but don’t tell anyone!)

For years, healthcare data has been viewed simply as the data which is generated by the health care industry. However, it’s becoming increasingly apparent that seemingly irrelevant data, like social media posts, location and GPS tracking, your shopping habits, income and voting habits, may actually be equally powerful, and could actually provide greater insights to your health…

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#OBHIS2 – Two Things We’ve Learned …About Digital Health

1 – A change is gonna come…but it might take some time

Perhaps ironically, in one of the fastest moving, most rapidly evolving sectors there is, we’ve learned that working in digital health requires patience…

2 – Answer a problem that really exists

Since we started OBH two years ago, we’ve been fortunate to work with and alongside several other startups and partner organisations. Through this experience, we’ve noticed that the most passionate, exciting (and successful) companies are the ones who have a problem they are trying to fix. Too often we’ve come across organisations who are building a business and searching for a problem to solve…

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#OBHIS2 – Two Things We’ve Learned … About Implementing Outcomes Based Healthcare

1 – There’s a risk that we don’t get ‘outcomes’ right

The biggest risk we see in our work to help healthcare organisations to define, measure and pay for the outcomes of care is a lack of precision in what actually constitutes an outcome. The way we see it, there is an element of the Emperor’s new clothes here: just calling activity and process measures ‘outcomes’ doesn’t actually make them outcomes! Similarly, if we call everything we currently do ‘value’ then we are not being honest with ourselves, and it makes it even harder for us to create true value…

2 – …But there is also a risk if we don’t change

So, getting outcomes ‘right’ does require a different way of working, it does require a fundamentally fresh way of thinking and perhaps even an element of risk. But we find that, too often, we can forget the risk of the status quo…

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#OBHIS2 – Two Things We’ve Learned …About Being A Startup

1 – Build a team who you like, but who are not like you

Quite simply, you need people who are going to tell you a rubbish idea is rubbish. Teams of people who look at things the same way may be very harmonious but often aren’t as effective as teams which are comfortable with challenging each other…

2 – …It’s not just what you do, it’s where you do it

Over a year ago, we made a deliberate decision as a team to physically take ourselves from within the healthcare establishment to firmly outside it, and moved from our previous offices (okay, office… okay…cupboard) within an established healthcare think tank, to Techspace, firmly within the flat-white sipping Silicon roundabout catchment area, and surrounded by collaborators in the tech, healthtech and digital space…

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PRESS RELEASE: Outcomes Based Healthcare and Big Data Partnership Secure Grant for a £1m Project To Use Big Data to Predict Complications of Diabetes

Outcomes Based Healthcare, one of the UK’s leading health outcomes advisory and technology companies and Big Data Partnership, big data service provider across all industries, today announced that they have secured a match-funded grant for a £1m project from Innovate UK, the UK’s innovation agency (formerly the Technology Strategy Board) for a ‘Digital Health in a Connected Hospital’ funding call.

Outcomes Based Healthcare and Big Data Partnership are working together to lead the drive toward a more personalised, data-driven approach to improving health outcomes in people with diabetes.

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The Pursuit of Transparency

As we approach the next International Consortium for Health Outcomes Measurement (ICHOM) conference in November (http://www.ichom.org/news/conferences/), we thought it was time to recollect one of the most touching outcomes talks from last year, “From Bedside to Boardroom: the Pursuit of Transparency” by Beth Daley Ullem. In the talk, through telling her personal story, Beth describes the true importance of outcomes.

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Parity of esteem and its role in achieving good outcomes

Talking as a guest on BBC Radio4’s today programme this morning (15th August 2014) was Dr Martin McShane, NHS England Director of the care for Long Term Conditions. Recently there has been lots of discussion on the importance of reducing the stigma associated with mental illness. It can be claimed that stigma is not only present in everyday life, but also in the healthcare system itself.

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