value-based care

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Accountable care demands that the system sync with the preferences and choices of the consumer purchasing the services.  In order to get to real health value, consumer-patients must make the health care decisions that improve personal health and do not derail personal bank accounts.  It was hard to piece these together for the last 15 years.  Now, with high deductible plans, more transparency for costs, and on-time digital connectivity, there is less difficulty.

Information technology can deliver the needed information to the patient and the physician to improve not only the likelihood of improved care but also the time-to-achieve the outcomes.  Most patients want and need to be involved in their care.  There is evidence that giving patients access to their information results in higher levels of engagement and adherence to recommendations.  In fact, the latest evidence shows that patients have been signing up for access to their health system portals at a rate of 1% per month for over 30 months.

Continue reading “Health Value: IT and the Rise of Consumer Centricity”

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Jack CochranThe Health Care Blog recently featured our Open Letter to Primary Care Physicians,generating quite a bit of reaction. A commenter made the point that “we cannot expect” primary care physicians “to act differently until and unless they get paid differently.” [Emphasis added]

The comment refers to a doctor in solo practice and notes that “the first step is changing how you are paid, in one way or another. And there are many ways that work better than the current code-driven fee-for-service model.”

Does waiting for payment reform make sense? Or should primary care practices act now to change the way they practice in anticipation of payment shifts?

Moving Toward Value-based Care

Some physicians groups seem somewhat frozen – unsure exactly where health care payment is headed and thus waiting until there is a clearer signal.

But it seems to us that the payment reform signal grows louder and clearer and support for that contention comes in a recent research report* from McKesson, the international consultancy:

We can now say with certainty that healthcare delivery is moving in one direction: towards value-based care.

This is care that is paid for based on results – on measurable quality – as opposed to the traditional fee-for-service approach that pays for volume. McKesson notes that

The affordability crisis is causing unprecedented changes in the healthcare landscape, the most significant of which is the transition from the current volume-based model [fee-for-service] to myriad models based on measures of value.

To remain relevant and competitive, payers, hospitals, health systems, and clinicians must respond now to integrate value-based models into their existing systems.

Continue reading “Waiting For Payment Reform?”

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Screen Shot 2014-06-24 at 6.09.38 AMThere’s a growing view in U.S. healthcare circles that the industry is on the cusp of remarkable – perhaps even revolutionary – transformation. At a recent summit sponsored by the Altarum Institute’s Center for Sustainable Health Spending, speaker after speaker returned to the theme that we are slowly but surely moving from a volume-based system (paying for stuff) to a value-based model (paying for results).

The health sector is moving toward the traditional economic principles of other industries.  Revenues flow to businesses that are high quality, efficient and knowledgeable about customer desires. In other words, high performers reap the financial rewards, not those that are simply doing more. We at PwC describe this future state as the New Health Economy.

Several stars have aligned to make this shift possible. Cost pressures have turned attention to getting our money’s worth in healthcare. Technological advances such as cloud storage, mobile devices and data analytics provide the tools to deliver the right care to the right patient at the right time. And consumers today have both the freedom and responsibility that come with making more decisions and spending their own money.

What was striking at the Altarum summit was the widespread agreement on where American healthcare is headed. Speakers referenced the rise of myriad alternative payment programs, including overall spending growth limits in Massachusetts, site agnostic payments for specialty care such as oncology and provider bonuses tied to patient satisfaction.

Continue reading “The Next Health Economy”

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Screen Shot 2014-06-19 at 11.04.40 AMACO, MSSP, BPCI, HIE, CQM, P4P, PCMH, yadda, yadda, yadda … The litany of acronyms describing changing P&D (excuse me, payment and delivery) models can sometimes numb the senses. But it would be unwise to allow the latest healthcare jargon to lull you into an AIC—an acronym-induced coma, for which I believe there is a new ICD-10 code—because the world might look a lot different when you snap out of it.

Little debate exists that the U.S. healthcare system needs to transition from turnstile medicine to value-based care, from a predominantly fee-for-service payment model to one that emphasizes accountability for population health. This, of course, is not a novel concept, so the biggest challenges relate to how we get there. As many skeptics have argued, the same dynamics have existed before – unsustainable healthcare costs and too little value for our money – so the Talmudic question arises: Why is this era different from all other eras?

  1. EHRs have changed the playing field completely
  2. Reporting of comparative performance is now embedded into the delivery system
  3. We understand the centrality of patient engagement
  4. Today’s incentives reward greater accountability and value

There are some fundamental differences compared to, for example, the environment that existed in the 1990s when some experts believed managed care would change the underlying cost structure of the health care system. A majority of providers now have implemented electronic health records (EHRs) and an increasing number are – or soon will be as a result of Stage 2 “Meaningful Use” – able to exchange clinical data across network and vendor boundaries. The expectation that quality measurement will be used for holding providers accountable has taken root and most health care organizations regularly submit standardized performance data to public and private payers, purchasers and independent accrediting bodies. Providers increasingly recognize that their success in population health management relates to their ability to effectively engage with their patients in collaborative relationships.

Continue reading “Be Prepared: Beyond the Alphabet Soup of Value-Based Care”

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As the fashionistas might say, transparency in health care is having a moment. It made the PricewaterhouseCoopers top 10 list for 2014 industry issues, and there is every reason to expect transparency to be very visible this year and beyond.

Without a doubt, transparency is hot.

Despite this, there is increasing grumbling by observers who say that transparency is complicated and hard to operationalize. We also hear that transparency is “not enough” to constrain costs in our dysfunctional system, especially in the face of provider market power.

The word itself invites skepticism, in that it seems to over-simplify and promise a magical solution, as if daylight will provide health care pricing with a glow of rationality.

As usual, the truth lies somewhere in the middle. Transparency can and will provide information about price, quality, and consumer experience that market participants need in order to better understand the health care system and increase its value.

While this information is surely necessary, we have seen many examples of when it is not sufficient. Clearly, transparency is not the only tool that we need.

Here are a few thoughts about transparency issues for 2014.

Transparency tools will hit Main Street.

Increasingly, consumer-facing tools with various kinds information about health care prices are being created, whether it is okcopay or Change Healthcare. These entries join a growing list of transparency tools from carriers or third-party vendors.

The Robert Wood Johnson Foundation’s Hospital Price Transparency challenge, designed to promote awareness of hospital charge data, had a record number of entrant and the winning submissions are downright inspiring. RWJF also awarded grants for research on the use of price data in health care, including a number of studies of promising transparency tools aimed at consumers and providers.

The field is becoming more crowded, and it is increasingly important to determine the optimal way to reach the consumer with price and quality information.

There will be greater focus on the customer experience.

There is no doubt that the customer experience in health care lags behind the rest of the service sector, and consumers are increasingly demanding responsiveness and convenience in their encounters with the medical profession. The growth of evening and weekend hours, email communications with physicians, and patient portals are all harbingers of a new age where medicine is far more customer friendly.

RWJF’s Open Notes initiative allows patients to share notes with their doctors, while the Foundation’s Flip the Clinic program completely reimagines the doctor patient encounter in the ambulatory care setting.

Continue reading “Transparency a Go Go?”

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Hospitals are busily merging with other hospitals and buying up groups of doctors. They claim that size brings efficiency and the opportunity to deliver more “value-based” care — and fewer unnecessary services.

They argue that they have to get bigger to cut waste. What’s the evidence that bigger hospitals offer better value? Not a lot.

If you think of value as some combination of needed services delivered for the right price, large hospitals are no better than small hospitals on both counts.

The Dartmouth Atlas of Health Care and other sources have shown time and again that some of the biggest and best-known U.S. hospitals are no less guilty of subjecting patients to useless tests and marginal treatments.

Larger hospitals are also very good at raising prices. In 2010, an analysis for the Massachusetts attorney general found no correlation between price and quality of care.

study published recently in Health Affairs offered similar results for the rest of the country: On average, higher-priced hospitals are bigger, but offer no better quality of care.

Continue reading “Bigger Hospitals Mean Bigger Hospitals with Higher Prices. Not Better Care.”

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Forget for a moment the familiar scenes of action and outraged reaction that are playing out in our long-running national debate over how best to provide access to health care for every American. Instead, ask one simple question: what happens in the doctor’s office or hospital once access is achieved.

I set out to write a book addressing that question almost twenty years ago. I thought myself well qualified: I’d written about health care for a decade for the Chicago Tribune while receiving various awards and other recognition. But it didn’t take long for a painful realization to set in of how naïve I really was.

Digging through hundreds of studies, articles and other first-hand sources stretching back for decades, I was stunned to discover that repeated evidence of unsafe, ineffective, wasteful and downright random care had had no effect whatsoever on how doctors treated patients. Literally none. Moreover, the few professionals who understood this truth couldn’t talk about it in public without endangering their careers or engendering vitriol from peers.

Fortunately, I had no academic or clinical career to imperil. In the conclusion to Demanding Medical Excellence: Doctors and Accountability in the Information Age, I gave vent to anger and indignation. I wrote:

From ulcers to urinary tract infections, tonsils to organ transplants, back pain to breast cancer, asthma to arteriosclerosis, the evidence is irrefutable. Tens of thousands of patients have died or been injured year after year because readily available information was not used ­– and is not being used today – to guide their care. If one counts the lives lost to preventable medical mistakes, the toll reaches the hundreds of thousands.

The only barrier to saving these lives is the willingness of doctors and hospital administrators to change.

Demanding Medical Excellence came out in October, 1997. What progress has been made since then, and where we have fallen short? I address that question in a short article, “The Long Wait for Medical Excellence,” in the October, 2013 issue of Health Affairs. The purpose of this blog entry is to recap some of what’s said there (for you non-subscribers) and to add a few impolite observations that don’t jibe with the rules of a peer-reviewed journal.

Continue reading “Still Demanding Medical Excellence”

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recent analysis of the ACO market by Oliver Wyman market suggests we’re well on our way toward being “there.”

My personal take on this report:

Provocative, fresh, thoughtful, well reasoned, expansive — albeit a bit of a stretch

However, I suspect many others will describe it as:

Speculative, harebrained, unsupported, overly extrapolative, out-to-lunch, wishful to the point of being woo woo.

So now that I hopefully have your attention, what’s this report all about? In a nutshell:

The healthcare world has only gotten serious about accountable care organizations in the past two years, but it is already clear that they are well positioned to provide a serious competitive threat to traditional fee-for-service medicine. In “The ACO Surprise,” our analysis finds that 25 to 31 million Americans already receive their care through ACOs—and roughly 45 percent of the population live in regions served by at least one ACO.

Let’s dig in to the report. In this blog post, I’ll summarize their math, surface their critical assumptions and observations, and comment on their reasoning. I’ve indented direct quotations from the report.

While I don’t agree with all of Oliver Wyman’s math and assumptions, I applaud them for the process they have gone through. Please take my commentary as “quibbling at the edges” and that overall I’m on board with their methodology and conclusions.

Continue reading “ACOs: Is There a “There” There?”

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