Value-based Health Care

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1 Value-based Health Care Jens Deerberg-Wittram, MD BASEL, SEPTEMBER 20 TH 2018

2 1

3 In 1995, McArthur Wheeler robbed two banks after covering his face with lemon juice. He believed, because lemon juice is usable as invisible ink, it would prevent his face from being recorded on surveillance cameras But I wore the juice...! 2

4 Dunning-Kruger effect: Incompetent but confident Source: Unskilled and unaware of it: how difficulties in recognizing one's own incompetence lead to inflated self-assessments, Kruger, J., Dunning, D. (1999) 3

5 1:60 mortality rate in base jumping 4

6 Significant mortality differences in Swiss hospitals Pancreatic resection (cancerous lesion) Colorectal resection (cancerous lesions) % mortality 4.5 % mortality #1 #10 #1 #20 #64 53 hospitals perform procedure ( 15 ) 30 hospitals perform less than 10 cases/yr 103 hospitals perform procedure ( 72 ) 17 hospitals perform less than 10 cases/yr Open heart valve replacement Aortic aneurysm surgery % mortality 9 % mortality #1 #5 #1 #20 #30 22 hospitals perform procedure ( 232 ) 3 hospitals perform less than 10 cases/yr 40 hospitals perform procedure ( 50 ) 10 hospitals perform less than 10 cases/yr 5 Source: BAG 2016, BCG analysis

7 Average mortality rates of reporting Swiss Hospitals Pancreatic resection 6.7% Colorectal resection 4.2% Lungs/branchial resection Openheart valve replacement 2.2% 2.0% 3 5 Base-Jumping 1.4% 6

8 7

9 Health care costs are rising at unsustainable rates HC expenditure 2016: 17.2% of GDP HC expenditure 2016: 12.4% of GDP HC expenditure 2016: 11.0% of GDP HC Spend Income GDP HC Spend GDP Income HC Spend 1 Income GDP HC expenditure 2016: 11.3% of GDP HC Spend GDP Income HC expenditure 2016: 10.5% of GDP HC Spend GDP Income HC expenditure 2016: 9.7% of GDP 1. Long-term care spending included in HC Spend in Sweden after 2011, thus HC spend for Sweden is indexed and with HC being same as GDP growth Notes: Index 100 at 1995, based on local currencies; Income = Personal Disposable Income Source: WHO; EIU; BCG analysis HC Spend GDP Income 8

10 Switzerland outgrowing OECD in joint replacements Primary hip replacements (2016) Primary knee replacements (2016) Switzerland 308 Switzerland 240 Germany 299 USA 226 France 241 Germany 206 Sweden 234 Canda 178 USA 204 France 160 UK 182 UK 149 OECD 166 OECD 126 Canda 148 Sweden 124 Spain 113 Spain 120 Israel 62 Israel Per population Per population Source: OECD report "Helath at a glance 2017", BCG analysis 9

11 Price differences in hip replacement surgery Cost of hip replacement surgery ( ) 30,000 23,669 20,000 10,000 5,365 6,054 6,707 7, % 8,383 8,671 9,605 10,029 10,224 11,220 12,467 0 FR UK SE GE Ø NL IT BE CH ES AU US Note: All reimbursement rates in EUR (PPP) Source: BCG Analysis, country specific DRG databases 10

12 Switzerland as much as many other countries - is suffering from serious quality and cost issues in health care 11

13 Value-based health care is the emerging paradigm Initial description Concept Value 1 = Health outcomes that matter to patients Cost of delivering the outcomes Central goal in health care becomes value for the patient, not volume, cost containment or meeting single medical parameters 1. M. Porter: Redefining Health Care, 2006 Source: "Redefining Healthcare", BCG analysis 12

14 Outcome measurement the first step towards value-based health care Characteristics of the phases in the Transformation Roadmap For each phase understand the meaning for each dimension of the health care system Phase I Individual organizations begin measuring quality and reducing variation of patient outcomes resulting from treatment/products Payments Phase II Standardization of outcome metrics enables anonymous comparisons across and within health systems Phase III Public reporting creates incentives (financial and non-financial) to improve value Benchmarking research & tools Phase IV Health system are optimized for continuous improvement in value delivered to each population segments Informatics Delivery organization 13

15 Individual organizations are measuring outcomes 14

16 ICHOM defines global standards for outcomes that matter to patients A physician-patient partnership ICHOM facilitates a process with physician leaders and patient representatives to develop the Outcomes Minimum Standard Set ICHOM is an independent not-for-profit organization, main funding patients, payers, providers and governments Source: ICHOM, the International Consortium for Health Outcomes Measurement 15

17 Standardization of outcome metrics Outcome hierarchy by Michael Porter Survival Tier 1 Health status achieved or retained Degree of health or recovery Tier 2 Process of recovery Time to recovery & return to normal activities Disutility of care or treatment process (e.g., complications) Tier 3 Sustainability of health Sustainability of health or recovery and nature of recurrences Long-term consequences of therapy Source: M. Porter. What is value in health care? NEJM

18 ICHOM has already developed 23 Standard Sets covering over 50 percent of the global disease burden Standard Sets Source: ICHOM INFLAMMATORY BOWEL DISEASE INFLAMMATORY BOWEL DISEASE Ongoing discussions to launch 1. Bipolar disorder 2. End stage renal failure 3. Hypertension 4. Malaria 5. Adult population health 6. Substance use 7. Oral health 8. Inflammatory arthritis 9. Congenital hand malformations 10.Rotator cuff disease 11.Brain tumors 12.Upper GI cancers 13.Type 1 diabetes 14.Arrhythmia 17

19 Public reporting of outcomes across NHS England Source: NHS Choices website 18

20 Costs Outcomes Financial incentives to improve value Model design Bundled payment for hip- and knee surgery Payment of 56,300 SEK (~ 6,300) to cover full cycle of care, including diagnostics, surgery with post-operative care, implant and follow-ups Complication risk % % Outcomes improved with more than 18% -23% % 6.0% 4.9% 5.0% -44% 3.9% 2.0% 1.6% 1.0% 0.6% Complication guarantee Provider financially responsible for non-acute complications related to the primary surgery up to 2 years post-operation Result dependent payment 3.2% of the reimbursement was retained and paid out if the provider achieved defined goals 2y complications Cost per patient (ksek) Note: and were the 2 years before and after the new model was introduced. Source: New reimbursement model for care choice hip- and knee prosthesis surgery Follow up report; BCG analysis % 2y re-op rate y implant revision Costs and sick leave decreased with ~20% Days of sick leave % d cardiov. event months post surgery 12 months pre surgery 19

21 What Swiss providers should do in order to drive value? 1 Organize into integrated practice units 5 Expand excellent services geographically 2 Measure outcomes and costs for every patient Integrate care delivery between separate facilities 4 3 Move to value-based reimbursement models Source: M. Porter, the strategy that will fix health care. HBR 6 Build an enabling IT platform 20

22 Soon, there will be a time that our scholars and colleagues will not be satisfied with general comments on quality. Instead they will call any doctor a charlatan who is unable to quantify his medical outcomes. Theodor Billroth,

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