Shifting from Volume to Value: The Future is Now

Transcription

1 Shifting from Volume to Value: The Future is Now Kevin J. Bozic, MD, MBA Professor and Chair, Department of Surgery and Perioperative Care Dell Medical School at the University of Texas at Austin Visiting Scholar, Harvard Business School

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3 Challenges Faced by US Healthcare System Emphasis on healthcare, not health Fragmented delivery, payment systems Medical error/defensive medicine Medical arms race Moral hazard Now we just have to sit back and wait for the Fed to bail us out.

4 Lack of Competition Based on Value Patient choice and competition for patients are powerful forces to encourage continuous improvement in value and restructuring of care Today s competition in health care is not aligned with value Financial success of System participants Patient Success Creating positive-sum competition on value is fundamental to health care reform *Slide courtesy of Michael Porter, PhD

5 Role of Payment System in Improving Value? Patient- Centered Outcomes of Care VALUE Cost to Achieve Outcomes Value = patient centered health outcomes per the health dollar expended

6 6 Volume Based Payment (FFS)

7 Readmissions 2% Readmissions 2% Cost Savings 9% Post-Acute Care Post-Acute 27% Care 24% Index Admission - Physician Index Payment Admission - 10% Physician Payment 10% Value Based Payment Index Admission Index - Hospital Admission - 61% Hospital 55% Mean DRG 470 Payment per Distribution Episode after per Episode 10% Cost Savings Source: Brandeis Analysis of 2012 CMS Data Reduce/eliminate non value-added care Unnecessary care Avoidable complications/readmissions /reoperations Excess cost due to variation in price Inappropriate variation in

8 * For hip replacements, Austin is #18 in the nation in the cost differential ranking Source: Blue Cross Blue Shield. A Study of Cost Variation for Knee and Hip Replacement Surgeries in the U.S. January 2015 Cost Variation in Hip and Knee Arthroplasty Percent Difference between Minimum and Maximum Cost per Case, Top 9 Nationally Knee Replacement Hip Replacement TX: Dallas 267 MA: Boston-Worcester 313 MA: Boston-Worcester WA: Seattle-Bellvue-Everett CA: Los Angeles TX: Dallas PA: Philadelphia 163 TX: Houston 148 VA: Richmond-Petersburg 149 AZ: Phoenix-Mesa 140 TX: Houston 145 MN: Minneapolis-St. Paul 135 MN: Minneapolis-St. Paul 140 NE: Omaha 124 SC: Charleston 114 PA: Philadelphia 112 TX: Austin-San Marcos 111 MI: Grand Rapids 111

9 Providers Bear More Risk

10 Principles for Successful Implementation of Value-Based Payment

11 1. Assess cultural, operational readiness A. Risk tolerance B. Data systems, sharing C. Trust, Alignment D. Leadership

12 2. Identify clinical, administrative champions

13 3. Define the Episode for which you accept risk

14 4. Define performance metrics, gainsharing models

15 5. Understand care from the patient s perspective

16 $25,000 $20, Measure the Actual Costs of Care Delivery $458 $590 $1,218 $5,798 $24,059 N-317 Implant Cost Room & Board $13,756 OR Services $15,000 $10,000 $5,000 $- $5,650 $10,203 Hospital Cost Accounting - Hip $461 $356 $507 $2,244 $3,113 $6,301 TDABC

17 7. Use Data to Identify Opportunities for Improvement A) Evidence based vs. consensus

18 8. Redesign care to improve quality, reduce cost

19 9. Price/market episode of care program

20 10. Evaluate results, iterate

21 Provider Financial Performance What Do We Have To Lose? Fee-for-Service (RVU, DRG) System: Improved efficiency/decreased time = lower reimbursement NO consideration of outcome, value Value-based approaches Fee for service Time

22 What s Missing from Bundled Payments?

23 Preoperative Mental and Emotional Health Preoperative Physical Function Probability of meaningful improvement in function after TJR Preoperative functional threshold values are dependent on mental health Age, Gender, and Race Multivariate Analysis Logistic Regression Equation

24 Reorganizing the Delivery System Around Value Existing Model Organize by Specialty and Discrete Service Patient Engagement Primary Care Physicians Imaging Centers Orthopaedic Surgeons Behavioral Health PT/OT Chiropractor Acupuncture Hospitals Emotional Health Pathophysiology Empathic Communication Skills Scripted Post- Material for Low Health Literacy Decision Clinical Acute Aids condition: e.g., osteoarthritis, headache, back pain Outpatient Outcomes = PROMs = symptoms and limitations Inpatient Measurement Attributes: Staffed by dedicated multidisciplinary team Joint accountability for outcomes and costs Shared information platform Single administrative & scheduling structure Services co-located to the extent possible

25 Downstreaming Care

26 Volume vs. Value? Value-Based Healthcare Delivery 33% TJR rate Treating broader MSK disease patient population Providing more appropriate care 20% TJR rate Population cost of care decreases with lower percent of patients treated surgically MSK providers/facilities are fully utilized due to higher aggregate TJR volume Patients achieve better outcomes per healthcare dollar spent

27 Either we find ways to stretch our healthcare dollars by improving value, or The Choice is Ours Medical care must be provided with the utmost efficiency. To do less is a disservice to those we treat, and an injustice to those we might have treated - Sir William Osler Cost containment will be imposed on us by limiting access and cutting provider reimbursement

28 Value is Agnostic to Practice Setting Private practice Solo/small group Single specialty Hospital-based Multi-specialty group Integrated delivery network Academic practice

29 Are You Ready for Value-Based Healthcare? Focus on sustainable, patient-centric value creation Credible data! Cost Outcomes Well-defined goals, performance metrics Leadership!!

30 Thank You!!