This presentation draws heavily on Professor Porter’s research in health care delivery including Redefining Health Care (with Elizabeth Teisberg), What is Value in Health Care, NEJM, and The Strategy That Will Fix Health Care, HBR (with Thomas Lee).A fuller bibliography is attached. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of MichaelE. Porter and Thomas W. Feeley. For further background and references on value-based health care, see the website of the Institute for Strategy and Competitiveness.

Value-Based Health Care

Thomas W. Feeley, M.D.Dean’s Distinguished Leaders Lecture Series Presentation

New York Medical CollegeValhalla, N.Y.

Wednesday, November 28, 2018

100150200250300350

1995 2000 2005 2010 2016

100150200250300350

1995 2000 2005 2010 2016100150200250300350

1995 2000 2005 2010 2016100150200250300350

1995 2000 2005 2010 2016

The Health Care Problem Remains a Global IssueHealth Care Spending vs GDP and Income

1. Sweden changed reporting methodology and included long-term care spending in 2011, but not prior to 2011; thus HC spend for Sweden is indexed 1995-2010 and 2011-2016 with GDP growth 2010-11. Notes: All indexes based on local currencies; Income = Personal Disposable IncomeSource: WHO, EIU (May 2017), BCG analysis

Index(1995=100)

HC expenditure 2016:17.2% of GDP

HC expenditure 2016:11.4% of GDP

HC expenditure 2016:11.6% of GDP

Index(1995=100)

Index(1995=100)

HC expenditure 2016:11.8% of GDP

Index1(1995=100)

HC expenditure 2016:10.9% of GDP

Index(1995=100)

Index(1995=100)

HC expenditure 2016:9.2% of GDP

Personal Disposable Income Gross Domestic Product (GDP) Health Care Spending

100150200250300350

1995 2000 2005 2010 2016100150200250300350

1995 2000 2005 2010 2016

2

http://upload.wikimedia.org/wikipedia/commons/4/4c/Flag_of_Sweden.svg

Issues Facing Health Care in USA Today

3

• The costs of care are high and outcomes poor

• The contribution of multiple stakeholders in a cost-sensitive world

• How to measure performance in in health care

• How to transition to value-based reimbursement

• How to rationally deliver health care

4

Incremental “Solutions” Have Had Limited Impact

• Evidence-based medicine • Safety/eliminating errors• Prior authorization for expensive

services• Patients as paying customers• Electronic medical records• Introducing “lean” process

improvements

• Care coordinators• Programs to address generic high cost

areas (e.g. readmissions, post acute)• Mergers and consolidation• IBM Watson• Personalized medicine

• Restructuring health care delivery is needed, not incremental improvements

Creating a Value-Based Health Care System

• Today’s care delivery approaches reflect legacy organizational structures, management practices, payment models that were built on historical medical practices.

• There have been significant advances medical science yet modern service delivery practices have not evolved.

• Health care has gotten lost in the complexity and has pursued multiple goals including patient experience, safety, efficacy, access, research and training, etc.

• In order to transform the system, we need a single, unifying goal that aligns all interests

5

Solving the Health Care Problem

• The fundamental goal and purpose of health care is to improve value for patients

• Delivering high value health care is the definition of success

• Value is the only goal that can unite the interests of all system participants

• Improving value is the only real solution

• The question is how to design a health care delivery system that substantially improves patient value

Value =Health outcomes that matter to patients

Costs of delivering these outcomes

6

7

Principles of Value-Based Health Care Delivery

Value = The set of outcomes that matter for the conditionThe total costs of delivering these outcomes over the full care cycle

• In primary and preventive care, value is created in serving segments of patients with similar primary and preventive needs

• The medical condition is the proper unit of value creation and value measurement in health care delivery

• Value cannot be understood at the level of a hospital, a care site, a specialty, an intervention, a primary care practice or a broad population

• Value is created in caring for a patient’s medical condition (acute, chronic) over the full cycle of care

JournalArticlesRelated

To Value-Based HealthCare

Year

Value-Based Health Care is Rapidly Diffusing Peer Reviewed Literature 1990-2017

From: Science Direct; accessed January 2018, by Patrick Clapp, Baker Research Services 8

Year

2016

0

200

400

600

800

1000

1200

1400

1990 1995 2000 2005 2010 2015 2020

2017

1. Re-organize care around patient conditions, into integrated practice units (IPUs)

− For primary and preventive care, IPUs serve distinct patient segments

2. Measure outcomes and costs for every patient

3. Move to value-based reimbursement models, and ultimately bundled payments for conditions and primary care segments

4. Integrate multi-site care delivery systems

5. Expand or affiliate across geography to reinforce excellence

6. Build an enabling information technology platform

9

Creating Value-Based Health Care Delivery The Strategic Agenda

Core Principle: Organize Around the Medical Condition

• Health care is currently organized around specialties, facilities, discrete interventions (e.g. drugs separate from services, acute care is separate from rehab)

− Organizational structure must be centered around conditions

• Value is not created by individuals (e.g. anesthesiologists, surgeons, etc.)

− Value is created by teams with joint accountability and responsibility

• The medical condition is the unit at which value is created

10

Existing Model: Organize by Specialty and Discrete Service

New Model: Organize into Integrated Practice Units (IPUs) Around Conditions

Source: Porter, Michael E., Jain, Sachin, The University of Texas MD Anderson Cancer Center: Interdisciplinary Cancer Care. February 26, 2013.

OutpatientOncologist

Surgical Oncologist Speech &

Swallow

Dentist

Primary Care Physician

RadiationOncologist

RadiologistPathologist

Re-organize Care Around Patient Medical ConditionsHead & Neck Cancer Care at MD Anderson

11

12

Integrating Over The Cycle of Care Acute Hip and Knee-Osteoarthritis

Other Provider Entities

• Operating room• Recovery room• Orthopedic floor at hospital or

specialty surgery center

• Specialty office• Pre-op evaluation center

• Specialty office• Imaging facility

SURGICALImmediate return to OR for manipulation, if necessaryMEDICAL• Monitor coagulationLIVING• Provide daily living support

(showering, dressing)• Track risk indicators (fever,

swelling, other)PHYSICAL THERAPY• Daily or twice daily PT sessions

ANESTHESIA• Administer anesthesia (general,

epidural, or regional)

SURGICAL PROCEDURE• Determine approach (e.g.,

minimally invasive)• Insert device• Cement joint

PAIN MANAGEMENT• Prescribe preemptive

multimodal pain meds

• Meaning of diagnosis• Prognosis (short- and long-

term outcomes)• Drawbacks and benefits of

surgery

IMAGING• Perform and evaluate MRI and

x-ray-Assess cartilage loss-Assess bone alterations

CLINICAL EVALUATION• Review history and imaging• Perform physical exam• Recommend treatment plan

(surgery or other options)

• Nursing facility• Rehab facility• Physical therapy clinic• Home

MONITOR• Consult regularly with patientMANAGE• Prescribe prophylactic

antibiotics when needed• Set long-term exercise plan

• Revise joint, if necessary

• Specialty office• Primary care office• Health club

• Expectations for recovery• Importance of rehab• Post-surgery risk factors

INFORMING AND ENGAGING

MEASURING

ACCESSING

• Importance of exercise, maintaining healthy weight

• Joint-specific symptoms and function (e.g., WOMAC scale)

• Overall health (e.g., SF-12 scale)

• Baseline health status• Fitness for surgery (e.g., ASA

score)

• Blood loss• Operative time• Complications

• Infections• Joint-specific symptoms and

function• Inpatient length of stay• Ability to return to normal

activities

• Joint-specific symptoms and function• Weight gain or loss• Missed work• Overall health

MONITOR• Conduct PCP exam• Refer to specialists, if

necessary

PREVENT• Prescribe anti-inflammatory

medicines• Recommend exercise regimen• Set weight loss targets

• Importance of exercise, weight reduction, proper nutrition

• Loss of cartilage• Change in subchondral bone• Joint-specific symptoms and

function• Overall health

OVERALL PREP• Conduct home assessment• Monitor weight loss

SURGICAL PREP• Perform cardiology, pulmonary

evaluations• Run blood labs• Conduct pre-op physical exam

• Setting expectations• Importance of nutrition, weight

loss, vaccinations• Home preparation

• Importance of rehab adherence• Longitudinal care plan

Orthopedic Specialist

• PCP office• Health club• Physical therapy clinic

DIAGNOSING PREPARING INTERVENINGMONITORING/PREVENTINGRECOVERING/REHABBING

MONITORING/MANAGING

CARE DELIVERY • Refer to specialists

The Playbook for Integrated Practice Units (IPUs)1. Organized around a medical condition, or group of

closely related conditions.− Defined patient segments for primary care

2. Care is delivered by a dedicated, multidisciplinary team devoting a significant portion of their time to the condition

− In-house staff and affiliated staff with strong working relationships

3. ͏Co-located in dedicated facilities. A hub and spoke structure connecting multiple or affiliated sites, incorporating telemedicine where appropriate

4. Takes responsibility for the full cycle of care5. ͏Patient education, engagement, adherence, follow-up, and prevention

are integrated into the care process6. The unit has a clear clinical leader, a common scheduling and intake

process, and unified financial structure (single P + L) 7. A physician team captain, clinical care manager or both

oversees each patient’s care8. The IPU routinely measures outcomes, costs, care processes,

and patient experience using a common platform9. The team accepts joint accountability for outcomes and costs10. The team regularly meets formally and informally to discuss individual

patient care plans, process improvements, and how to improve results13

10.

14

Volume Matters for IPUs and Value• More patients with the same condition enables higher value

Better Results, Adjusted for Risk

Rapidly AccumulatingExperience

Rising Process Efficiency

Better Information/Clinical Data

More Tailored Facilities

Rising Capacity for

Sub-Specialization

More Fully Dedicated Teams

Faster Innovation

Greater Patient Volume in a

Medical Condition

Improving Reputation

Costs of IT, Measure-ment, and ProcessImprovement Spread

over More Patients

Wider Capabilities in the Care Cycle,

Including Patient Engagement

The Virtuous Circle of Value

Greater Leverage in Purchasing

Better utilization of capacity

15

The Next Challenge: Value Based Primary Care

• Segment the population based on primary care needs

• Organize primary care teams around patient segments (IPUs)• Measure outcomes and costs by segment• Create shared infrastructure across primary care IPUs to increase

efficiency and enhance value

• Integrate primary and specialty care• Move toward value based payments by patient segment

− Low income elderly− Frail or disabled elderly− Complex acute conditions− Others

− Healthy adults (women, men)− At risk adults− Multiple chronic conditions

16

Segmenting Primary Care

Healthy Adults

• Dedicated teams• Integrated with appropriate

specialists− Regular relationships− Training and protocols− Telemedicine− Embedded

• Shared practiceinfrastructure

− Low cost sites and telemedicine for routine services

− After hours services− Prevention hubs for complex

addictions, weight loss, etc.− Transportation for appropriate

populations

Frail Elderly,

Disabled

Low Income Elderly

Complete Chronic/Multiple Chronic

Complex Acute or

Behavioral Conditions

At Risk

Others

17

• Focuses on low-income older adults living in under-served urban communities– Four severity tiers

• Multidisciplinary team covering the full care cycle: physicians, PAs, NPs, RNs, medical assistants, scribes, care managers, social workers, clinical informatics specialists, and others

• Co-located in dedicated facilities. 40 sites across the Midwest • Explicit processes to engage patients and reduce obstacles

to accessing care such as free rides/home-visits, in-house pharmacyand selected events for community residents

• Selected in-house specialty services such as behavioral health and podiatry. Close relationships with preferred outside specialists selected based on outcomes, cost and ability to work with integrated model

• Meet daily and weekly to discuss patient care plans and process improvement

• Measure and accountable for outcomes, cost, and patient experience

• Single full-risk value-based payment covering overall care– Includes specialty and post-acute care

Value-Based Primary CareOak Street Health

Patient Experience/

Engagement/ Adherence

E.g., PSA, Gleason score, surgical margin

Protocols/Guidelines

Patient Initial Conditions,Risk Factors

Processes Indicators

Structure

E.g., Staff certification, facilities standards

Measure Outcomes for Every PatientThe Quality Measurement Landscape

18

Outcomes

Principles of Outcome Measurement• Outcomes should be measured by condition or primary care segment

– Not for specialties, procedures, or interventions

• Outcomes are always multi-dimensional and include what matters most to patients, not just to clinicians – Patient reported outcomes are important in every condition

• Outcomes cover the full cycle of care

• Outcome measurement includes initial conditions/risk factors to control for patient differences

• Outcomes should be standardized for each condition to maximize comparison, learning, and improvement

• Outcomes should be measured in the line of care

• Value-based principles differ from the historical focus on provider behavior versus overall patient success

19

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)

20

The Outcome Measures HierarchyTier

1

Tier2

Tier3

Health Status Achieved

or Retained

Process of Recovery

Sustainability of Health

Source: NEJM Dec 2010

• Achieved clinical status• Achieved functional status

• Care-related pain/discomfort• Complications• Re-intervention/readmission

• Long-term clinical status• Long-term functional status

• Time to diagnosis and treatment • Time to return home• Time to return to normal activities

40

50

60

70

80

90

100

0 200 400 600 800 1000

Source: Scientific Registry of Transplant Recipients, http://www.srtr.org

Adult Kidney Transplant Outcomes1987 - 1989

21

Percent 1-year Graft

Survival

Number of Transplants 1987 – 1989 (Three Year Period)

Number of centers: 219Number of transplants: 19,5881 Year Graft Survival: 79.6%

16 Greater than expected graft survival (7%)20 Worse than expected graft survival (10%)

40

50

60

70

80

90

100

0 200 400 600 800 1000 1200

Number of centers: 239Number of transplants: 51,8521 Year Graft Survival: 94.8%

Percent 1-year Graft

Survival

Adult Kidney Transplant Outcomes2013 - 2015

22Source: Scientific Registry of Transplant Recipients, http://www.srtr.org

Number of Transplants from 2013 – 2015 (Three Year Period)

Source: ICHOM

23

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

Measuring Multiple Outcomes Prostate Cancer Care in Germany

Source: ICHOM

Source: ICHOM

Chart1

Incontinence after one yearIncontinence after one year

Severe erectile dysfunction after one yearSevere erectile dysfunction after one year

5 year disease specific survival5 year disease specific survival

Best hospital

Average hospital

0.092

0.433

0.174

0.755

0.95

0.94

Sheet1

Best hospitalAverage hospital

Incontinence after one year9.2%43.3%

Severe erectile dysfunction after one year17.4%75.5%

5 year disease specific survival95%94%

To update the chart, enter data into this table. The data is automatically saved in the chart.

Source: ICHOM

24

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

Measuring Multiple Outcomes Prostate Cancer Care in Germany

Source: ICHOM

Source: ICHOM

Chart1

Incontinence after one yearIncontinence after one year

Severe erectile dysfunction after one yearSevere erectile dysfunction after one year

5 year disease specific survival5 year disease specific survival

Best hospital

Average hospital

0.092

0.433

0.174

0.755

0.95

0.94

Sheet1

Best hospitalAverage hospital

Incontinence after one year9.2%43.3%

Severe erectile dysfunction after one year17.4%75.5%

5 year disease specific survival95%94%

To update the chart, enter data into this table. The data is automatically saved in the chart.

Copyright 2018 © Professor Michael E. Porter

1. Localized Prostate Cancer *

2. Lower Back Pain *3. Coronary Artery

Disease *4. Cataracts *

Standard Sets Complete

(2013)

13. Breast Cancer*14. Dementia15. Frail Elderly16. Heart Failure17. Pregnancy and

Childbirth18. Colorectal Cancer*19. Overactive Bladder20. Craniofacial

Microsomia21. Inflammatory Bowel

Disease

Standard Sets Complete(2015-16)

5. Parkinson’s Disease*

6. Cleft Lip and Palate*

7. Stroke *8. Hip and Knee

Osteoarthritis*

9. Macular Degeneration*

10. Lung Cancer*

11. Depression and Anxiety*

12. Advanced Prostate Cancer *

Standard Sets Complete

(2014)22. Chronic Kidney

Disease*23. Congenital Upper

Limb Malformations24. Pediatric Facial Palsy25. Inflammatory

Arthritis26. Hypertension

Standard Sets Complete (2017-18)

Standardizing Minimum Outcome SetsICHOM Standard Sets

* Published Thus Far in Peer-Reviewed Journals (14)

25

27. Oral Health

28. Diabetes

29. Atrial Fibrillation

30. Overall Adult Health

31. Pediatric Health

32. Hand and Wrist

33. Neonates

34. Head and Neck Cancer

35. Congenital Heart Disease

36. Mental Health in Children and Young People

Committed/In Process

26

Measure Cost for Every Patient Principles

• Properly measuring the cost of care requires different cost accounting methods than prevailing approaches such as departmental, charge-based, or RVU-based costing

• Cost should be measured for each patient over the full cycle of care for the condition, or by primary care segment

• Cost is the actual expense of patient care, not the sum of charges billed or collected

• Cost is driven by the use of all the resources involved in a patient’s care (personnel, facilities, supplies, and support services)

– Time and actual costs, not arbitrary allocations

• Understanding costs requires mapping the care process

Source: Kaplan, Robert and Michael E. Porter, “The Big Idea: How to Solve the Cost Crisis in Health Care”, Harvard Business Review, September 1. 2011

27

Mapping Resource UtilizationMD Anderson Cancer Center – New Patient Visit

Registration and VerificationReceptionist, Patient Access

Specialist, Interpreter

IntakeNurse,

Receptionist

Clinician VisitMD, mid-level provider, medical

assistant, patient service coordinator, RN

Plan of Care DiscussionRN/LVN, MD, mid-

level provider, patient service coordinator

Plan of Care Scheduling

Patient Service Coordinator

Decision Point

Time (minutes)

Source: HBS, MD Anderson Cancer Center

28

Major Cost Reduction Opportunities in Health Care• Utilize physicians and skilled staff at the top of their licenses• Eliminate low- or non-value added services or tests• Reduce process variation that increases complexity and raises cost• Reduce cycle times across the care cycle• Invest in additional services or higher costs inputs that will lower overall care cycle cost• Move uncomplicated services out of highly-resourced facilities• Reduce service duplication and volume fragmentation across sites• Rationalize redundant administrative and scheduling units• Increase cost awareness in clinical teams• Decrease cost of claims management process

• Our work reveals typical cost reduction opportunities of 30+%• Many cost improvements also improve outcomes

• Accountable for costs and outcomes, patient by patient, and condition by condition

• A single risk-adjusted payment for the overall care for a life

Emerging Value-Based Payment ModelsCapitation (Population-Based) Bundled Payment

• Responsible for all needed care in the covered population

• Accountable for population level quality metrics

• At risk for the difference between the sum of payments for the population and overall spending

− Providers take disease incidence risk, not just execution/outlier risk

• Accountable for overall cost and population level quality measures

• A single risk adjusted payment for the overall care for a condition− Not for a specialty, procedure, or short

episode

• Covers the full set of services needed over an acute care cycle, or a defined time period for chronic care or primary care

• Contingent on condition-specificoutcomes− Including responsibility for avoidable

complications

• At risk for the difference between the bundled price and the actual cost of all included services− Limits of responsibility for unrelated care

and outliers

29

Bundled Payment Pilot – Head and Neck

Patients• Simplified bills and EOBs• Out-of-pocket costs known at

treatment start

• Insurance coverage does not dictate care

MD Anderson and UnitedHealthcare• Early experience with alternative

payment - feasibility

• Simplified billing, financial clearance, preauthorization

• Lever to measure patient outcomes

Findings: 88 patients enrolled, one patient triggered stop loss, financial trends positive, major problems with claims management for provider and payer

Walmart Centers of Excellence Programs

Conditions:• Cardiac• Cancer• Joint replacement

• Spine• Transplant• Weight loss

Partnerships:Cleveland Clinic (OH)

Geisinger (PA)

Kaiser Permanente (CA)

Johns Hopkins (MD)

Mayo Clinic (MN)

Memorial Hermann (TX)

Northeast Baptist (TX)

Virginia Mason (WA)

Emory (GA)

Source: Compiled from news.Walmart.com and through publically available news and press releases . 31

1. Defining the overall scope of services for each unit, and for the facility/system as a whole, where it can deliver high value− Affiliate when this creates value

2. Concentrate volume of patients by condition in fewer locations to support IPUs and improve outcomes and efficiency

3. Perform the right services in the right locations based on acuity level, resource fit, and the benefits of patient convenience for repetitive services– E.g., move less complex surgeries out of tertiary hospitals to smaller facilities and

outpatient surgery centers

4. Integrate the care cycle across sites via an IPU structure– Common scheduling– Digital services and telemedicine can help tie together the care cycle

32

Four Levels of Provider System Integration

Primary Care Practices

Specialty Care Centers

Specialty Care Center, Surgery Center & After-Hours Urgent Care

Specialty Care & Surgery Centers

Specialty Care Center, Surgery Center, After-Hours Urgent Care & Home Care

Wholly-Owned Outpatient Units

Community Inpatient PartnershipsCHOP Newborn Care

CHOP Pediatric Care

CHOP Newborn & Pediatric Care

Hospital & Integrated Specialty Program

33

Integrate Multi-site Care Children’s Hospital of Philadelphia Care Network

• Complex patients or surgery cared for at CHOP Main Hospital

• Moderate to low complexity cases in the Specialty Care Centers staffed with pediatric specialists

• Primary care network aids in the facilitation of care in the right location

• All facilities integrated using common EMR

Children’s Hospital of Philadelphia Care Network

34

35

Delivering the Right Care at the Right LocationRothman Institute, Philadelphia

Lowest Complexity

Low

Medium

Highest Complexity

Facility Capability

Price of Total Hip Replacement: ~$12,000 USD

Price of Total Hip

Replacement ~$45,000 USD

Patient Risk Factors: Age, Weight, Expected Activity, General Health, and Bone Quality

Ambulatory Surgery Center

Rothman Orthopaedic Specialty Hospital

Bryn MawrCommunity Hospital

Jefferson University Academic Medical Center

Move Appropriate Services Out of High Resource CentersMD Anderson Regional Cancer Care Centers

MD Anderson Main Campus

St. Luke’s Woodlands Hospital• Breast• Gynecologic• Dermatology/Skin

St. Luke’s Sugar Land Hospital

Houston Methodist St. Catherine Hospital• Breast• Colorectal• Dermatology/Skin• Genitourinary• Gynecologic• Head and neck• Thoracic• Reconstructive surgery

Memorial Hermann Memorial City Surgical Center• Day surgery

Bellaire Imaging Center• Diagnostic Imaging and phlebotomy

West Houston ImagingCenter• Diagnostic imaging and biopsy

• Head and Neck• Genitourinary• Colorectal

• Breast• Gynecologic• Dermatology/Skin

Houston Methodist St. John Hospital• Breast• Head and neck• Skin cancer and melanoma

36

Expand Geographic Reach of Centers of ExcellenceMD Anderson Cancer Network

Central DuPage Hospital, ILCardiac Surgery

McLeod Heart & Vascular Institute, SCCardiac Surgery

CLEVELAND CLINIC

Chester County Hospital, PACardiac Surgery

Rochester General Hospital, NY Cardiac Surgery

Expand Geographic ReachThe Cleveland Clinic Cardiac Affiliate Program

Pikeville Medical Center, KYCardiac Surgery

Cleveland Clinic Florida Weston, FLCardiac Surgery

Cape Fear Valley Medical Center, NCCardiac Surgery

Fisher-Titus Medical Center,OHCardiac Surgery

The Bellevue Hospital, OHCardiac Surgery

38

The Heart Center Texas Children’s

Hospital in Houston(2.2%)*

Inpatient Mortality RateState average: 4.5%

Dallas

Children’s Hospital of San Antonio

(4.2%)

Covenant Hospital in Lubbock(17.1%)**

ABC Hospital of Mexico City

(2%)

Regional Strategy at Texas Children’s Heart Center

New Mexico

Texas

39

Broad Based Affiliations Across a RegionVanderbilt Health Affiliated Network (VHAN)

A Clinically Integrated System• 12 health systems• 45 hospitals• Ownership remains with each institution• Joint efforts to improve outcomes and lower cost• Referrals across organizations• Joint ventures on selected service lines• Shared support services• Common health plan with >100K lives covered

40

41

Build an Enabling IT PlatformAttributes of a Value-Based IT Platform

1. Combines all types of data for each patient across the full care cycle (notes, lab tests, genomics, imaging, costs) using standard definitions and terminology

2. Tools to capture, store, and extract structured data and eliminate free text

3. Data is captured in the clinical and administrative workflow

4. Data is stored and easily extractable from a common warehouse. Capability to aggregate, extract, run analytics and display data by condition and over time

5. ͏Full interoperability allowing data sharing within and across networks, EMR platforms, referring clinicians, and health plans

6. Platform is structured to enable the capture and aggregation of outcomes, costing parameters, and bundled payment eligibility/billing

7. Leverages mobile technology for scheduling, PROMs collection, secure patient communication and monitoring, virtual visits, access to clinical notes, and patient education

42

A Mutually Reinforcing Strategic Agenda1

Organize into Integrated Practice

Units (IPUs)

2Measure

Outcomes and Cost For Every Patient

3Move to Bundled

Payments for Care Cycles

4Integrate

Care Delivery Systems

5Expand

Geographic Reach

6 Build an Integrated Information Technology Platform

Developing a Value-Based Health Care Program

• Develop a common language of value• Collaborate with those interested in agenda internally and externally – work with other

organizations• Engage thought leaders locally• Pilot portions of the agenda

“Early successes made subsequent implementation easier” Dereesa Reid, Past CEO, Hoag Orthopedic Institute

• Develop a value organization with leadership support • Education in value concepts - HBS curriculum

– Executive Strategy for leadership – buy in from top– Value Measurement in Healthcare for implementers– Intensive Seminar for young healthcare professionals

• Engaging skilled coaches

Challenges to Implementing Value-Based Health Care

Change in health care is difficult

– Local traditions

– Busy clinical operations

– Little time to reflect on change and implement change

– Leaders not experienced in change management

– Leadership selection in AMCs has wrong focus

Clinical Leadership Characteristics

Traditional Leaders

• Extensive peer reviewed publication• NIH or other peer reviewed funding• Laboratory or clinical research• Leadership “experience”• Search committee and search firm

endorsements• Clinical care +/-

Clinical Leadership Characteristics

Traditional Leaders

• Extensive peer reviewed publication• NIH or other peer reviewed funding• Laboratory or clinical research• Leadership “experience”• Search committee and search firm

endorsements• Clinical care +/-

Transformational Leaders

• Individuals with a vision and framework for future

• Management training and experience• Ability to work in highly matrixed

organizations• Financial and human resource capabilities• Communicators• Clinical and research capabilities

The Health Care Transformation is Well Underway

• We know the path forward

• Value for patients is the True North

• Value based thinking is restructuring care organization, health system strategy and payment models

• Standardized outcome measurement and new costing practices are beginning to accelerate value improvement

• Employers, suppliers, and insurers can be the next accelerators

• Government policy is beginning to reinforce value improvement

• We are anxious to work with all of you in accelerating this transformation

47

Selected References on Value-Based Health Care• Porter, M.E., Teisberg, E. (2006). Redefining Health Care: Creating Value-Based Competition on Results. Harvard Business Publishing.• Porter, M.E., Teisberg, E.O. (2007). How Physicians Can Change the Future of Health Care. JAMA;297:1103‐1111.• Porter, M.E. (2008). Value‐Based Health Care Delivery. Annals of Surgery; 248: 503‐509.• Porter, M.E. (2010). What Is Value in Health Care? New England Journal of Medicine.• Kaplan, R.S and Porter, M.E. (2011). How to Solve the Cost Crisis in Health Care. Harvard Business Review. September 2011. • Porter, M.E., Pabo, E.A., Lee, T.H. (2013). Redesigning Primary Care: A Strategic Vision To Improve Value By Organizing Around Patients’

Needs. Health Affairs; 32: 516‐525.• Porter, M.E. and Lee, T.H. (2013). The Strategy that Will Fix Health Care. Harvard Business Review. October 2013. • Porter, M.E. and Lee, T.H (2015). Why Strategy Matters Now. New England Journal of Medicine. • Carberry K., Landman Z., Xie M., Feeley T. (2015) Incorporating Longitudinal Pediatric Patient-Centered Outcome Measurement into the

Clinical Workflow using a Commercial Electronic Health Record: a Step toward Increasing Value for the Patient. Journal of American Medical Informatics Association.

• Ying A., Feeley T., Porter M. (2016) Value-based Health Care: Implications for Thyroid Cancer. International Journal of Endocrine Oncology• Porter M.E., Larsson S., Lee, T.H. (2016). Standardizing Patient Outcomes Measurement. New England Journal of Medicine• Porter M.E. and Kaplan R.S. (2016) How to Pay for Health Care. Harvard Business Review. July 2016• Thaker N.G., Ali T.N., Porter M.E, Feeley T.W., Kaplan R.S., Frank S.J. Communicating Value in Healthcare using Radar Charts: A Case Study

of Prostate Cancer. Journal of Oncology Practice. September 2016. • Witkowski M., Hernandez A., Lee T.H., Chandra A., Feeley T.W., Kaplan R.S. and Porter, M. E. The State of Bundled Payments, Working Paper.

Unpublished. May 2017.• Websites Including Videos

– http://www.isc.hbs.edu/– https://www.ichom.org/– Case studies and curriculum guide available at: http://www.isc.hbs.edu/resources/courses/health-care-courses/Pages/health-care-

curriculum.aspx48

http://www.isc.hbs.edu/https://www.ichom.org/http://www.isc.hbs.edu/resources/courses/health-care-courses/Pages/health-care-curriculum.aspx

Slide Number 1Slide Number 2Slide Number 3Incremental “Solutions” Have Had Limited ImpactSlide Number 5Slide Number 6Principles of Value-Based Health Care DeliverySlide Number 8Creating Value-Based Health Care Delivery �The Strategic AgendaSlide Number 10Slide Number 11Integrating Over The Cycle of Care �Acute Hip and Knee-OsteoarthritisSlide Number 13Volume Matters for IPUs and ValueThe Next Challenge: Value Based Primary CareSegmenting Primary Care�Value-Based Primary Care�Oak Street HealthSlide Number 18Slide Number 19The Outcome Measures HierarchySlide Number 21Slide Number 22Slide Number 23Slide Number 24Standardizing Minimum Outcome Sets�ICHOM Standard SetsMeasure Cost for Every Patient �PrinciplesMapping Resource Utilization�MD Anderson Cancer Center – New Patient VisitMajor Cost Reduction Opportunities in Health CareSlide Number 29Bundled Payment Pilot – Head and Neck�Walmart Centers of Excellence ProgramsSlide Number 32Slide Number 33Slide Number 34Delivering the Right Care at the Right Location�Rothman Institute, PhiladelphiaSlide Number 36Slide Number 37Slide Number 38Slide Number 39Slide Number 40Build an Enabling IT Platform�Attributes of a Value-Based IT PlatformA Mutually Reinforcing Strategic AgendaDeveloping a Value-Based Health Care ProgramChallenges to Implementing Value-Based Health Care Clinical Leadership CharacteristicsClinical Leadership CharacteristicsThe Health Care Transformation is Well UnderwaySelected References on Value-Based Health Care