Value-based healthcare in action: Opportunities, challenges and other stuff

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NZHIT guest column by Dr Lloyd McCann

New Zealand-developed and implemented value-based healthcare schemes are significantly improving experience and outcomes for patients, providing savings for funders and giving great satisfaction to clinical teams.

Value-based care is a hot topic in health. It is difficult to argue against the concept – we should be aiming to deliver the best possible outcome for consumers in a cost-effective manner. However, since American academic Michael Porter first wrote about value in health, systems around the world have been grappling with moving the value agenda from theory to practice.

Moving beyond theory

We have been developing and implementing value-based models of care within the Healthcare Holdings Limited private health system (this includes Mercy Radiology and MercyAscot Hospitals).

One example is our neck lump clinic. We bring a head and neck surgeon, radiologist and pathologist together so that a consumer with a neck lump sees everyone they need to see in one appointment to get a diagnosis and treatment plan.

This is not rocket science; yet, the impact is significant. We’ve turned what is traditionally an eight- to twelve-week pathway into one 45-minute appointment. For the close to 1000 patients who have come through the clinic this has meant immediate reassurance or a markedly optimised pathway to receiving the treatment they require.

Southern Cross Insurance has been funding the clinic as an affiliated-provider service under a pilot scheme for the past three months. The results are improved experience and outcomes for patients, savings for funders and tremendous satisfaction for the clinical teams involved.

In another example, ACC, ProCare and Mercy Radiology teamed up to optimise a high-tech imaging pathway. In this initiative, specific protocols and guidelines and an education package were developed to enable GPs to order MRI scans for certain musculoskeletal conditions.

The impact was significant: over 30 years of waiting time was removed from the system for ACC clients in the initial 12 months of the initiative: people could return to work more quickly, GPs were empowered to manage their patients and, for those requiring specialist assessment and treatment, surgical pathways were optimised.

These are two examples of value-based healthcare in action and there are many more around the world. Successful value-based healthcare models do, however, continue to be rare and small scale.

Moving forward

Many forces and factors continue to push against the value-based care movement.

1. Provider-centricity. Despite patient-centred/consumer-centred design and movements being around for decades, health service delivery remains largely provider-centric. This extends to how we define value. A universal definition and understanding of value can only be reached if we organise around the needs of, and outcomes we need to deliver for, consumers.
2.  Lack of design-thinking. This is closely linked to our ongoing orientation to provider-centricity. Systems and processes should be designed around the needs of consumers.
3. Risk. A move to value means relevant stakeholders in the system need to be prepared to accept or share risk. Outcomes can’t be guaranteed so funders and providers need to develop models where risk is shared, but where incentives drive behaviours to deliver the best possible outcomes for consumers.
4. Funding. Most funding mechanisms are still set up to pay for outputs and processes rather than outcomes. The shift to funding value is difficult, but ultimately this must be overcome and become the prevailing funding model to embed value-based care.
5. Measurement. Linked to our understanding of value, we need to ensure we’re able to measure the outcomes that matter to consumers. This is an area where digital health can play an important role.

Role for digital health

Digital health has an important role to play in the delivery and evaluation of value-based models of care. Digital health solutions can impact on both the numerator side (outcomes) and denominator side (cost) of the value equation.

We can use patient-reported outcome measures (PROMs) tools to track outcomes and evaluate changes in outcomes that matter to consumers. We can also use a myriad of digital health solutions to deliver care more efficiently, improve information flow between providers and indeed consumers, and empower consumers to interact with health services on their terms and at their own convenience.

These digital health approaches must be appropriately funded to ensure they are adopted and ultimately deliver value for consumers. (Note: I’ve heard the notion that funders should pay for providers’ IT systems. This does not make sense. Providers need to develop their own business cases that demonstrate return on investment through growth and efficiency. Digital health-enabled service delivery approaches and outcomes capture what funders should be paying for in these new models.)

Health targets framework

Finally, a quick comment on Health Minister David Clarke’s decision to scrap the health targets framework. While I think it would have been useful to have another measurement framework in place before the removal of the previous target framework, I strongly support the removal of the old target framework.

The targets all focused on outputs and processes. They contributed to a narrow and often unhelpful obsession around process rather than a focus on people and outcomes. There is an opportunity now to develop a measurement framework that will drive the value-based agenda and re-orientate our systems toward consumer-centricity. Let’s not waste this chance.

Dr Lloyd McCann recently spoke at the HealthTech conference in Auckland on value-based healthcare. You can watch a video interview with him on this topic, as well as videos of two other speakers, Aashima Gupta from Google on how Google Web Services can help the New Zealand healthcare system, and John Windsor summarising the research and clinical trials forum held at the conference.

Dr Lloyd McCann

Professor John Windsor 

Aashima Gupta

Dr Lloyd McCann is the CEO of Mercy Radiology & Clinics and the head of digital health for Healthcare Holdings Limited.

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