Digital tools a starting point for value-based healthcare

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Picture: ableX healthcare Ltd CEO Elliott Kernohan

NZHIT guest column by Elliott Kernohan

With an increasing focus on value-based healthcare internationally, digital tools and services provide an opportunity for New Zealand to make that shift as well.

Value-based healthcare is steadily gaining strategic currency in health systems around the world. Accountable care structures within the US health system claim better population and individual outcomes and control cost. The World Hospital Congress will gather this year in Brisbane around a theme that invites stepping beyond quality to value. The NHS with its META tool as part of NICE is making clear the relationship between clinical evidence and the value proposition when assessing new technologies.

In New Zealand we have become used to the cost- and value-based mantra in the context of public health procurement and service delivery, albeit framed within our existing supply models.

In his recent piece in eHealthNews.nz, Hamish Franklin made the case that New Zealand is in a reasonable position to consciously shift towards value-based funding for healthcare, by explicitly incentivising quality and outcomes alongside performance. Our health sector should give itself the mandate to start.

As this shift in emphasis takes hold, there is also a body of evidence emerging for telemedicine, telemonitoring and digital therapeutics. These digital technologies exist and increasingly they are proven. They are also inherently ready to scale and this ability to scale to an entire population drives the value proposition. Could digital tools and services be a starting point for value-based healthcare in New Zealand?

We might begin a discussion in the following three areas.

The healthcare investment case

Our language around care delivery is changing, but health investment models in New Zealand are not yet sensitive to the value of the patient’s lived outcome, to the correlation between quality of care and quality of life. We must keep looking to improve efficiency and reduce waste on the inputs side. However, our investment cases should also reflect benefits realised: how productive our health expenditure is, and how well our ‘whole of patient’ care pathways are serving the patient in real terms.

One of the challenges in assessing new approaches is to collect the correct information on outcomes and costs, to measure value across the system. We see only what we measure, so without a sensitivity to outcomes in the investment case our ideas of value will remain limited to throughput and attendances, and discharge to another provider’s budget.

A value-based habit could begin by seeding the widespread adoption of patient-reported outcome measures: continuously collect intelligence on what patients care about. Evidence-based practice could grow in scope to embrace QALYs and DALYs per dollar. What those QALYs mean in terms of total cost of care, social and economic impact is then a short step away.

When government began promoting the Integrated Data Infrastructure to data researchers it published a Treasury report showing that among eight serious chronic conditions affecting under-65s, the IRD tax take was most significantly and permanently impacted by stroke. As of last month, New Zealand expects a 40 per cent increase in stroke incidence, so to take this as an example, what’s the return on investment on delivering better post-stroke outcomes? With New Zealand’s wealth of centralised data, we just have to ask the right questions.

Reframe our delivery models

The digital revolution has been slow in coming to health – the integrated electronic health record will help information flow more efficiently, and secure teleconferencing improves the reach of specialists into remote areas. These innovations offer important improvements to existing pathways. But what about doing things altogether differently?

So far health hasn’t seen the same disintermediation that new tech has enabled in other sectors. I believe significant opportunities lie down this path if we embrace them. Can we capture and re-use the expertise invested in the workforce in ways that harness the motivation, time and effort of the patient? Think of Xero and its model, and how the practice of financial management has been transformed by shifting effort onto systems and consumers, enabling better productivity, accuracy, insight and personalisation.

In health, telemonitoring and digital therapeutics are central to this idea, not to substitute for the health professional, but putting the component parts of an activity into the hands of its most competent actor. Condition-management apps reduce acute admissions by empowering and engaging patients more.

A coordinated approach would address the dependency that exists today on the health professional to provide all of the expertise, all the accuracy and especially all the effort. Rethink the workflow. Especially in non-acute settings, these tools would create capacity where currently there is none to spare.

You get what you pay for

Our funding model limits the extent to which we can pursue the previous two ideas, by tying us to the status quo. Funding for healthcare on an activity-based model tends to prescribe both what to do and also largely how to deliver it (i.e., in person, in a hospital, at a clinic), and our ability to conceive of new modes of delivery is further constrained by the weight of that experience and the tightening of purse strings.

We haven’t heard much about the NZ Health Strategy lately, but it contains the important acknowledgement that room is likely needed in our funding models if its transformational goals are to be met. Funding flexibly should not mean spending more if it is linked to a smarter investment case and a modernised delivery model.  We need to permit that flexibility both pre- and post-acute care if we are to create value based around better outcomes.

Moreover, if digital tools are to be the enablers of those outcomes, their funding should be weighted within the delivery model, just as the MRI anchors the acute pathway. For example, more widespread use of subscription-based funding would mean the cost of a given intervention maps to its efficacy and its utility to the pathway, patient by patient. In concept this characterises digital therapeutics similarly to pharmaceuticals only with better data, and when implemented on a similar scale, cheaper. Measure these tools’ value by gains in capacity, quality, performance across the health system as a whole.   

Start with local technologies

Naturally I’m all for buying local, and New Zealand has its share of immediately applicable technologies with which to start. Most of these apply outside the emergency and acute context, and as such should represent lower-hanging value-based healthcare fruit. 

I don’t believe this a zero-sum game ending in rationalisation. Interventional technologies can enable a health service to make optimal use of its own workforce, the patient workforce and its data intelligence. In the process New Zealand ends up with more and better healthcare, and greater confidence across the system that we deliver not only social value but financial value through a focus on health outcomes.