Betty and Henry are two patients who have experienced long-term hip pain and are both candidates for total hip replacement surgery.
Betty’s physician refers her to a local hospital near her home, which has favorable patient experience reports. Unfortunately, that hospital has high readmission rates and does not post patient-reported post-surgery mobility data.
Henry and his physician, consult the International Consortium for Health Outcomes Measurement (ICHOM), an international organization that compares hip replacement outcome data across hospitals worldwide. Together they find a regional hospital an hour away from Henry’s home. This hospital has low readmission rates and ranks high with patient-reported, post-surgery mobility data.
During her pre-operative assessment, Betty can’t remember the full list of medications she takes. Obtaining her medical history causes a week’s delay in scheduling surgery. Henry, however, simply gives his physician permission to access his electronic medical record for obtaining his list of medications, as Henry’s regional hospital is linked with other hospitals through an integrated technology platform.
Betty’s surgeon chooses a prosthesis he always uses. Henry’s surgeon, however, chooses a prosthesis recommended by a team that includes himself, a geriatrician and a physiotherapist. The team discusses Henry’s mobility goals. Using a decision support tool – and noting that Henry is a devoted cyclist – the team recommends a prosthesis that will get Henry back on the road ASAP. Henry’s physician then schedules the surgery with a colleague, who has outstanding mobility outcomes with the prosthesis the team recommended.
Unfortunately, after their surgeries, both Betty and Henry develop infections at the surgical site and have to undergo additional surgeries. Because Betty’s local hospital operates under a traditional fee-for-service plan, she pays an additional $4000 co-pay. Her case coordinator at the local hospital assumed that the scheduled rehabilitation bed in another facility would remain available after the delayed discharge. But unfortunately, the bed was given to another patient. So, Betty’s physician authorized one more recuperation day in the hospital. Soon after returning home, Betty faints. She returns to the ER and is readmitted for five more days.
Alternatively, Henry’s second surgery at the regional hospital was included as part of a bundled payment. Henry’s medical team and his surgeon, incentivized through the bundled all-inclusive payment, manage both clinical and financial outcomes. Accordingly, all interventions associated with his hip replacement, including the second operation, are covered under the full cycle of care bundled payment “service warranty.” After successful rehab, which was included in the bundled payment, Henry was able to resume cycling – his most desired outcome – just six weeks post-surgery.
Unfortunately, Betty’s experience, while not a routine situation, happens all too often in the legacy fee-for-service, cost-reimbursement protocol at the local hospital. However, Henry’s better experience at the regional hospital was the result of a coordinated value-based healthcare delivery system.
Utilizing worldwide outcomes transparency, best practices, and elimination of wasteful spending, value-based delivery systems work synergistically to create a new paradigm of healthcare delivery centered around quality outcomes that matter to patients.
Now skeptics may ask, “Why the concern about quality outcomes that matter to the patient? And haven’t we always been concerned about quality outcomes? So, what’s the big deal?”
First, let’s accept that our current legacy system of fee for service and cost reimbursement is broken. According to Michael Porter of Harvard Business School, “Health care leaders and policy makers have tried countless incremental fixes – but none have had lasting impact.”
So, I say let’s move away from a supply-driven health care system organized around what providers do for patients, like Betty, and move toward a value-based system organized around what patients need, like Henry. Then, we shift the focus away from volume of services provided, physician visits, hospitalizations, procedures, and tests and towards value, centered on patient outcomes, desired and achieved.
And while we’re at it, let’s revisit the legacy delivery system like Betty experienced, where every local provider offers a full range of services and instead aspire to a value-based system like Henry experienced, where services for medical conditions are concentrated in a specialized regional health delivery system with facilities positioned in the right location, the latest technology, sufficient capacity, expertise and competency. Value-based healthcare proves that high value to patients significantly and consistently lowers healthcare cost. It’s time to stop competing on volume and compete on results that matter to patients.
Robert Lawrence Salter teaches healthcare management at Washington University in St. Louis.
