Porter’s Value-Based Healthcare Intensive Seminar
“Healthcare delivery is a fact-free zone.” So began our week at Harvard Business School, braving the polar vortex and demonstrating how alarmingly little we know about the real outcomes of the care that we deliver, or the true costs of delivering that care. Ninety-four delegates from around the world had a unique opportunity to attend Professor Michael Porter’s Values Based Healthcare Delivery (#VBHC) Intensive Seminar in Boston, Massachusetts – the fact that they attended in temperatures of -15°C is testament to the increasing traction that the value based doctrine is gaining here.
What is value based healthcare? Professor Porter and his colleague and co-author Elisabeth Teisburg discussed the experience of dozens of healthcare delivery organisations from across the globe and spectrum of care. The concept is deceptively simple: value is outcomes that matter to patients divided by the cost of achieving those outcomes. Simple, right? The cases demonstrated how visionary leadership had overcome considerable obstacles to implement these principles to staggering effect. The talismanic reorganisation of stroke services in London neatly illustrated how the concentration of patients in specialised ‘integrated practice units’ that are centred on particular conditions can produce significant reductions in deaths, disability and complications.
Can it work? To sign up to Porter and Teisberg’s concept requires some mental gymnastics and a willingness to embrace a longitudinal view of healthcare delivery, far removed from our activity-based service delivery silos; and a breadth and depth of patient-centred outcomes that reach far beyond stark mortality statistics and deeper than ‘satisfaction’ ratings.
Tell me more! The language of outcomes is gradually becoming more familiar, through its use in numerous strategic frameworks and documents. It is the second half of that numerator, ‘that matter to patients’, which is more challenging. How do we know that the results we measure reflect what is really important? Work has already been done to define these outcomes globally for certain conditions through the International Consortium for Healthcare Outcomes Measurement, affiliated with HBS. This draws on the outcomes hierarchy developed by Professor Michael Porter (for more reading, see http://hbr.org/product/the-strategy-that-will-fix-health-care/an/R1310B-PDF-ENG). This structures thinking about outcomes into three tiers: health status achieved or retained, process of recovery and sustainability of health.
Value-Based Health Care Delivery Intensive Seminar, January 6-10, 2014 at Harvard Business School
Cost, the equation’s denominator, is less familiar territory for many. This is especially true for clinicians, who often have little idea about the financial reality of the services they provide for their patients and can view involvement with money matters as anathema. Outcomes alone are not sufficient to guarantee an improvement in value and the sustainability of healthcare; attention to expenses is also vital. The course revealed the often crude mechanisms currently in common use for estimating expenditure. This demonstrated how erroneous decisions could be made on the basis of such faulty accounting, such as the incorrect conclusion in one case that rehabilitation services should be scrapped to build more unnecessary operating theatres. This value based strategy advocates that the accurate assessment of the detailed monetary input is necessary in order to properly plan services that yield real value for money. The Time-Driven Activity Based Costing (TDABC), developed by Professor Robert Kaplan, offers one promising way of better understanding these costs.
Why now? Press Ganey’s Chief Medical Officer, Tom Lee, used the Nash equilibrium to illustrate healthcare’s current conundrum: of multiple parties frozen in current relationships because no party can change its strategies while the other parties keep their strategies unchanged. Nash equilibriums break down only when the pain of status quo for multiple parties exceeds their fear of the unknown. With an anticipated NHS funding gap of £30 billion by 2021, the pain of the status quo is indeed mounting. It’s time for a game-changer and Value-Based Healthcare Delivery may just provide the way out of the quagmire.
The intensive seminar provided a seductive philosophy that offers real potential and appeals to a broad church of healthcare policy thinkers. Although the language of cost efficiency and profit margins may alienate some, the promise of improving the sustainability of healthcare systems attracts those who fear for the long term future of the NHS. The case based methodology highlighted instances where it has been realised successfully, but also drew attention to the fact that effective implementation is still restricted to a handful of pioneers. It remains to be seen if it can be used in the UK to improve the value of care in a way that is widespread and coherent, but which also safeguards the universal access and equity that are the founding principles of the NHS.
FMLM has developed the Quality strategy to reflect the current thinking around value based healthcare to form a Quality and Value Team, with regional support for members. A programme of workshops will soon be rolled out, so watch this space for more details.
Nikki Kanani, Howard Ryland and Rachael Brock