We continue our review of Porter & Lee’s ‘The Strategy that will fix Healthcare’.
As discussed last week in Part I, in the existing approach, patients most often receive portions of their care from a variety of types of clinicians, usually in several different locations, who function more like a spontaneously assembled “pickup team” than an integrated unit. They might undergo special testing e.g. radiology at any point- even before seeing a physician. Essentially, no one:
– measures patient outcomes
– measures how long the process takes
– measures how much the care costs
Thus, the VALUE of care never improves.
This problem has been reinforced by payment structures- however, all this is now changing. With massive pressure to contain costs, payors are aggressively reducing reimbursements and finally moving away from fee-for service and toward performance-based reimbursement. We are entering a period during which providers will work under multiple payment models with varying risk exposure. The days of charging higher fees for routine services in high-cost settings (e.g. hospitals) are quickly coming to an end.
In this environment, providers need a strategy that transcends traditional cost reduction and responds to new payment models. Providers that improve the efficiency of providing excellent care will:
– grow their market share
– be more competitive
– enter any contracting discussion from a position of strength
Let’s move away from a supply-driven health care system organized around what physicians do and towards a patient-centered system organized around what patients need. Let’s shift the focus from the volume & profitability of services provided- physician visits, hospitalizations, procedures and tests- to the patient outcomes achieved. And let’s replace today’s fragmented system, in which every local provider offers a full range of services, with a system in which services for particular medical conditions are concentrated in health delivery organizations and in the right locations to deliver high-value care
So, let us all agree on the overarching core goal of Value for health care systems – improving outcomes that matter to patients relative to the cost of achieving those outcomes- so that we can begin to make progress. How does that sound?
This ‘value agenda’ will require a restructuring of how health care delivery is organised, measured and reimbursed. The revolution is well under way- organisations such as the Cleveland clinic and Germany’s Schὅn Klinik have undertaken large-scale changes involving multiple components of the value agenda- leading to striking improvements in outcomes & efficiency, as well as growth in market share.
In Part III next week we’ll analyse the model for change that defines this ‘value agenda’, with its six interdependent components. The model for transformation of healthcare delivery.