Value-Based Healthcare

Michael Porter’s original vision was an ambitious one; ‘a strategy that will fix healthcare’. In his book which introduced the concept of ‘Value-Based Healthcare’ (VBH), entitled ‘Redefining Health Care’, Porter laid out what he believed would be a new way of thinking. In doing so, he made the case for delivering the best patient outcomes for the lowest cost by concentrating services around medical conditions, rather than on service volume and profitability.

Writing in the Harvard Business Review in 2013, Porter reasoned that the current healthcare system had not progressed in recent decades because it:

“rested on its own set of mutually reinforcing elements: organization by specialty with independent private-practice physicians; measurement of “quality” defined as process compliance; cost accounting driven not by costs but by charges; delivery systems with duplicative service lines and little integration; fragmentation of patient populations such that most providers do not have critical masses of patients with a given medical condition; siloed IT systems around medical specialties; and others”.

In Porter’s view, VBH overcomes many of the systemic flaws integral to the out-moded model of healthcare delivery by focusing on efficiency and patient-centred outcomes. It is for this reason that Akeso and Co have, in recent years, been at the forefront of proving the effectiveness of the concept of VBH across a range of NHS Trusts. We have demonstrated the wholesale efficiency gained possible by analysing and reorienting healthcare processes and decision making from a price-per-product focus to one based on patient outcomes. In this article we will discuss some of most exciting potential applications of VBH and outline how it has already benefitted patients, clinical and administrative staff, and, ultimately, the operational costs of many NHS Trusts across the country.

What does VBH mean in practice for health and care?

On its own the term ‘value-based healthcare’ is somewhat unhelpful. By exploring some of the various use cases is it possible to unravel the true potential of placing ‘value’ at the core of decision making. As of 2020, value-based healthcare has a vast range of applications across the health and care spectrum, including, which are being expanded continuously, including (but not limited to):

Formation of ICS’s / STP’s

Integrated care systems (ICSs) and sustainability and transformation plans, and the partnerships (STPs) are better enabling organisations to contain the costs of care pathways at a regional level. Greater value is being achieved because these systems and partnerships are working to reduce differences in practice and levels of care are being ironed out to reduce or eliminate so-called “patient inequity”.

While the ICSs and STPs were introduced in 2016, these are now are integral to the long-term (10-year forward) NHS plan launched in 2019 by Health Secretary Matt Hancock.

Getting It Right First Time (GIRFT)

GIRFT is an NHS improvement programme tackling variations in the way services are delivered across the NHS, and by sharing best practice between Trusts. As such, it is at the forefront of reducing ‘unwanted variation’, a problem highlighted by Lord Carter in 2016, which if dealt with has the potential to save £5bn. The concept is heavily predicated on reducing the frequency and costs of revision, and readmission rates, and, therefore, meets Porter’s original stated aim of VBH to provide the best patient outcomes for the lowest possible cost.

Measure outcomes for every patient

More and more healthcare providers are now revaluating what ‘value’ means to patients. By acknowledging that a hospital’s traditional measures of success may differ from those of the patient, it is possible to consider patient-reported outcomes as a measure of value, and then compare these to costs.

Integrating Care Delivery Systems

Integration of care delivery systems is now reducing fragmentation and duplication by determining the scope of services (not every hospital should deliver every service), concentrating volume in fewer locations, choosing the best location for each service, and integrating care across locations. Further, by linking the health and social patient pathways, a true picture of the patient journey can be created, thereby bringing all budgets into one place.

Value-based procurement

The VBH paradigm has now reached the NHS Supply Chain (NHSSC). In late 2019, the NHSSC announced it was announcing a range of complementary approaches to support its existing procurement strategies. The notion behind Value-based procurement (VBP) is that by shifting emphasis from reducing product costs, “to working with industry to consider technologies that can influence a reduction in total costs within the patient pathway”, considerable additional value can be derived. If successful, it is hoped that NHS Supply Chain can adopt the approach to drive sustainable increases in savings and improving patient outcomes.

Value-based community care

A patient’s health condition can take them on a journey which includes their home, their local GP, community-based health providers (e.g. community mental health, nursing and pharmacy). Viewed through a value-based lens, it is important that all health and care services co-operate and co-ordinate to share resources. For example, rural care providers could create a cooperative network, with the aim of offering more services closer to patients, and sharing of resources, especially where personnel is limited . Also, by funding all healthcare providers based on patient outcomes, there will be a greater incentive for primary, secondary, and tertiary health care providers to work together. By working with Akeso, we can help you design and implement value-based approaches across all patient settings, therefore enabling greater patient outcomes with considerable savings.

The breadth of potential application for VBH is continually widening. In our experience of working with a large number of Hospital Trusts across the UK, many healthcare providers are now increasingly taking a VBH view which takes into account all factors of health outcomes.

Minimally Invasive Surgery in Value-Based Healthcare

VBH can also play a key role in the justification of expenditure on new technology by healthcare organisations. In this context, in recent years Akeso & Co have been working with Hospital Trusts to assess the impact of minimally invasive surgery (MIS), including laparoscopic and robotic medical devices. It was discovered that while minimally invasive surgery has considerable advantages (including reduced length of stay, fewer complications, reduced risk of infection), it was only marginally cheaper overall when compared to standard abdominal surgery. Also, the cost of expensive MIS technology places considerable financial pressure on MedSurg departments.

A better model is needed to make a clear case for robotic and MIS medical technology. By shifting from the traditional model of return on investment to a value-based approach, whereby measures of patient outcome are the deciding factor, costs can be reduced. For example, when we take a patient outcome view, we found a 100% increase in hospital readmissions for open surgery compared with laparoscopic (3.6 vs 1.8 respectively). Looking at the whole patient journey for a specific condition (not just a single stay or procedure), and acknowledging that some patients require readmission, costs may potentially be reduced significantly by adopting MIS. It was concluded that by breaking down the ‘per-patient cost’ into the different components, it is possible to isolate and improve each to improve patient outcomes while gaining additional savings.

The challenges facing in VBH

VBH undoubtedly has considerable potential and benefits, but it does have challenges to overcome, including:

• VBH needs to take into account intangible benefits and outcomes which cannot be measured. A focus on hard cost savings means that the wider outcomes can go ignored.
• Value needs to be considered from all perspectives, including clinical, operational as well as financial.
• VBH needs to take account of the fact that costs which may rise in one part of the health and care system maybe later collected as a benefit by another organisation in the care pathway. By assessing the value at a care pathway level (i.e. across the continuum), ways can be found of sharing the cost and benefits achieved.

Our approach to VBH

Akeso & Co have collaborated with over 40 NHS Trusts to deliver millions in medical and operational efficiency savings.

As a case in point, our theatre solution is one such offering, giving hospitals:

• Greater theatre efficiencies – by analysing and improving the patient pathway from ward through to recovery
• Reduced Length of Stay (Los) – new advanced surgical techniques allow for reduced LoS (such as the MIS and robotic tools discussed above); we can assist with clinical and patient protocols to get patients home quicker
• Patient Product Traceability – implementation of new initiatives such as Scan4Safety and Inventory management allow traceability of when and where medical products and implants were used, therefore increasing patient safety and reducing wastage.

Final words

There is little doubt healthcare funding and decision making will increasingly be based on patient-centred outcomes and overall value. That said, VBH is only one of a number of measures that the NHS is adopting to improve the quality patient outcomes and population health, whilst reducing the total cost and improving the efficiency of Healthcare delivery at various levels of the system. Akeso & Co can help your healthcare organisation realise the benefits of the value-based approach which is already reaping considerable benefits in NHS trusts across the UK.

Akeso were proudly appointed as the Category Tower operator for Diagnostic technology and associated Consumables in the NHS Supply Chain Future Operating Model (CT8) in January 2018.