Care de­liv­ery in­no­va­tions must be com­bined to re­duce waste and boost value

Modern Healthcare - - COMMENT - By Stephen Short­ell

There is much talk about the con­tin­ued need for the healthcare sys­tem to elim­i­nate waste, es­ti­mated to be about 30% of healthcare spend­ing.

Waste is cre­ated pri­mar­ily by those who pro­vide care, but is re­in­forced by those who pay for it and by pa­tients who ei­ther de­mand care that pro­vides no value or fail to ques­tion provider treat­ment plans that pro­vide lit­tle or no value.

If we are se­ri­ous about elim­i­nat­ing waste, then a sys­tem­atic ap­proach is needed that ad­dresses the three pil­lars of healthcare re­form—cov­er­age re­form, pay­ment re­form and de­liv­ery-sys­tem re­form.

All three must be con­sid­ered in tan­dem as they co-evolve in com­plex ways in dif­fer­ent com­mu­ni­ties across the coun­try. For ex­am­ple, risk-based pay­ment mod­els like ac­count­able care or­ga­ni­za­tions are more likely to ex­ist in states with their own in­sur­ance ex­changes. Given the pres­sures to con­tain costs, they are also more likely to be as­so­ci­ated with a greater preva­lence of nar­row or more “se­lec­tive” provider net­works gen­er­at­ing a con­cern that they will lead to even greater frag­men­ta­tion of care than now ex­ists.

Some ev­i­dence is emerg­ing from states such as Cal­i­for­nia show­ing that health plans as­so­ci­ated pri­mar­ily with more in­te­grated de­liv­ery sys­tems gen­er­ally have higher qual­ity scores with­out us­ing more re­sources than less-in­te­grated mod­els, such as the pre­ferred provider or­ga­ni­za­tions typ­i­cally as­so­ci­ated with nar­row net­works. Given such in­ter­play among the three pil­lars of healthcare re­form, how can waste be elim­i­nated and greater value be cre­ated?

A par­tial an­swer lies in rec­og­niz­ing the need for in­no­va­tion across all of those pil­lars. Lessons from be­hav­ioral eco­nom­ics can be used to de­sign ben­e­fit pack­ages that re­ward con­sumers for seek­ing early pre­ven­tive care, and pe­nal­ize them for seek­ing treat­ments for which there is lit­tle or no ev­i­dence of value. On the pay­ment front, the CMS and the pri­vate sec­tor are ex­per­i­ment­ing with a va­ri­ety of ap­proaches, in­clud­ing penal­ties for read­mis­sions, bun­dled pay­ments for se­lected con­di­tions and var­i­ous de­grees of cap­i­tated pay­ments and global bud­gets. While cov­er­age and pay­ment re­form can pro­vide the foun­da­tion for elim­i­nat­ing waste and cre­at­ing greater value, the bulk of the work must be done by the de­liv­ery sys­tem.

The great­est op­por­tu­nity to elim­i­nate waste and cre­ate greater value is at the nexus of where physi­cians and other providers en­gage pa­tients. This is the heart of clin­i­cal in­te­gra­tion—de­fined as the ex­tent to which the care pro­vided is co­or­di­nated across con­di­tions, vis­its, providers and set­tings over time. This process needs to be stud­ied to root out waste, elim­i­nate com­plex­ity in steps that do not add value, and iden­tify the “value leak­ages” that oc­cur par­tic­u­larly dur­ing the hand-off stage from one provider to another or from one set­ting to another.

There is a nat­u­ral hu­man ten­dency to look for sim­ple so­lu­tions to prob­lems. Healthcare is no dif­fer­ent. The field abounds in in­no­va­tions in­clud­ing new drugs and de­vices, health coaches, same-day sched­ul­ing sys­tems and use of mo­bile de­vices. Healthcare in­no­va­tion cen­ters have sprung up around the coun­try—many as­so­ci­ated with lead­ing in­te­grated de­liv­ery sys­tems—that are work­ing on de­vel­op­ing new ap­proaches to de­liv­er­ing more cost-ef­fec­tive care. Too of­ten, how­ever, these are cen­tered on a sin­gle one-off in­no­va­tion to solve a prob­lem that is not amenable to a sin­gle ap­proach.

Com­plex prob­lems re­quire sev­eral in­ter­de­pen­dent in­no­va­tions that re­in­force each other, called “pack­aged in­no­va­tions.” They must be de­vel­oped and im­ple­mented as a pack­age or group to achieve im­pact.

For ex­am­ple, a pro­gram de­signed to work with pa­tients who have dif­fi­culty keep­ing their Type 2 di­a­betes un­der con­trol might com­bine a di­a­betes nurse ed­u­ca­tor with pa­tients hav­ing ac­cess to their elec­tronic health record through a pa­tient por­tal along with a re­cep­tion­ist who has a tar­get list of pa­tients for fol­low-up phone calls us­ing a pre-pop­u­lated dis­ease reg­istry. The pack­age in­creases the chances for suc­cess com­pared with only hir­ing a di­a­betes nurse ed­u­ca­tor.

Our healthcare sys­tem will need to con­tin­u­ously in­no­vate to in­cor­po­rate de­sired new ad­vances in bio­med­i­cal tech­nolo­gies and ful­fill the prom­ise of pre­ci­sion medicine within the con­tin­u­ing pres­sure to re­strain the growth in costs. This will re­quire the use of high-oc­tane pack­aged in­no­va­tions that strike at the roots of waste and that fa­cil­i­tate ev­i­dence-based care pro­vided through tech­nol­ogy-en­abled healthcare teams to cre­ate greater value for pa­tients.

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Stephen Short­ell is a pro­fes­sor of health pol­icy and man­age­ment at the Univer­sity of Cal­i­for­nia at Berke­ley, where he also di­rects the Cen­ter for Healthcare Or­ga­ni­za­tional and In­no­va­tion Re­search.

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