How to buy more health

After decades of failed attempts to fix our healthcare systems, there is now a path forward, according to the influential Harvard economist Michael Porter: using real clinical data to decide which treatments produce the best outcomes for patients.

“We know how to solve the problem of healthcare, how to increase quality and reduce costs,” he said. “One of the central tools is transparency, and specifically, understanding outcomes,” Porter told delegates at the International Consortium for Health Outcomes Measurement (ICHOM) conference in London last week.

Healthcare – its cost, its quality and the rising demand – has long been one of the most intractable problems for economies around the world. There is a tremendous challenge, with spending on health swallowing up an increasing percentage of GDP in every country.

“That we haven’t been able to arrest growth doesn’t mean we haven’t tried,” Porter said. There have been many and varied attempts to control costs in the face of rising demand and a wave of expensive healthcare innovation. The fact that these initiatives have had little impact points to the need for structural reforms.

It was in taking an economist’s view of what restructured healthcare systems would need to achieve, that Porter hit on the idea of value. “Value gives us an overarching way of looking at what we have to get done. If we can improve value, citizens benefit, payers benefit, providers benefit,” he said.

Even in the context of the privately-financed system of the US, the word value was seldom applied to healthcare ten years ago when Porter published ‘Redefining Healthcare’, his seminal work on the theme. The notion of value-based healthcare remains antithetical for many in publicly-funded healthcare systems.

Putting the spotlight on value shifts the focus from metrics that reflect activity/costs, such as number of GP appointments, visits to A&E, or hip replacements, to measuring what really matters, which is the outcomes these resources generate.

“There is an increasing consensus around outcomes as the way to think about value,” Porter said. The question then becomes how to change the system to improve value. “That’s when outcomes become the central tool, he said. “The true worth in healthcare is value for the patients.”

Porter co-founded ICHOM in 2012 to support the vision of value-based healthcare by defining global standard sets of outcome measurements that are clinically relevant and really matter to patients. There are now 21 standard sets covering 33 per cent of the worldwide disease burden, each of which was scoped and agreed by international working groups of clinicians and patients.

By setting disease-specific standards it becomes possible to compare across providers, to identify inefficiencies and to see which treatments lead to the best outcomes.

The Consortium has gathered significant momentum, and from fewer than 100 delegates at the inaugural conference in November 2012, there were 800 at the London meeting. Thirty five countries were represented, with attendees including health ministers and senior policy makers, patients, payers, providers, clinicians and medtech and pharma companies.

ICHOM standards are being applied in pockets in 40 countries and the Consortium has a growing collection of case studies that show how outcomes measurements can be applied to improve performance.

Country assessments

The momentum has reached the top of the European Commission, with the Health Director-General Xavier Prats-Monné telling Science|Business in an interview last December that he was preparing the ground for the introduction of stronger country assessments and inter-country comparison tools, to help member states modernise their healthcare systems.

The Commission is working on this with the OECD, which since 2003 has been collecting its Health Care Quality Indicators, widely viewed as one of the world’s most reliable sources of comparable data in health.

OECD is now developing a new generation of health statistics, which will include better measures of patient outcomes. Such globally standardised datasets can spur quality improvements, said Mark Pearson, Deputy Director for Employment, Labour and Social Affairs at OECD.

“Data does drive change; you can see the variation over time, between regions, and so on,” Pearson said. However, he added, “You have got to measure the right thing.” Talk about health is dominated by cost when comparing between countries. “But cost without value is only half the discussion, and that’s where ICHOM comes in. OECD wants to find ways to measure value,” Pearson said.

The OECD Health Care Quality Indicators – as a proxy for value – have been powerful in informing policy in some countries. For example, when South Korea saw its lowly ranking against other OECD members in 30-day mortality after admission to hospital for a heart attack, it put a huge amount of effort into improvements.

Similarly, comparative data on unplanned admissions to hospital for people with diabetes show huge variations and drove policy change in France, which was doing badly.

However, different reporting standards and definitions make it hard to compare health data; if there are no standard definitions it is hard to get useful information. “In other words, we’ve had some successes, but it is limited – these are pinpricks of light – it needs to be much broader,” Pearson said. “Value depends on what patients get out of systems, as in all other areas of the economy.”

Health ministers from OECD countries will meet in Paris in January 2017 to try to get agreement on an international attempt to develop patient-reported experience measures and patient-reported outcome measures.

Lean towards PISA

Pearson said there are people who believe it is too ambitious to standardise patient representative outcomes across countries. However, he pointed to PISA (Programme for International Student Assessment), a test comparing the educational attainment of 15-year olds, which he was involved in formulating.

There are 65 countries participating in the tests. “[PISA] now dominates education discussion. Ministers use it to identify limitations and drive change,” said Pearson.

When OECD first set out to establish PISA, it faced the same arguments as there are currently over patient-centric outcomes – that school systems are so variable it was impossible to develop comparable international metrics. “It will take time, but we can develop international standards for patient-reported outcomes,” Pearson said.

Value informs restructuring

Before turning his attention to health, Porter applied economic principles to corporate strategy and competitiveness. As he told ICHOM delegates, making improvements in any sector requires the measurement of results. However, most healthcare systems do not track costs or outcomes at the patient level. “No one can tell you the actual costs of treating an individual patient over the full care cycle,” Porter said.

Coupling knowledge of the cost of a cycle of care with the ambition of maximising value for patients drives the logic of restructuring healthcare around specific diseases and conditions. Rather than patients being handed off from one specialist to another and shunted around the system, integrated practice units provide the full care cycle.

These units would deal not only with the disease – diabetes, say – but also with co-morbidities such as diabetic foot ulcers and retinopathy, and provide support such as advice on diet and help with self-management of the condition. Not only do patients get everything they need in one place, the practice units build greater expertise in treating the condition.

Porter claims that organising care around patients will cut costs. “We’ve done lots of studies showing typical cost reductions of 20 to 30 per cent,” he said. “If you’ve got good outcomes data you know what things you are doing that don’t justify the cost.”

Organising care around patients supports a move from paying for individual services, tests or procedures, to making a single – bundled - payment for a cycle of care. “With bundled payments you care for a condition, get paid for integrated care, and are accountable for outcomes specific to that condition,” said Porter.

In one such scheme in Sweden, providers get a fixed bundled price for handling all aspects of hip and knee replacements, from pre-operative assessment to rehabilitation. If there are complications, they have to absorb the extra cost. Complications fell by 16 per cent after the first year and 25 per cent after the second. Length of hospital stay fell by 16 per cent; costs by 17 per cent.

As this example illustrates, taking a holistic view leads to better care and reduced costs, but more importantly, it buys more health. “There is a long way to go, but this change will happen – it has to,” Porter concluded.