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Value-based Competition: the Role of Outcome Measurement
Public Health Forum 21 Heft 81 (2013) http://journals.elsevier.de/pubhef
Value-based Competition: the Role of Outcome Measurement Jens Deerberg-Wittram, Clemens Guth and Michael E. Porter Health care systems around the globe are organized in a wide variety of different ways. From single-payer public system like the NHS in the UK, to ‘‘market-based’’ systems with competing insurance options and competing for-profit and non-profit providers in Germany, we can find every shade of gray in the spectrum between ‘‘public’’ and ‘‘private,’’ and between ‘‘state-run’’ and ‘‘market.’’ Despite intense political discussions about the ‘‘right system,’’ however, no system has won out. Quite on the contrary, all health care systems, no matter how they are organized, are facing rising costs and significant variation in quality. Countries with national health services often have lower costs but serious concerns about waiting lists and limiting services, while more market-based systems provide ample services but at high costs. What do all these systems have in common? The sad truth is that no system is centered on outcomes, the results of care that really matter to patients. Twenty-five years of healthcare reforms in Germany have never systematically tackled this deficit (Porter, 2012). Without the ability to measure and compare outcomes, the essential information necessary to improve health care systems is lacking – no matter how they are organized. As Donabedian stated in his landmark article on quality of medical care, ‘‘Outcomes, by and large, remain the ultimate validation of the effectiveness and quality of medical care.’’ Donabedian, 1966) Unfortunately, outcomes are largely unknown to
most providers, patients and health plans. In normal markets, competition drives quality improvement and cost reduction. Strong competitors who best meet customer needs at the lowest price prosper, pushing rivals to either improve or leave the market. Competition is not about ‘‘beating’’ other producers but about serving customer needs uniquely well. In health care, the equivalent of ‘‘customer needs’’ is value, defined as the patient outcomes versus the costs involved in care (Porter, 2010). The only solution to the problem of health care is to dramatically improve value. Without improving value, there is no solution but rather cost shifting to patients, restriction of services, and declining incomes of health care professionals. The starting point to any real progress in health care is comprehensive measurement of outcomes. Outcomes should be measured for each medical condition. Rather than focusing on single procedures or specialties, outcome sets must cover the full care cycle, from diagnosis, to treatment, to rehabilitation covering both inpatient and outpatient care. Risk adjustment for individual patient circumstances is also needed to compare outcomes across patients and across time. Clinical indicators and process metrics, which are the overwhelming focus of measurement today, are useful but not what ultimately matters. For example, in prostate cancer treatment, physicians around the world are regularly measuring the patient’s PSA level to assess the presence of the
disease. Similarly, they document process metrics such as the number of biopsies performed for diagnosis or the length of stay in the hospital. Although these measures are important, they are not outcomes that matter to patients. Patients with prostate cancer are interested in treatment results like survival, surgical complications, incontinence, and erectile dysfunction, as well as anxiety levels and overall quality of life. These outcomes define the true success of medical care from a patient’s perspective. Given that outcomes are what matters to patients, the importance of standardized outcomes measurement and reporting is self-evident. Standardized measures and transparent reporting allow for benchmarking, best practice sharing, and improvement. In the absence of standardized outcome measures, current reimbursement models are based primarily on input parameters, such as the volume of discrete services and the complexity of procedures. Fortunately, a growing number of providers and quality measurement initiatives are demonstrating that measuring and reporting meaningful outcomes is driving rapid learning and improvement – and, ultimately, decreasing cost and increasing quality. In Germany, there has been limited outcome measurement in the past, but some innovated outcome measurement efforts have been established but have yet to spread widely (Scriba, Nimptsch, Mansky, 2013). To help accelerate this process, we, together with The Boston Consulting Group and The Karolinska Institute in Stockholm, founded the International
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Public Health Forum 21 Heft 81 (2013) http://journals.elsevier.de/pubhef
Consortium for Health Outcomes Measurement (ICHOM) in 2012. ICHOM (http://www.ichom.org) is an independent not-for profit organization that aims to unite disparate outcome measurement efforts across conditions and countries, and accelerate the rollout of comprehensive outcomes measurement on a global scale. ICHOM brings together physician leaders, representatives of leading disease registries, and patient advocacy groups to define standardized outcome sets and risk adjustment by medical condition, covering
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the conditions that account for a large and growing share of the disease burden. In order to foster value-based competition, these standard outcome sets are made available for public use. The more health care systems adopt these measures as the definition for success in health care delivery, and the more providers are compared on these outcomes relative to charges, the more we can unleash the power of value-based competition to transform health care. Market-based as well as state-run systems alike will benefit.
Der korrespondierende Autor erkla¨rt, dass kein Interessenkonflikt vorliegt. Literatur siehe Literatur zum Schwerpunktthema. http://journals.elsevier.de/pubhef/literatur http://dx.doi.org/10.1016/j.phf.2013.09.008 Dr. Jens Deerberg-Wittram Institute for Strategy and Competitiveness Harvard Business School Ludcke House Soldiers Field Road Boston, Massachusetts 02136 [email protected]
Public Health Forum 21 Heft 81 (2013) http://journals.elsevier.de/pubhef
Summary The starting point to any real progress in health care is comprehensive measurement of outcomes. Outcomes should be measured for each medical condition. Rather than focusing on single procedures or specialties, outcome sets must cover any treatment option and the full care cycle, from diagnostics to treatment to rehabilitation covering both inpatient and outpatient care. Risk adjustment for individual patient circumstances is also essential to compare outcomes across patients and across time.
Einleitung Wirklicher Fortschritt im Gesundheitswesen beginnt mit der umfangreichen Messung medizinischer Ergebnisqualita¨t. Medizinische Ergebnisqualita¨t wird auf Ebene eines konkreten Krankheitsbildes gemessen. Statt sich auf bestimmte Prozeduren oder Fachgebiete einzuschra¨nken, mu¨ssen medizinische Ergebnisdaten fu¨r jede Behandlungsmo¨glichkeit eines Krankheitsbildes und u¨ber die gesamte Versorgungskette hinweg erhoben werden, von der Diagnostik u¨ber die Behandlung und Rehabilitation, im ambulanten und stationa¨ren Bereich. Dabei ist die Risikoadjustierung fu¨r bestimmte Patientenmerkmale unumga¨nglich, um Ergebnisqualita¨t von Patienten und u¨ber den Zeitverlauf vergleichen zu ko¨nnen.
Keywords: Value = Patientennutzen, Outcomes = Medizinische Ergebnisse
Literaturverzeichnis Porter M, Guth C. Redefining German Health Care. Springer; 2012
Donabedian A. Evaluating the quality of medical care. Milbank Memorial Fund Quarterly 1966;44:166–206. Porter M. What is Value in Health Care? N Engl J Med 2010;363(26):2477–81.
Scriba P, Nimptsch U, Mansky T. The German Experience with Indicator-based Quality Improvement. In: Lobdell K, Stamou S, editors. Quality improvement. Nova Science Publishers; 2013
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Value-based Competition: the Role of Outcome Measurement Jens Deerberg-Wittram, Clemens Guth and Michael E. Porter Health care systems around the globe are organized in a wide variety of different ways. From single-payer public system like the NHS in the UK, to ‘‘market-based’’ systems with competing insurance options and competing for-profit and non-profit providers in Germany, we can find every shade of gray in the spectrum between ‘‘public’’ and ‘‘private,’’ and between ‘‘state-run’’ and ‘‘market.’’ Despite intense political discussions about the ‘‘right system,’’ however, no system has won out. Quite on the contrary, all health care systems, no matter how they are organized, are facing rising costs and significant variation in quality. Countries with national health services often have lower costs but serious concerns about waiting lists and limiting services, while more market-based systems provide ample services but at high costs. What do all these systems have in common? The sad truth is that no system is centered on outcomes, the results of care that really matter to patients. Twenty-five years of healthcare reforms in Germany have never systematically tackled this deficit (Porter, 2012). Without the ability to measure and compare outcomes, the essential information necessary to improve health care systems is lacking – no matter how they are organized. As Donabedian stated in his landmark article on quality of medical care, ‘‘Outcomes, by and large, remain the ultimate validation of the effectiveness and quality of medical care.’’ Donabedian, 1966) Unfortunately, outcomes are largely unknown to
most providers, patients and health plans. In normal markets, competition drives quality improvement and cost reduction. Strong competitors who best meet customer needs at the lowest price prosper, pushing rivals to either improve or leave the market. Competition is not about ‘‘beating’’ other producers but about serving customer needs uniquely well. In health care, the equivalent of ‘‘customer needs’’ is value, defined as the patient outcomes versus the costs involved in care (Porter, 2010). The only solution to the problem of health care is to dramatically improve value. Without improving value, there is no solution but rather cost shifting to patients, restriction of services, and declining incomes of health care professionals. The starting point to any real progress in health care is comprehensive measurement of outcomes. Outcomes should be measured for each medical condition. Rather than focusing on single procedures or specialties, outcome sets must cover the full care cycle, from diagnosis, to treatment, to rehabilitation covering both inpatient and outpatient care. Risk adjustment for individual patient circumstances is also needed to compare outcomes across patients and across time. Clinical indicators and process metrics, which are the overwhelming focus of measurement today, are useful but not what ultimately matters. For example, in prostate cancer treatment, physicians around the world are regularly measuring the patient’s PSA level to assess the presence of the
disease. Similarly, they document process metrics such as the number of biopsies performed for diagnosis or the length of stay in the hospital. Although these measures are important, they are not outcomes that matter to patients. Patients with prostate cancer are interested in treatment results like survival, surgical complications, incontinence, and erectile dysfunction, as well as anxiety levels and overall quality of life. These outcomes define the true success of medical care from a patient’s perspective. Given that outcomes are what matters to patients, the importance of standardized outcomes measurement and reporting is self-evident. Standardized measures and transparent reporting allow for benchmarking, best practice sharing, and improvement. In the absence of standardized outcome measures, current reimbursement models are based primarily on input parameters, such as the volume of discrete services and the complexity of procedures. Fortunately, a growing number of providers and quality measurement initiatives are demonstrating that measuring and reporting meaningful outcomes is driving rapid learning and improvement – and, ultimately, decreasing cost and increasing quality. In Germany, there has been limited outcome measurement in the past, but some innovated outcome measurement efforts have been established but have yet to spread widely (Scriba, Nimptsch, Mansky, 2013). To help accelerate this process, we, together with The Boston Consulting Group and The Karolinska Institute in Stockholm, founded the International
12.e1
Public Health Forum 21 Heft 81 (2013) http://journals.elsevier.de/pubhef
Consortium for Health Outcomes Measurement (ICHOM) in 2012. ICHOM (http://www.ichom.org) is an independent not-for profit organization that aims to unite disparate outcome measurement efforts across conditions and countries, and accelerate the rollout of comprehensive outcomes measurement on a global scale. ICHOM brings together physician leaders, representatives of leading disease registries, and patient advocacy groups to define standardized outcome sets and risk adjustment by medical condition, covering
12.e2
the conditions that account for a large and growing share of the disease burden. In order to foster value-based competition, these standard outcome sets are made available for public use. The more health care systems adopt these measures as the definition for success in health care delivery, and the more providers are compared on these outcomes relative to charges, the more we can unleash the power of value-based competition to transform health care. Market-based as well as state-run systems alike will benefit.
Der korrespondierende Autor erkla¨rt, dass kein Interessenkonflikt vorliegt. Literatur siehe Literatur zum Schwerpunktthema. http://journals.elsevier.de/pubhef/literatur http://dx.doi.org/10.1016/j.phf.2013.09.008 Dr. Jens Deerberg-Wittram Institute for Strategy and Competitiveness Harvard Business School Ludcke House Soldiers Field Road Boston, Massachusetts 02136 [email protected]
Public Health Forum 21 Heft 81 (2013) http://journals.elsevier.de/pubhef
Summary The starting point to any real progress in health care is comprehensive measurement of outcomes. Outcomes should be measured for each medical condition. Rather than focusing on single procedures or specialties, outcome sets must cover any treatment option and the full care cycle, from diagnostics to treatment to rehabilitation covering both inpatient and outpatient care. Risk adjustment for individual patient circumstances is also essential to compare outcomes across patients and across time.
Einleitung Wirklicher Fortschritt im Gesundheitswesen beginnt mit der umfangreichen Messung medizinischer Ergebnisqualita¨t. Medizinische Ergebnisqualita¨t wird auf Ebene eines konkreten Krankheitsbildes gemessen. Statt sich auf bestimmte Prozeduren oder Fachgebiete einzuschra¨nken, mu¨ssen medizinische Ergebnisdaten fu¨r jede Behandlungsmo¨glichkeit eines Krankheitsbildes und u¨ber die gesamte Versorgungskette hinweg erhoben werden, von der Diagnostik u¨ber die Behandlung und Rehabilitation, im ambulanten und stationa¨ren Bereich. Dabei ist die Risikoadjustierung fu¨r bestimmte Patientenmerkmale unumga¨nglich, um Ergebnisqualita¨t von Patienten und u¨ber den Zeitverlauf vergleichen zu ko¨nnen.
Keywords: Value = Patientennutzen, Outcomes = Medizinische Ergebnisse
Literaturverzeichnis Porter M, Guth C. Redefining German Health Care. Springer; 2012
Donabedian A. Evaluating the quality of medical care. Milbank Memorial Fund Quarterly 1966;44:166–206. Porter M. What is Value in Health Care? N Engl J Med 2010;363(26):2477–81.
Scriba P, Nimptsch U, Mansky T. The German Experience with Indicator-based Quality Improvement. In: Lobdell K, Stamou S, editors. Quality improvement. Nova Science Publishers; 2013
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