How does healthcare need to change to achieve better outcomes

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Improving value can only happen when providers align the focus of their clinical teams and their market strategy on achieving excellent outcomes, and in turn invest the resources to measure and report them. In , when Prof. See this Harvard Business School case for more.

Clinical training is inherently siloed, but value-based health care requires integration around the patient. This is not easy for specialists who are not used to working closely together, or worse, even dislike each other. But defining and measuring outcomes can bridge the disciplinary divide as teams must necessarily collaborate to achieve better results. Data that exposes poor performance in particular can be a strong motivator to join together to improve.

The conclusion was disheartening — on most procedure types, TCH significantly underperformed. Citing its outcomes performance as a mandate for change, Fraser set about a complete restructuring of the team: pediatric cardiac surgeons and cardiologists started collaborating more closely, dedicated pediatric cardiac surgery operating rooms and ICU space was created, and a systematic outcomes tracking program was put in place.

The final result? Today, TCH enjoys a nationally recognized program with mortality rates significantly below the national average. For more, see this HBS case. Outcomes motivate clinicians to compare their performance and learn from each other. Comparison of outcomes is essential to disseminate innovations from one individual or team to another.

Unfortunately, most quality measurement has focused narrowly on complying with evidenced-based processes. Although such compliance is important, it has limited impact on outcomes often less than a quarter of variation in outcomes is estimated to be due to compliance with these processes.

A more comprehensive focus on processes and outcomes and their interaction always shows opportunities to improve, from increasing survival rates and long-term functioning to reducing complications and speeding recovery. Comparing these types of outcomes in a transparent and collaborative way can be a powerful motivator for improvement. This data-driven dialogue across the network dramatically speeds the identification and adoption of best practices.

For example, in the network discovered high rates of complications in bariatric surgery patients who had deep venous thrombosis DVT filters placed during their operation. Nationally, the FDA communication warning against use of such filters lagged by more than two years, and is still being implemented. Alongside influencing outcomes, clinical decisions also drive the cost of care: choosing which drugs to prescribe, which procedures to perform, and whether to admit patients to acute care facilities have significant cost impact.

The trouble is, clinicians generally overestimate the benefit of their care, which means that many decisions lead to high costs with little impact on outcomes. Getting costs under control requires engaging clinicians with data that can help them understand which activities and services can be reduced or eliminated without compromising outcomes.

At the Massachusetts General Hospital MGH , amidst an aggressive shift from volume-based fee-for-service contracts to risk-based population contracts which put providers at risk for the cost of care , the Division of Population Health Management team knew it needed a better process for determining who was best served by resource-intensive procedures, particularly those such as gastric bypass, diagnostic coronary catheterization, and lumbar fusion whose efficacy was uncertain.

Criteria from the literature regarding the appropriateness of various procedures were integrated into the electronic medical record, and patients received videos and handouts explaining the risk and benefits of the various treatment options, as well as personalized consent forms that adapted those risk and benefits for their specific circumstances.

The entire system was informed and refined by ongoing tracking of outcomes, as reported by both patient and clinicians. One of the local private payors was so happy with the impact that it agreed to waive the requirement for prior authorizations on all procedures for which this system was in place — a triple win for patient, provider, and payor. As payment transitions from a fee-for-service world to a value-based world, good outcomes are shifting from a lofty idea into a business imperative.

The Clinton administration of the s alarmed many with a bold universal healthcare plan. People are not convinced that the president of the United States should be in charge of health care, with issues such as international security and the economy at the forefront of his or her mind.

Yet it helps to illuminate a principle of public policy. In our previous grand steps to introduce large-scale government solutions—in the s with the creation of Social Security and in with the development of Medicare and Medicaid—there was agreement about the problem.

During those periods there was also agreement about the solution; there was no serious private-sector or state alternative.

There was debate about the delivery system, which is why Medicare is delivered by private insurers, but there was an agreement that the population to be served—the old and the sick—could not be served equitably by the private sector or other levels of government. Similarly, a private-sector alternative to Social Security did not exist either. To make a grand social policy change such as providing universal health care, there must be consensus on both the problem and the solution.

The mistake we made was that we assumed both existed, but alas, in actuality, they did not. We had agreement only that there was a problem.

This is similar to the challenge that faces the country today. In the end, to bring research to bear on the way in which medicine is practiced in this country and the way in which we organize health care, the most self-interested people in our country must provide the leadership. In any field, defining and measuring value is fundamental to progress. In most industries, participants contract freely and prices are set in open, competitive markets.

The objective function is clear—making a profit. In healthcare delivery, however, the objective function is not so clear. Participant choices are constrained, prices are set or heavily influenced by government, and, in many cases, a public service mission and non-profit entities coexist with the profit motive. Moreover, the profit motive is itself compromised in healthcare delivery by the current U. Prevailing reimbursement creates a disconnect between profits for system actors and value for patients because providers are rewarded for services, not patient results.

System actors are also sometimes rewarded for shifting costs to others. Not surprisingly, there is confusion and lack of consensus about the appropriate objective function in health care. Many in the field talk about access as the objective. Others point to equity, community service, or better population health. Still others define the goal as patient satisfaction, quality, safety, or care that is consistent with medical evidence.

Nearly all actors identify cost containment and achieving an operating surplus as among their principal aims. In addition to the existence of multiple goals, different actors in the system define the objective function differently, a sign that the participants may be working at cross-purposes. I believe that many of the difficulties in improving healthcare delivery stem from confusion and disagreement about defining, measuring, and rewarding value.

The primary objective for healthcare delivery should be value for patients, measured by patient health outcomes per dollar expended to achieve those outcomes. Value is the only goal that unites the interests of all the parties in the healthcare system. Improving value is also fundamental to achieving all the other goals, such as expanding access and improving equity.

Value in any field must be defined around the customer, not the supplier. Value must also be measured by outputs, not inputs. Hence it is patient health results that matter, not the volume of services delivered.

But all outcomes are achieved at some cost. Therefore, the proper objective is the value of health care delivery, or the patient health outcomes achieved relative to the total cost inputs of attaining those outcomes. Efficiency, as well as other objectives such as safety, are subsumed by value.

Health outcomes refer to the set of objective outcomes, not just patient perceptions of outcomes which can be biased toward the service experience. There is not just one outcome of care for any health condition, but multiple outcomes that jointly constitute value.

Patient circumstances and preferences will affect the weighting of these outcomes to some degree, a subject discussed later. The costs of achieving outcomes refers to the total costs involved in care, not just the costs borne by any one actor or for any particular treatment or episode. The mismeasurement of costs works against true value improvement, and is endemic in healthcare delivery in every country, especially in the United States, because of the way that services are organized and paid for.

Value for patients improves when equivalent outcomes are achieved at a lower cost, or better outcomes are achieved at comparable or lower cost. Yet outcomes and costs are not independent. A powerful lever to reduce costs is to improve outcomes, such as through early detection that limits the complexity of care, less invasive treatment, faster recovery, or less need for subsequent care. The power of quality improvement to drive down costs is greater in health care than any other industry I have encountered, because of the basic truth that better health is inherently less expensive than poor health.

Access to health care is a basic goal of any healthcare system, but access per se does not constitute value. Access provides the opportunity for value to be created by the delivery system, but is not in and of itself the goal.

If outcomes were universally measured, it would quickly become clear that the value of care is highly variable, even for patients with access. Improving value holds the key to expanding access to care in a way that is affordable. Equity in health care for all individuals and groups is another desirable goal, but again equity itself is not value. Equitable care that is poorly delivered leads to a system in which everyone has equal access to suboptimal outcomes.

Discussions of equity also tend to focus on inputs, not outputs. The best way to improve the equity of care, and perhaps the only way, is to measure value, ensure transparency of value, and reward value.

Only in this way will the value delivered for every patient count, including individuals who are currently poorly served. Value in healthcare delivery is largely unmeasured, a striking fact about healthcare delivery not only in the United States but around the world. Failure to measure value is the most serious self-inflicted wound of the medical profession and the broader provider community, because it has slowed innovation and brought about micromanagement of physician practice.

Measuring value depends first and foremost on properly measuring health outcomes. Patients have some initial or preexisting conditions. Services are delivered through processes of care delivery that reflect medical knowledge and are affected by patient initial conditions. The care delivery process should strongly influence the outcomes achieved.

Measuring value in health care. Some of the current challenges in measuring value are highlighted by Figure First, there is a great deal of confusion about the distinction between processes and outcomes.

Many participants in the healthcare system, and most quality measurement systems in health care, confound processes and outcomes or treat processes and structures as if they were outcomes. While structural factors, protocols, guidelines, and practice standards are partial predictors of outcomes, they are not outcomes themselves Brook et al. Adherence to these types of measures is an imperfect indicator of outcomes. Process guidelines are invariably incomplete and omit important influences on the value of care Krumholz et al.

Practice standards often fail to adapt care sufficiently to individual patient circumstances—standardized processes do not guarantee standardized outcomes. Experience also shows that providers following identical guidelines achieve different results. Process guidelines also fail to cover the full cycle of care that actually determines value. Thus, process measurement alone will not assure that results will improve for all patients.

Moreover, process guidelines can slow innovation, because agreeing on guidelines is inevitably slow and invariably political. Medicine is constantly being refined, and guidelines can lag best practice or, conversely, lead to undue attention to processes that have yet to be definitively proven with a sufficient body of evidence.

For example, best practice in treatment of post-menopausal women with estrogen has changed several times in the last decade alone, as new evidence has become available about the risks and benefits of the treatment for particular patient subpopulations. Process control alone, then, is a risky and ultimately flawed approach to improving outcomes and increasing patient value.

In any complex system, attempting to control behavior without measuring results will tend to limit progress to incremental improvement. Without a feedback loop involving the actual outcomes achieved, providers are denied the information they need to learn and to improve their care delivery methods.

Process control is a tempting shortcut because processes are easier to measure and less controversial than outcomes, but there is no substitute for measuring both Birkmeyer et al. Another important distinction is that between health indicators and levels outcomes as shown in Figure Indicators, such as hemoglobin A 1c used in diabetes care as biological markers of blood sugar control, should be highly correlated with actual outcomes such as acute episodes and complications de Lissovoy et al.

However, such biological indicators are still predictors of results, not results themselves. To improve value in healthcare delivery, it will also be necessary to measure true outcomes and not rely solely or even predominantly on such indicators. Figure also includes patient compliance as an essential factor contributing to health outcomes. There is compelling evidence that patient compliance with recommended preventive measures, preparations for treatment e.

Yet there is a glaring absence of systematic measurement of patient compliance, a major gap in measurement. Focusing on adherence to provider practice guidelines without measuring compliance merely obscures the link between process and outcomes.

Failing to measure compliance also absolves providers and health plans of responsibility to treat compliance as integral to care delivery. There has been growing attention to patient satisfaction in health care, but sometimes in a way that obscures true value measurement. Figure separates two roles of patient satisfaction in measurement: patient satisfaction with the process of care including hospitality, amenities, etc.

There has been a tendency to rely too heavily on patient surveys in quality improvement programs, and surveys have focused mostly on the service experience. These surveys rarely cover patient compliance, a major gap. Many surveys also fail to address what is most important for value measurement, the actual health outcomes as perceived by the patient. While the service experience can be important to good outcomes, it is the outcomes themselves that constitute value.

In the absence of true results measurement, patients will tend to default to friendliness, convenience, and amenities as proxies for excellence in healthcare delivery. Providers cannot rely too heavily on service satisfaction surveys as measures of outcomes, or the value delivered. An important corollary to defining the value proposition in health care is the definition of quality. In health care, the whole notion of quality has become a source of confusion and sometimes a distraction from genuine value improvement.

Quality ought to refer to patient outcomes. Quality relative to cost determines value in health care, as it does in any field. In health care, however, most quality initiatives are focused on processes of care and compliance with evidence-based guidelines. For example, of the 71 Healthcare Effectiveness Data and Information Set measures, the most widely used quality measurement system, only six are outcomes or health indicators and the balance are process measures.

Of the comprehensive collection of quality measures found in the National Quality Measures Clearinghouse, the overwhelming majority are not outcomes AHRQ, The quality movement in health care is on a dangerous path by trying to measure and control physician practice directly, rather than measuring outcomes. While outcome measurement is difficult, process measurement is not a substitute. There has also been a tendency to equate safety and quality.

The proliferation of safety initiatives is laudable, and has produced genuine improvements for patients. However, safety is just one aspect of quality and not necessarily the most important aspect.

To say it another way, doing no harm is important, but improving the degree of recovery or the sustainability of recovery are just as important, if not more so.

As I will discuss below, too much focus on safety instead of overall outcomes and value may lead to incremental process improvements affecting safety, rather than rethinking the overall delivery of care to improve total outcomes including safety. To understand value in any field, the unit for which value is measured should conform to the unit in which value is actually created.

The unit of value creation should define organizational boundaries in care delivery, which is a central tenet of organizational theory. In health care, however, both measurement and organizational structure are misaligned with value creation.

In fact, one of the principal reasons why value is mismeasured in health care, or not measured at all, stems from faulty organizational structures for healthcare delivery. A medical condition is an interrelated set of patient medical circumstances best addressed in an integrated way.

Care for a medical condition, such as breast cancer, diabetes, inflammatory bowel disease, asthma, or congestive heart failure, will normally require the involvement of multiple specialties.

The definition of a medical condition includes the most common co-occurrences , or diseases that occur together. Caring for the medical condition of diabetes, for example, needs to integrate the care for hypertension and vascular disease. The unit of value creation in health care delivery—care for a medical condition encompassing the cycle of care—collides with the way delivery is currently organized in the United States and in virtually every other country.

Health care today is organized by facility e. This means that both outcomes and processes tend to be mismeasured. Also, faulty organization of care creates many hurdles to actually achieving excellent outcomes. Measurement today usually focuses on the individual providers or specialists, despite the fact that the intervention of one provider is not the sole or even the primary determinant of the overall outcomes. Measurement focuses on the discrete intervention, despite the fact that the intervention is one of many that determine outcomes.

Measurement covers short episodes, which tells an incomplete story in understanding the overall outcome. Outcomes from a few discrete interventions, or in a few medical conditions, tend to be used as proxies for the overall outcomes of the provider. Current organizational structure in healthcare delivery makes it difficult to measure value correctly. Indeed, this is one of the most important reasons why it is poorly measured, or not measured at all.

Providers, particularly, have a tendency to measure only what is under their direct control in a particular intervention, even if this is not what actually determines value. What is measured is what is easy to measure, rather than what matters for outcomes.

What is measured is also what is billed, even though the unit of reimbursement is misaligned with overall value. Gathering long-term, longitudinal data on outcomes is surely challenging, but the cost of doing so is unnecessarily high because of the current organizational structures and practice patterns.

If practice structures were realigned to cover the care cycle, the cost of long-term outcome measurement would fall dramatically. Moreover, the assumption of joint responsibility for outcomes would be natural.

All these observations also apply to measuring costs. To understand the true costs of heath care delivery, one must measure the costs of all the interventions and services involved in determining the outcome.

Today each unit or department is seen as a separate revenue or cost center; no one measures the cost of the entire care cycle. Entities such as rehabilitation centers and counseling units are all but ignored in cost analysis. Many costs, such as those borne by the patient or within primary care practices, are not counted in measuring procedure-centric care. Treating drugs as a separate cost, for example, only obscures the overall value of care. All costs must be included to measure the total cost of delivering outcomes, and overall value.

While the unit of value creation is the medical condition over the cycle of care, a given patient may have multiple medical conditions. This often occurs, for example, in older patients who might have congestive heart failure and breast cancer and osteoarthritis of the hip.

Such patients are best cared for by integrated practices for each condition that coordinate with each other. Value is best measured for each medical condition, with the presence of other medical conditions a risk factor in each one. The alternative, defining a different measure of value for each patient, defeats the whole purpose of measurement.

Outcomes are the core of value in healthcare delivery. There is growing attention to measuring outcomes, which is a most welcome development. However, the practice of outcome measurement suffers from a number of problems.

One of these is a tendency to look for a single ideal outcome measure for a given medical condition. However, there is never one outcome measure in any field or endeavor, and health care is no exception.

For every medical condition, there are multiple outcomes that collectively define patient value. One commonly measured outcome is survival or death. This is just one outcome, albeit an important one. Outcomes related to safety, such as the incidence of medical errors along with their consequences, are an additional type of outcome measure. To think holistically about outcome measurement for a medical condition, outcomes can be can be conceptualized in a hierarchy, with the most fundamental outcomes, survival and patient health, achieved at the top, and other outcomes arrayed in a natural progression, such as those related to the nature and speed of the recovery process and those related to the sustainability of the results.

Although there is not time to explore the details in this discussion, it should be possible to characterize the set of outcomes for a medical condition in a fashion that lends to objective and quantitative outcome measurement. For many patients, trade-offs may exist among individual outcomes. For example, a more complete recovery could require treatment with a greater risk of care-induced illness. Or, more complete recovery could require treatment that is more discomforting. Where there are trade-offs, individual patients may differ in the weight they place on different levels of the hierarchy, and on specific measures.

The discomfort of treatment willingly endured will be affected, for example, by the degree and sustainability of health achieved. For example, cosmetic considerations may weigh heavily against risk of recurrence, such as in the choice of the amount of the breast resected for breast cancer patients, or long-term sustainability of recovery may matter less to older patients. A complete understanding of all aspects of such an outcome hierarchy matters more, not less, when different groups of patients value individual outcomes differently.