The transformational shift from volume to value will result in a new health care environment. In this blog post, three surgeons — Steve Schutzer, Tony DiGioia, and Kevin Bozic — describe the changes they expect to see.
After decades of fee-for-service payment mechanisms, the Affordable Care Act (ACA) of 2010 has accelerated the time frame for health care providers to participate in new care delivery platforms and payment models such as bundling and reference-based pricing (RBP). The transformational shift from volume to value is well underway and gaining steam. The result? Seismic changes in the way we practice our art, as well as the way health care business is conducted, are forthcoming. These changes are being driven by multiple, but related, efforts that coalesce with one overarching goal: to create sustainable health care value for our patients.
This movement will result in a new health care environment. The changes we should expect include:
A demand by consumers for credible, transparent data on outcomes and costs related to the care they seek;
A rapid rise in publicly reported data on cost and process measure outcomes associated with pressure on health care entities to self-report;
Demand by all purchasers of health care products for pricing transparency;
A rise of “consumerism” in health care, whereby patients are becoming price sensitive and will therefore demand data on actual true cost of delivering their services;
Increasing involvement of the large self-funded employers and their consortiums in health care reform initiatives, using leverage and patient preference to influence this process; and finally,
New payment methodologies such as episode-based payments, bundled payments, and reference-based pricing that will replace traditional fee-for-service models.
Thriving in this new environment, which links payments to outcomes, is risky without knowing the true cost of care delivery and outcomes achieved at the level of the clinical condition and over the full cycle of care. What we need is a methodology for measuring true costs and patient-centered outcomes, and a way to link clinical and financial performance as we move forward.
Over the past year, our care teams worked with 29 other organizations in IHI’s Joint Replacement Learning Community to understand our costs, improve outcomes, and redesign care delivery. In preparing for the changes ahead, we learned together how to push forward in improving value. The program, and our colleagues that joined us, provided us with the tools we needed to measure both costs and outcomes, as well as identify opportunities for improvement.
Our collective experience in the Joint Replacement Learning Community solidified the need for every health care organization to imbed the value equation (health care value = patient-reported outcomes / cost of delivering those outcomes) in their institutional culture. Any services deemed not to be consistent with added health care value must be stripped from the condition-specific care plan to reduce costs. Patient-reported outcomes, related to their particular medical condition, must be measured, analyzed, and employed to improve the patient’s experience.
To survive and grow profitably, health care entities will need to redesign their delivery processes. This entails both an overhaul of clinical programs, as well as perhaps for the first time taking stock of the outcomes they achieve and the actual cost of the services they provide.