Transforming towards VBHC and improving patient outcomes
Christina Åkerman, MD, PhD, EMBAAffiliate Faculty at Dell Medical School, University of Texas at Austin
Transforming towards VBHC and improving patient outcomes1 April 2021 | 10min
The key to implementing value-based health care (VBHC) is to have one common goal: to deliver the health outcomes that matter most to patients
Partnership and collaboration of key stakeholders across every level of the organization, including patients, are essential to define unmet needs, reduce gaps and spending waste, and attain more integrative care
Outcome-based healthcare means a move towards preventive health and rethinking budget spend and resource allocation, which will positively affect the bottom line
More than a decade ago, Michael Porter and Elizabeth Teisberg introduced the Value-Based Health Care (VBHC) concept, which involves orienting the care practice towards those activities that generate the best health results or patient outcomes.1
In Part 1 of this interview, we sat down with VBHC expert, Christina Åkerman, to hear her views on what this patient outcome approach could mean to healthcare systems and how it could transform healthcare as we know it.
The key to implementing VBHC
HT: One of the things that you often talk about is that the key to implementing VBHC lies in collaboration and partnerships. What is it specifically that is the key there?
Christina Åkerman: This points at the importance of one common goal for all involved, which is the health outcomes that matter most to patients. People seek solutions that improve their health outcomes, so we should therefore always ask ourselves, “How well do we know the outcomes that matter most to the patients we intend to serve? Do we know what matters most to them?”
Studies show issues of highly variable outcomes and the harm that could have been prevented, as well as inappropriate care and unnecessary spending, on a global scale.
So, the problem in healthcare delivery as I see it, has deep common root causes in the failure to measure health outcomes – not knowing what matters most, and not being able to compare between organizations for sharing and learning.
Once these health outcomes are defined and set as the common goal for all stakeholders, then collaboration and partnership will become natural, and make high value care possible.
Rethinking the bottom line through collaboration and partnership
HT: Who in your opinion needs to partner and at what stage along the VBHC journey? And who should be responsible for creating these partnering opportunities?
Christina Åkerman: Starting with your last piece there, anyone coming across an unmet need or a wasteful spending should be responsible for creating these partnering opportunities.
The current pandemic has highlighted health disparities, as well as the importance of staying in good health and making sure care is of high value for the resilience of our health systems.
Understanding these unmet needs and making it possible to compare outcomes are essential to disseminate best practices from one individual or team, to another.
Such a systematic measurement of standard sets of outcomes by institutions around the world will help create learning communities, bring providers together in the adoption of a common scorecard to develop improvement cycles and training programs, and also create a better understanding of processes that will help achieve these outcomes.
Having a more comprehensive focus on outcomes and processes and their interaction is an important piece because they show opportunities to improve and this direct dialogue between outcome and process data is essential to challenge and change our current practices with a focus on, how can we improve?
“Once we work in this direction, the wasteful spending on health and the complexity and disease progression that we see that drive a lot of need for more care, will be reduced.”
Furthermore, with better understanding of needs, and with measuring and improving patient health outcomes, we will not only move in the direction of reducing the wasteful spending but also closing the gaps of the unmet needs.
So, to me, focusing on outcomes is the true north to restore healthcare to its purpose, which is health because we don’t need more care, we need better health. That’s a very important piece to remember.
The next important step is to prevent conditions from appearing in the first place. Shifting the focus from, as someone said, ” Wait to break, fix and get paid,” to predict, prevent and improve patient health outcomes.
Rethinking healthcare budget spending & resource allocation
Christina Åkerman: As we know today, the resources we spend on disease prevention and on health promotion is only around 3% of the total health budgets in the OECD (Organization for Economic Cooperation and Development countries).2 While we spend about 75% on multiple chronic conditions.
“By reducing the waste in the system, as well as reducing the need for more care, more resources will be available for prevention, which will then generate a very good return.”
When I thought about this, I was thinking about the importance of employers here because employers could play a very important role in making this happen: to motivate their employees to maintain and improve their health and wellness that either then prevents or detects early on the serious illnesses that impact both health and budgets.
We talk a lot about clinical pathways in our health systems, but why don’t we start thinking about creating life pathways instead? Leading to a much more integrated way of working, all the way from birth to death, along this line, and an integrated care where primary care will be the natural axis of this.
So, we start following outcomes already in early age, over adulthood, and into when we become elderly. And add on, of course, outcomes for conditions that we attract over our lifetime.
I’m thinking more along the lines of life pathways, to really make this distinction between, we don’t need more care but better health.
The clinical pathway versus the life pathway
HT: This concept of life pathways and a more integrated approach to care is wonderful. If we only spend 3% of the budget on prevention, how do we mobilize and transition towards this approach to care opposed to the more clinical pathways?
Christina Åkerman: We need to accept that wasteful spending exists and is happening every day. We need to look out for the unmet needs and the gaps while ensuring that developments within the health sector actively involve the people they are intended to serve. This is a cornerstone in achieving high value care in health.
When we talk about digitalization, for example, and how fast we have been able to move into e-health with digital innovations that have been available, but never used before the pandemic until we were forced to do so. Some things went very fast and that’s amazing to see how many good things we have learned during this pandemic. The important thing to keep in mind is: when the pandemic is, hopefully, no longer an immediate threat, what should we keep of this, so we do not just go back to where we were before.
It is equally important that we also consider what is actually providing better outcomes? What is actually filling unmet needs and existing gaps, so we do not digitalize for the sake of digitalizing and cement in low value care.
We shouldn’t get into that trap of “Yes, this is the way we have done it. These are our pathways. Let’s digitalize them because we can.”
We need to look into what serves us well, what serves each individual and patient well, and that’s what I meant by saying that ensuring that developments within the health sector actively involve the people they are intended to serve, which is so important.
It is worrying that there is still work to do to realize this wasteful spending and talk about the existing gaps. We are still more focused on what we do, than what we achieve, which could also be the risk with digitalization.
The VBHC mindset shift towards a common goal
HT: For this transformation towards patient centric care to happen, how do you propose leaders, stakeholders, and other parties deal with the resistance and make it more of a collective effort? For example, if you’re a clinical lab and you deal with test results, you can get those out quickly. How do you get beyond that frame of mind: it’s not just about delivering quick results, but also about getting to the final treatment efficacy that is important to a patient and getting away from this mindset of, “I do what I can do, but that’s it”?
Christina Åkerman: What you’re describing is the silo mentality where we only look to what we are set to deliver and what we are experts in doing. This brings us back to the discussion we had here about the one common goal, which is the health outcomes that matter most to patients.
When you put a focus on that one common goal, what matters most to patients, then you also need to align the incentives – the ways of rewarding, both internally and externally, making the reward system focus on achieving the common goal.
If the goal of a patient where a lab result is important, is that the patient should be able to leave the hospital and live independently after the episodic condition or have good capabilities of living with a chronic condition, then the goal should be clear for everyone in that healthcare system. You also need to make sure that the payment is based on that outcome, also for the laboratory in your example. How can we all work in an integrated way, where we feel a responsibility together for the end result, the health outcomes that matter most to individuals?
Outcome-based incentives & reward system in VBHC
Christina Åkerman: I am certain that once we start also rewarding along those lines and find and test our ways in this direction that you will see new interactions starting to take place because we will then not focus on our own silo, we will start working together in a different way. We will work with others and discuss with others, what is important with my lab result to be delivered, in order to make sure that this individual can live his or her life in as good health as possible?
So, this is why I always say, start with outcomes and then move to make sure you also reward the outcomes. This is what will influence your culture and will definitely influence how you see your part in the bigger picture, and you will start finding new ways of working in this direction.
Risk mitigation for an outcome-based reward system for VBHC
HT: There are some expressed concerns about the potential consequences of implementing rewards based on outcomes, in that, more straight forward patient cases may be selected and more complex ones avoided in order to ensure better outcomes. Do you have any concerns around potential unforeseen consequences such as this or is this even a valid concern?
Christina Åkerman: Yes, I think it’s a very important question to ask so we don’t mislead in this direction, which is why it is also important to start with deciding which cases you will focus on when moving in this direction. Start with an initial focus and then expand and use a proper risk adjustment to not penalize taking care of more complex patients.
There are examples of moving towards bundled payments. Having the responsibility for the full cycle of care of patients in certain segments or specific conditions, the start is often to focus on patients in a certain risk category to eliminate any cherry picking. So, start with a certain group and see how it works and then add more complexity to it. Initially, the more complex patients stay in the original reward system to make sure they are taken care of and added into the new model over time.
Once you bring all patients in, I see a need to use proper risk adjustment. If you have a population which you serve, which is a healthy population, of course your outcomes will look good, compared to an area where there might be poorer health in general, and you might have worse outcomes.
Equalizing the score when comparing outcomes
Christina Åkerman: The way of comparing could be like a handicap in golf – you “compete” on more equal terms.
It’s also important not to just stop there. We need to also understand why certain individuals are at higher risk and ask, “What can be done now, when we know that we have good risk-adjusted outcomes? What can be done to reduce high risk and restore healthcare to its purpose, which is health as discussed before?” That’s the next level.
So, start with a dedicated focus on certain cases, and then when you add complexity, make sure you risk adjust but rather than accepting the risk adjustment as the status quo, start looking into why do I have to risk adjust? Why are certain patients at higher risk, and what can be done to actually reduce this high risk and restore healthcare to its purpose.
This is the stepwise approach I suggest to test.
Christina Åkerman, MD, PhD, EMBA is Affiliate Faculty at the Dell Medical School at the University of Texas at Austin, Senior Institute Associate, ISC, Harvard Business School, and on the Steering Committee of the Coalition for Health, Ethics and Society at the European Policy Center. Until August 2018, she was the President of the International Consortium for Health Outcomes Measurement. She has also served as Director General for the Medical Products Agency in Sweden, been a Member of the Board of the European Medicines Agency and President of AstraZeneca Philippines.
- Barrubés et al. (2013). Article available from: https://www.antares-consulting.com/en_US/main/detallepublicacion/Publicacion/151/apartado/H/idUnidad/3 [Accessed January 2021]
- Gmeinder and Mueller (2017). OECD Health Working Papers 101, OECD Publishing, Paris, https://doi.org/10.1787/f19e803c-en [Accessed March 2021]