A new focus for health care reform — realigning competition around patient value

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Dr. Porter and Elizabeth Olmsted Teisberg, Ph.D., M.Engr., M.S., of the University of Virginia, Charlottesville, examined the status of health care today, and propose a strategy for reform.

The authors write that the health sector today has the wrong kind of competition. Each player in the system gains not by increasing value for the patient but by taking value away from someone else. This does not improve health outcomes per dollar spent-in fact, it often does the opposite. Health care competition does not have to be zero sum. The authors make the positive case for realigning competition around patient value, and they call on physicians to lead this change and return the practice of medicine to its appropriate focus: enabling health and effective care.

The authors' proposal highlights three principles that will put competition on the right track: 1) the goal is value for patients, (2) medical practice should be organized around medical conditions and integrated care cycles, and (3) results-risk-adjusted outcomes and costs for each medical condition-must be measured.

The Goal Is Value for Patients

"Improving value for patients is clearly the only valid goal for ethical reasons. It is also the only goal that aligns the interests of patients, physicians, health insurance plans, employers, and government. If physicians improve value for patients, they will be able to credibly engage Medicare and health plans in new contracting and reimbursement practices that reward such value."

Organize Around Medical Conditions and Care Cycles

Dramatic improvements in value will require the restructuring of health care delivery, the authors argue. "Organizing care around medical conditions, rather than specialties or procedures, is key to improving value to patients. A medical condition is a set of interrelated patient medical circumstances that are best addressed in an integrated way. This encompasses conditions as physicians usually define them, such as diabetes, congestive heart failure, arthritis, or breast cancer. But this definition differs by including all needed specialties and the prevalent co-morbidities, such as diabetes combined with vascular problems or hypertension."

"For virtually every condition, the cycle of care begins with screening and prevention and extends all the way through preparation, treatment, recovery, ongoing monitoring, and active disease management in the case of chronic conditions. Multiple specialties, services and even entities are involved in the cycle of care. Value for patients comes from the overall effect of the entire sequence of activities, not from any individual service." The authors note that physicians are beginning to organize care around medical conditions and are forming institutes, centers, and other types of integrated structures that bring needed specialties and expertise together and encompass the care cycle.

"Better integration of treatment with prevention, rehabilitation, and disease management will reveal obvious ways to improve the overall outcomes and reduce costs. It will also point the way to how to change the broken reimbursement system."

Measuring Results

"There is simply no way to achieve large and sustained improvements in value for patient without measuring results: the set of risk-adjusted outcomes of care for each medical condition, together with the costs of achieving those outcomes. Processes of care, the focus of much of today's quality movement, are not results. Good outcome measures are vital feedback indicating what works and what does not. These measures enable professional insight and the development of expertise."

"Designing risk-adjusted outcomes measures is not easy, but their practicality has been convincingly demonstrated. In some very complex areas of care, such as intensive care, transplant surgery, cardiac surgery, and long-term care for cystic fibrosis, validated measures have been available for many years. Clinicians can and should develop meaningful measures," they write. "Results information reveals one of the most crucial insights about health care delivery: truly high-quality care is usually less costly. One of the most important reasons to measure results is that the best way to reduce costs is to improve outcomes."

How Value-Based Care Delivery Could Change Medicine

The authors write that implementing these reforms will create powerful ripple effects throughout the health care system, including more effective collaborations between physicians and care teams, greater patient involvement in their health care, fewer malpractice suits, more supportive health plans and government payers, new means for reimbursement, and higher performance levels by physicians and care teams and an improvement in overall value of patient care.

"Paying for care cycles and rewarding value is ultimately the only feasible way to change a reimbursement system that everyone knows to be broken. When value rules, the nation will finally get better outcomes for every dollar spent on care. Competition on value, then, must become the nation's health strategy. Improving health and health care value for patients is the only real solution. Value-based competition on results provides a path for reform that recognizes the role of health professionals at the heart of the system. In the economy at large, competition on value underlies the wealth of nations. It can transform the health of nations as well," the authors conclude.

JAMA and Archives Journals