Healthcare is a challenging field, and working routines are long gone. In the world, every health system struggles with increasing costs and inconsistent performance, despite the tireless efforts of professional, highly trained health professionals. Healthcare administrators and policymakers have attempted a myriad of incremental solutions—tackling fraudulent practices, eliminating mistakes, applying guidelines to practice, improving the quality of care for patients, making them more efficient “consumers,” and implementing electronic medical records—but they haven’t been able to make a significant effect.
An Essentially Novel Approach
The main aim is to maximize the value of sufferers’ care, that is, to get the simplest effects with the lowest costs. It is time to move far away from a demand-driven health gadget that is organized around the work of physicians and circulate closer to an organized system that is targeted at the wishes of sufferers. It is time to shift our awareness far from the price and volume of clinical visits, hospitalizations, and tactics, in addition to assessments, to the outcomes completed. Also, we need to replace our broken system, in which every provider in the local area offers an array of options and a framework in which services for specific health conditions are provided by health delivery centres in those locations that can provide premium healthcare. The process of transforming the system isn’t one step, but rather an entire plan. It is referred to as “the value agenda.” It requires a change in the way healthcare delivery is planned, tracked, monitored, and paid for. In 2006, Michael Porter and Elizabeth Teisberg introduced values in their work, Redefining the Health Care System. Since then, based on our studies and the efforts of tens of thousands of health professionals and academic researchers from all over the world, methods to implement the value agenda have been created, and their use by health care, the health system, and other entities has been rapidly expanding. The transformation to value-based treatment is in full swing. Certain organizations are in the phase of pilots or initiatives within individual practices. Some organizations, including the Cleveland Clinic and Germany’s Schon Klinik, are undertaking major changes on a large scale that involve multiple parts of the value plan. It has led to dramatic improvements in the quality of care and efficiency and a growth in market percentage. There’s no question about the best way to boost the effectiveness of healthcare. But what organizations are leading by example, and at what speed will others be able to follow? The challenges of transforming into an enterprise that values its employees must not be overlooked, due to the deeply rooted habits and interests of the past years. The change must be initiated from the inside. Only providers and physicians can implement an interdependent set of steps that will increase value, as value is ultimately defined by how medical practice is conducted. However, every stakeholder within the healthcare system can contribute. Health plans, patients, employers, and providers will all be able to accelerate the process, and everyone will greatly benefit from taking part in it.
Specifying the Goal
The first step towards fixing any issue is to identify the correct purpose. Reforms in healthcare have been hampered due to a lack of clarity regarding the objective or due to the pursuit of an unsuitable objective. Specific goals like expanding access to health care or reducing the cost of care, as well as growing profits, have resulted in distraction. The accessibility of poor healthcare isn’t the goal, nor is reducing costs while sacrificing the quality of care. The current emphasis on increasing profits isn’t aligned with the interests of patients since profits are derived from increasing the quantity of services provided that do not produce good results. When it comes to health, the primary goal of providers as well as any other stakeholder is to increase quality for patients. Value refers to the results achieved in health care that are important for patients and the expense of the process of achieving these results. Enhancing value means either improvement in one or more of the outcomes with no increase in costs, decreasing costs, or not harming outcomes either. If you fail to enhance value, it means the same thing: failure. Accepting value as a goal both at the executive level and on the board is vital, as the value-based agenda is a major departure from the previous. Healthcare providers are not opposed to increasing outcomes, their main concentration has been on increasing numbers and maintaining margins. Even with noble goals, however, the actual task of enhancing value has not been done. The old delivery models and payment systems, which were largely unchanged over many years, have only exacerbated the situation and resulted in an unstable system and deficient costs. The situation is evolving. In the face of pressure to limit expenses, payers are cutting reimbursements and then changing from fee-for-service to performance-based payment. In the U.S., an increasing number of patients are protected by Medicare as well as Medicaid, which pays only a small fraction of the private-plan level. This is causing more private hospitals to be a part of the health care system and more doctors to quit private practice and become employed by hospitals as salaried workers. (For further information, refer to the article “Why Change Now?” Since providers will be operating under various payment structures with varying risks for an extended period, the change will not be linear or quick. In the present environment, companies require a plan that goes beyond the traditional approach to cost discounts and adapts to the new models of fees. If healthcare carriers can enhance the quality of care for sufferers, they’ll be able to keep or boom their market function. If they increase the effectiveness of providing top-quality healthcare, they will be able to enter into any contract negotiations in a positive position. The providers who increase value are the ones that will be most active in the market. Companies that do not improve value, however impressive and powerful they appear now, are bound to face increasing competition. Health insurers who do not embrace and promote the value agenda—by not adjusting, for instance, by focusing on high-value providers, will be unable to retain customers from those who can do so.
The Value Transformation Strategy
The plan of action for transitioning towards a highly valued healthcare system comprises six parts. They’re interdependent and strengthening, as we’ll observe, change can be the most straightforward and efficient if they’re implemented by working together. (See the diagram “The Value Agenda.” The present structure of healthcare delivery has lasted for years because it collected mutually reinforcing components such as specialty-based organization with private-practice doctors who are independent, measurement of “quality” defined as process conformity and cost accounting that is not driven through costs, but rather by fees, payment for services through specialty, with a plethora of cross-subsidies, delivery systems that have duplicate service lines with little integration, fragmentation of the patient groups to the extent that many practitioners do not serve large numbers of patients who have an illness as well as siloed IT systems that are based around the medical field, and other. The interlocking framework can explain why the present structure has been so reticent to change and why the incremental changes have not had much impact, as well as why advancing simultaneously in multiple areas of the strategy agenda is extremely beneficial. The elements of the strategic plan aren’t theoretical or revolutionary. Each is being utilized with varying levels of success in different institutions, ranging from top hospitals to academic centers and hospital safety nets for communities. However, no organization is yet implementing an entire value-based agenda for the entire spectrum of its practice. Each organization is capable of enhancing its value to patients and always will. The core element of the value revolution is the change in how healthcare professionals are structured to provide services. One of the most fundamental principles for organizing every business or organization is to focus on customers and their needs. For health care, this is a change from the current separate organization of specialties and discrete services to a system that is organized based on the individual’s medical needs. It is referred to as the integrated practice unit. In IPUs, a team of medical and nonclinical professionals provides all the necessary care for the patient’s health condition. IPUs address not just a condition but also concomitant conditions, complications, and other conditions that are typically associated with it. For instance, eyes and kidney disorders in diabetic patients and palliative care in patients suffering from metastatic cancer. IPUs don’t just treat patients but are also responsible for taking care of patients’ families and involving them in their care, for instance through education and counseling to encourage adherence to the treatment protocols and preventive measures as well as assisting with any necessary behavioural modifications such as quitting smoking or losing weight. The rapid improvement of any area involves measuring outcomes, which is a well-known principle for management. Teams can improve and perform better by observing the progress they make over time and then measuring their results against those of other teams within and outside the organization. A rigorous assessment of the value (outcomes and expenses) may be an essential step towards improving the quality of health care. Anytime we can see systematic evaluation of health outcomes, no matter the location—the outcomes improve. However, the truth is that the majority of healthcare practitioners (and insurance companies) do not track results or expenses per medical condition of individual patients. In particular, even though there are many hospitals with “back pain centers,” very few can tell you about the results of their patients (such as when they can get back to work) or the exact treatment options for these patients throughout the entire treatment cycle. This surprising fact goes in the direction of explaining the reasons why decades of health reforms have not altered the direction of the value of the healthcare system.
The Cost of Healthcare Can be Measured
In a profession where costs are a major issue, the dearth of precise cost data for healthcare is shocking. Very few healthcare center professionals are aware of how much each element of treatment costs, much less how the costs are related to the outcome that is achieved. Within the vast majority of organizations, there are virtually no precise details on the price of all the phases of treatment for patients suffering from a specific medical condition. The majority of cost-accounting programs are departmental, which is not patient-centered, and are designed to bill for services that are reimbursed under fee-for-service contracts. In a time where the cost of services is constantly increasing, this is logical. The current systems work for general department budgeting; however, they only provide flimsy and inaccurate estimates of the actual expenses for a particular patient and condition. Cost allocations, for instance, are typically based on the cost of services and not the actual cost. Healthcare professionals are under pressure to cut costs and to report on outcomes. The existing system is completely ineffective. It should be obvious that organizations that advance quickly in implementing the value agenda are likely to gain enormous benefits, even if changes in regulations are not as swift. If IPUs’ performance improves, so does their standing and, consequently, the number of patients they see. By using the right tools to control and lower costs, they can maintain the viability of their business even as reimbursements slow down and ultimately fall. Companies that focus on volume result in a cycle of virtue, through which teams with greater knowledge and experience will increase value quicker and attract larger volumes. Top IPUs will become sought-after for their preferred partners, expanding their reach beyond the region and even further. It will be a struggle for IPUs that have physicians who are not employed when their lack of ability to cooperate hinders the process of improving their value. Private-practice hospitals must learn how to work as a unit to be relevant. Monitoring outcomes could be a first step towards focusing everyone’s attention on the things that matter most. All stakeholder groups in healthcare must play a vital role. (See the section on “Next Steps: Other Stakeholder Roles.”) However, the providers have to be at the forefront. Their boards and management teams need to have the vision and courage to adhere to the value agenda, and they must be determined to move past the inevitable opposition and challenges that will ensue. Clinicians need to prioritize patient requirements and the value of their patients over their desire to preserve their autonomy and traditional practice routines.
