A storyline about measuring healthcare value

April 2, 2018 / By Kristine Daynes

Perhaps it’s true that we tend to see what we expect to see. In my job, I work with healthcare quality measures. Given this bias, my scan of the media translates material as being about cost, quality, or efficiency. This past week is typical. In reading three unrelated articles, I connected them to a narrative about measuring healthcare value. Here is the story line:

Exposition: Maryland’s all-payer alternative payment model reduced Medicare spending for hospital care, a positive signal for advocates of value-based payment. The model avoided $586 million in expenditures, exceeding the five-year goal of $330 million. The reductions included cost avoidance from reducing potentially preventable conditions (PPCs) by 44 percent, far exceeding the original goal of 30 percent. The Maryland Health Services Cost Review Commission (HSCRC) hopes to expand the all-payer model to align hospitals, physicians and other providers under a similar alternative payment model focused on improving outcomes and reducing costs across the delivery system. 

Conflict and rising action: Providers of cancer care don’t agree that value-based payment programs have actually generated more value in oncology, according to an AJMC report of a panel discussion at the National Comprehensive Cancer Network annual conference. Panelists noted that better reporting is helping them to identify best practices and lower drug expenses. However, they are increasingly confronted by patients who cannot afford their drugs and want other treatment options, leading to concerns about suboptimal care and how value is judged within alternative payment models.

One panelist said that although payment models might intend to deliver value, they are generating cost savings for the payers of health care, not necessarily better outcomes and survival rates for oncology patients. Another panelist concluded, “Value means delivering better treatment. . . A lot of conversation this morning has been under the frame of value, but it’s really focused on cost.” Cost savings is not the same thing as value, especially in health care.

Climax: Hospitals and health systems invest tens of millions of dollars in enterprise data warehouses (EDW) and analytics platforms to measure, report and improve on quality and value. Presbyterian Health System, for example, invested three years building an EDW, then needed to figure out how to use the data effectively.

According to Soyal Momin, VP of data and analytics, “You need to build a great foundation so that your analytics programs are scalable and sustainable.” The foundation for an analytics program must be set with concrete goals focused on clinical and operational targets in addition to financial goals. Value measures must show the impact of different behaviors on clinical, operational and financial outcomes. Momin notes that many value-based care initiatives fail because there is no visibility into their financial opportunities, insufficient data to support coordinated clinical care and an inability to achieve scale across the delivery network.

Health systems like PHS are more likely to achieve success using outcomes measures such as avoidable complications, readmissions, patient safety and efficient use of imaging and ER services. These measures link utilization and clinical outcomes with cost, providing a basis for tracking performance.

Falling action and resolution: Maryland’s alternative payment program focuses on clinical and operational targets, such as PPCs, not financial savings alone. By 2015, patients in Maryland were 57 percent less likely to develop a complication from hospital care than in 2010, a clear improvement in healthcare quality linked to a reduction in avoidable care and the associated costs. The impact can be quantified because Maryland HSCRC chose measures that:

  • Define all possible instances comprehensively
  • Indicate the clinical condition under which each instance can be prevented or improved
  • Risk adjust in a clinically credible and understandable way
  • Include a state norm for comparison and to compute expected values

Maryland HSCRC chose to use the 3M PPC methodology over other possible quality measures. Why? According to 3M’s Rich Averill: “If you look at all the quality measures out there, for many of them you have trouble measuring the financial impact. . . If you are going to put a big investment in trying to get at quality and trying to control volume, you want a return on that investment. So, we focus on the places where we see that institutions can get the biggest return.” In other words, Maryland HSCRC didn’t choose cost metrics over clinical quality measures. It chose clinical quality measures that could be linked to efficiency and financial impact.

Kristine Daynes is client engagement leader, Performance Matrix, at 3M Health Information Systems.

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