Watching from England, one of the most remarkable and well-documented developments in US health care of recent years has been the rapid adoption of a value-based approach to health care and the creation of hundreds of accountable care organizations (ACOs).
By contrast, developments with value-based and ACO-like care in the English National Health Service (NHS) are less prevalent and much less well documented. Nevertheless, significant lessons are beginning to emerge from the NHS, some of which may have relevance internationally.
For many years in England, hospitals have been rewarded for the volume of work they do using a nationally mandated Diagnosis-Related Group (DRG)-like system, in which prices are set annually by government agencies. There is growing acknowledgement that this payment mechanism creates a fundamental misalignment of financial incentives and system goals, which contributes significantly to many of the NHS's problems, including:
- an over-reliance on hospitals and high-cost interventional care;
- waste and inefficiency;
- fragmented, poorly coordinated care;
- care that is not patient-centered;
- insufficient attention paid to anticipatory and preventive care; and,
- activity-driven cost inflation.
In response, some brave leaders in local health economies have begun to experiment with changing the way they pay for care. The word "brave" is apposite because the NHS, despite rhetoric to the contrary, is often very unforgiving of local leaders whose innovations are unsuccessful.
A New Payment Mechanism
The first attempts at incentive change were relatively small scale. In 2011, payers in Milton Keynes, an English town of about 250,000 people, sought to improve substance misuse and sexual health services. They devised and developed a new form of contract to align financial incentives with system goals.
The key elements of the new payment mechanism were that the contracts:
- were multi-year as opposed to annual;
- were based on capitation payments rather than fee for service; and,
- included outcome indicators that attracted annual additional payments of up to 20 percent for improved performance. Significantly the incentivized outcomes were identified through dialogue with people who used services.
These capitated outcome-based and incentivized contracts (also known as COBIC) quickly resulted in better coordinated services, delivered at lower cost, and produced better outcomes.
Since 2011, this initiative has been built upon and extended elsewhere. The next wave of outcomes-based COBICs addressed problems with services for single groups of disorders, most commonly musculoskeletal services (Sussex, Bexley, Bedfordshire, and Sheffield). As in the US, although not every initiative was successful, it was found that these contracts could quickly lead to better coordinated, more patient-centered care, with improved patient choice, good patient experience, and reduced costs.
The concept is now being extended still further in both geography and ambition, with multi-year capitated outcomes-based COBICs being prepared and implemented for mental health care (Oxfordshire, Bedfordshire), older people's services (Oxfordshire, Croydon), and for people with long-term conditions (Staffordshire). One area, Somerset, has even begun to develop long-term per capita funded and outcomes-incentivized contracts for all the health care it buys for its whole population.
The changes being catalyzed by these innovative approaches to payment are profound. They operationalize a value-based approach to health care, in which responsibility for population health is shared with providers. By placing more emphasis on achieving patient-defined outcomes, they make the whole system more patient-centric, shifting power from the providers to the people that use the system in terms not just of where and when services are provided, but what treatments and care an individual chooses to have in the first place.
This also means changes to the data and information requirements needed to operate and monitor the health care system. Finally, as population responsibilities are passed to clinicians, we are starting to see changes to the professional identities and roles of clinicians.
Lessons Learned
Based on our experience of working with most of these pioneers across England, we see some lessons beginning to emerge.
The introduction of multi-year capitated outcome-incentivized contracts is a practical approach to operationalizing a value-based approach to care that can catalyze major change across a health economy at relative pace and scale (compared with the pace and scale of attempts at widespread transformation in the NHS's recent past).
When the process for identifying the outcomes to incentivize has included dialogue with local people and service users, the outcomes people describe are defined in much more social and functional terms than those usually articulated by clinicians. They tend to be based around:
- patient experience (which includes access to care),
- patient empowerment (a sense of being informed and in control),
- goal attainment (in terms of goals defined by the individual, not the clinician or the health care system),
- clinical and functional outcomes, and
- population-level outcomes (health inequalities and mortality rates).
This approach therefore extends and broadens the outcome dimensions included in Professor Michael Porter's hierarchy. Porter describes a three-tier hierarchy for outcomes in which the most important first tier outcomes relate to survival and preserving health, and the middle tier relates to the process of recovery such as time taken to return to normal and the disutility of care. His final tier is the sustainability of health, relating to recurrence of disease and the occurrence of care-induced illnesses. The COBIC approach includes alongside the physiological metrics more subjective person-centric indicators.
Most of the outcomes that people say matter most to them cannot be delivered by any one part of the health care system acting alone. Incentivizing these outcomes stimulates new alliances between providers that often include voluntary services and social care. Once formed, these provider alliances quickly develop new innovative models of care which place greater emphasis on person-centered care, with better support for self-care and care provided closer to where people live. Primary care needs to be an important part of these provider alliances.
The multi-year capitated elements of the new payment mechanisms give providers responsibility for population health and create a financial incentive for investing in prevention. Few places in England have yet been able to introduce population health management at the scale seen in the US in programs run by organizations like Geisinger Health System or Kaiser Permanente, not least because of weaknesses in NHS data collection and information management systems.
Making incentives more patient focused has increased the collection and use of Patient Reported Outcome Measures in clinical practice and prompted the introduction of scaled systematic approaches to shared decision making. In some places such approaches have become routine and are used at scale. For example, in Bedfordshire, pre- and post-operative health-related quality of life scores are routinely shared with patients during consultations about hip and knee pain before referral to specialist care so the person can balance for themselves the risks and potential benefits of surgery. Early results show that the impact is exactly that reported in systematic reviews of shared decision-making — a 20 percent reduction in demand for surgery in less than a year.
From Change To Success
Change as profound and complex as this is not achieved overnight, nor will innovators get everything right the first time. Changing incentives with COBIC contracts makes change easier but still not easy. Success requires the exercise of skills, capabilities, and behaviors currently sparse in the NHS. Few NHS organizations can manage population health, support shared decision-making, or coordinate care across traditional boundaries.
Economic expertise to accurately model the impact of services on outcomes is rare in the NHS, and information technology (IT) capabilities leave much to be desired. These are all becoming mission-critical issues. An unresolved question is where and how the NHS will get timely access to these skills and capabilities at scale.
But in almost every case—even when it's not been completely successful as in Cambridgeshire and Peterborough's work on older people's care—these new payment mechanisms, that incentivize broad outcomes derived in dialogue, quickly stimulate the creation of new, more patient-focused models of care and new provider alliances that push beyond traditional boundaries of health care. This becomes a practical way of starting to address the problems caused by an overly narrow focus on professionally defined medical goals which, particularly at the end of people's lives, damage not only the effectiveness of health care but also its humanity and affordability, as so articulately described by Atul Gawande.
We think the adoption of the combination of Porter's principles and the broadening out to more holistic definitions of outcomes has started a quiet revolution and a practical response to health care challenges shared on both sides of the Atlantic.
from Health Affairs Blog http://ift.tt/21v8pZc
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