1. Healthcare 2015: Win-win or lose-lose
Healthcare 2015: Win-win or lose-lose? A portrait and a path to successful transformation
What is the purpose of the report? It is intended to describe what is needed and how to address the challenges we have today. We attempt to be futuristic / big picture enough in describing a desired state that looks beyond the myriad problems created by today’s broken healthcare systems and get to the “root cause.” To make adequate progress toward this desired state, we need to start the transformation now because it will be a long, difficult journey. The question is not “Will our healthcare system look different in 2015?” but instead “What can we do together to shape a sustainable, affordable, value-based healthcare system?” We’ve defined some elements that we think are important and the roles that care delivery organizations can play without being so presumptive or naïve as to think that we can develop generic strategy that would work for all CDOs or jurisdictions in the US or globally.
In other words, this report does not to paint a wonderful vision of healthcare in 2015, ignoring current realities.
3 stages and levels of thinking about the healthcare system in any country. This report addresses the first two.
We have to agree that the current state is not sustainable. Stated differently, status quo is not an option and everybody’s cheese gets moved. The original HC 2015 addressed this point and is summarized in this report.
What is the desired future state or vision and what needs to be done at the “big picture” level? Hopefully, we can agree on the general direction and principles described in this more detailed view of care delivery. It is consistent in approach and key messages the original “Healthcare 2015: Win-win or lose-lose?” and with “Healthcare 2015 and US Health Plans” because payers and providers must work together to address common problems.
What can a specific organization or jurisdiction do? How do we get there? We are not so presumptive / naïve as to think we can develop generic strategy that would work for all CDOs or jurisdictions in the US or globally.
What can we do by ourselves?
What must be done through collaboration with other providers, with health plans, with governments, with consumers, etc.?
Presented at Disease Management Colloquium
May 19, 2008
Jim Adams, IBM Center for Healthcare Management
IBM Confidential

2. Agenda Issue – The Case for Change Analysis – Emerging Challenges
Moving Forward
Conclusion
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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3. Issue
Despite having many fine care delivery organizations and caregivers, the US healthcare system is badly broken. Is it sustainable?
High, rapidly rising costs
$2.1 trillion (16% of GDP) was spent in 2006
$4.0 trillion (20% of GDP) will be spent in 2015
Highest per capita spend among OECD countries in 2005
46% more than Norway, which spends the third-most
2.3x the OECD average per capita spend
No link between higher costs and quality or safety
98,000 to 195,000 people killed per year by medical mistakes
57,000+ dying from inadequate care
2 million hospital-acquired infections with 90,000 dying per year
4-fold variation in costs with similar quality
Ranked 37th in overall health system performance by WHO
22nd in life expectancy, 28th in infant mortality and 30th in obesity among the 30 OECD countries
Access issues
47 million uninsured
15+ million under-insured, most who are working
The United States is the best – or worst – example of runaway healthcare expenditures.
On a per capita amount, for example, the United States spends the most of any country in the OECD (the OECD is made up 30 democratic and developed countries with a free market economy). In 2006, The US spent $7,026 per person. Note: this was the first year with Medicare prescription drug coverage.
The US healthcare industry is larger than the entire economies of all but 5 other countries (Japan, UK, France, Germany and China)
The US has obesity and heart disease rates for people over 50 that are almost double that of Europe (33.1% to 17.1% for obesity and 21.8% to 11.4% for heart disease) and a diabetes rate that is 50% higher in the US (16.4% to 10.9%). Source: Health Affairs Online, October, 2007
Despite these expenditures –
there is significant mortality from medical errors and inadequate care. Medical errors are in the top 10 leading killers
About 18,000 Americans die each year from treatable and preventable illnesses because they lack health insurance, federal estimates show.
Despite a nationwide push to improve care quality, less than one-third of patients with acute myocardial infarction (AMI) and pneumonia received all recommended ED-based treatments between 1998 and 2004—deficiencies that were associated with 22,000 preventable deaths annually, according to a study in October 2007’s Academic Emergency Medicine. A lack of provider awareness of the recommended therapies, provider disagreement with the protocols, or pressures stemming from ED overcrowding could be impeding AMI and pneumonia quality gains.
Wide variations in care. The point on the slide if from a HealthGrades / CHCF study of Medicare data comparing LA and Sacramento. LA was 4x as costly with no difference in quality. Other examples… Dartmouth University researchers found that beneficiaries in Rhode Island underwent knee replacement surgeries at a rate of five per 1,000 patients, compared with 10 per 1,000 in Nebraska. In addition, they discovered that female beneficiaries diagnosed with breast cancer were nearly seven times more likely to undergo a mastectomy if they resided in South Dakota rather than in Vermont. Meanwhile, the researchers found that beneficiaries in Oregon spent an average of eight days in the hospital and received care from 14 different physicians during their last six months of life, while beneficiaries in New York were hospitalized for an average of 35 days and saw 35 physicians; those disparities also contributed to vastly different end-of-life care costs.
Other key points
David Brailer estimates that 1/3 of our spending and capacity are unnecessary and 2:1 variations in true production costs of hospitals
McKinsey estimates that we spent $477 billion more than expected in 2003 (estimated spending according to wealth).
$224 billion was for hospital care (2.6x OECD avg for cost per day)
$57 billion more than expected for drugs. Drug prices are 2.3x but utilization was lower than OECD avgs
$20 billion for malpractice. This doesn’t include the costs for defensive medicine
$98 billion for administration and insurance. That doesn’t include the provider side.
Families USA broke down the 47 million uninsured figure and calculated that 89.6 million people under age percent -- went without health insurance at some point during
Before I move on, I recognize that the title of this slide makes a very strong statement
We do contend that the US healthcare system has been broken for a long time.
You may ask…”So what is different now?” “Why do we think it needs to be "fixed" now…when we never have had to fix it in the past?”
It's the healthcare drivers of change
How much out of control the healthcare system is now that we as a society can no longer idly stand by
Sources: World Health Organization The world health report 2000: health systems: improving performance. Geneva: World Health Organization.; Borger, Christine, Sheila Smith, Christopher Truffer, et al Health spending projections through 2015: changes on the horizon. Health Affairs (22 February): W61-W73, (accessed 1 June 2006).;
If the US spent at the OECD per capita average, we would spend over $1 trillion less per year.
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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4. Analysis
The growth in healthcare spending, combined with healthcare drivers will continue to have major impacts
Healthcare 2015 Drivers
Impacts
Globalization
Continued shift from
employer-based insurance
Consumerism
Increasing focus on value
Under drivers:
Note that we may see a continued backlash to globalization. Thailand is violating drug patents. China has produced tainted drugs (e.g. Heparin).
We generalized “aging and overweight populations” to “Changing demographics and lifestyles”
Diseases that are more expensive to treat – this is really a proliferation of chronic diseases driven primarily by medical successes. Diseases that used to kill people have now been eradicated or can be treated, sometimes converting them into chronic diseases. Also, people are living longer and developing more expensive-to-treat acute or chronic diseases (congestive heart failure, coronary artery disease, cancer or Alzheimer's).
The continued growth in spending, in combination of the aforementioned drivers will lead to three changes
The continuing search for value from an increasingly costly healthcare system
The increase in consumer responsibility
This affects the health plans’ relationship with their members
New healthcare requirements, delivery models, capabilities, and reimbursement
This affects who is providing the care
Examples – New requirements (e.g., prevention, counseling, chronic care) / delivery models (e.g. retail clinics) / capabilities (e.g., personalized medicine) / reimbursement approaches (e.g., P4P)
In sum, the world is healthcare system is changing and these changes are directly impacting care delivery organizations
Changing
demographics
and lifestyles
Increase in consumer
responsibility
Diseases that are expensive to treat
New approaches to
promoting health
and delivering care
New technologies and treatments
Growing resource challenges
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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5. A value-based health care system
Analysis » Increasing focus on value
A proactive, value-based health system should help move people from right to left – and keep them there
Health care spending
Health Status
Healthy/
Low Risk
At-Risk
High
Risk
Early
Symptoms
Active
Disease
We need a system that focuses more on personalized prevention, prediction, early detection / treatment, EBM, care coordination, case management, disease management combined with secondary prevention, etc.
A more proactive, value-focused healthcare system will create shortages and surpluses of different types of care givers. For example, in a system that focuses on personalized prevention, prediction, early detection / treatment, EBM, Care coordination,, etc. we will need more primary care providers and fewer specialists than in a system geared to treating active disease. Even with realigned incentives, addressing these shortages will require long lead times.
The healthcare system in the US is not selling what IBM (and other major employers) want to buy. It’s hard to buy services to help keep a pre-diabetic from becoming a diabetic. It’s also hard to buy the services needed to help keep a diabetic’s condition from deteriorating (e.g., regular monitoring of A1C, cholesterol and blood pressure; regular eye and foot exams, etc). It’s easy to buy a world-class foot amputation or kidney transplant in today’s system. But that is not what we want to buy. A world-class foot amputation may be evidence based with good outcomes but it still not as high-value as keeping the pre-diabetic or diabetic from ever needing a foot amputation.
20% of people
generate
80% of costs
A value-based health care system
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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6. Analysis » Increasing focus on value
Defining value for a healthcare system means balancing emphasis and decisions across multiple, possibly redefined dimensions
Value Dimensions of healthcare systems Example
How will quality be defined?
Generally focuses on areas such as:
Evidence-based treatment approaches
Clinical & patient-reported outcomes
Also could and should include:
Prediction / Prevention / Early detection and intervention.
Time and resources expended for a correct diagnosis
Communication with patients (comprehension, compliance, recall)
Responsiveness to patient preferences and values
Ability of patient / consumer to manage medical conditions & health
Care coordination
Value in most industries includes both costs and quality. In healthcare, access is also a factor. But we need to think beyond those 3 dimensions to truly define value for a high-performance healthcare system.
Value in healthcare typically includes several dimensions
Costs / affordability
Clinical quality and safety, generally focusing on areas such as:
Evidence-based treatment approaches
Outcomes
Quality of service
Access and choice
A redefined perspective on value could include the following additional dimensions:
Additional quality dimensions. The Institute of Medicine in the USA has defined quality of care as ‘the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Potential dimensions that are not commonly measured include:
Prediction / Prevention / Early detection and intervention.
Correct diagnosis
Ability to communicate with patients – comprehension, compliance, recall
Responsiveness to patient preferences and values
Ability of consumer / patient to manage medical conditions and health. From the WHO Many hospital treatments do not cure but rather aim at improving the quality of life of patients. To maintain this quality, patients and relatives have to be educated and more intensively prepared for discharge. While the main responsibility of the hospital for patient care ends with the discharge procedure, it is important to stress that from a health system perspective a high number of readmissions or complications could be prevented, if patients were better prepared and subsequent providers of medical and social care were kept involved. Note: this relates to the next bullet point on care coordination.
Ability to coordinate care across venues, care providers, time, etc. for an episode of care or chronic medical condition
Overall health status of population (vs. money spent or resources utilized)
Equity
Ability to activate consumers to help manage their own health and healthcare.
Ability to continuously improve and innovate?
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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7. Relevant Patient Information Evidence-Based Increasing Value
Analysis » Increasing focus on value
The ability to deliver value improves with access to relevant patient information and knowledge of what works for that patient
Good
Personalized
(Based on people like me)
Experience-
based
The definition of “relevant patient information” will continue to change. Today is may be about current problem lists, allergies, meds, etc. In the future, it could include genetic information, lifestyle information, socio-economic factors, behavioral profiles, patient preferences, etc. to support prediction, prevention, early detection, shared decision-making, appropriate self-care, etc.
In Crossing the Quality Chasm (2001), the Institute of Medicine wrote, “Healthcare today harms too frequently and routinely fails to deliver its potential benefits. Americans should be able to count on receiving care that meets their needs and is based on the best scientific knowledge.”
Too much care today is “expert- or experience-based.” In other words, it’s based on individual clinician expertise and knowledge. Healthcare is too complex and changing too fast to base care only on what an individual clinician can learn and retain. In 1975 there were about 200 clinical trials published. By 2005, the number had grown to over 30,000. Add to that all the industry knowledge generated outside of clinical trials… In short, we have increasing complexity of intervention options combined with increasing insights into patient heterogeneity. It is no longer possible to practice medicine “with the knowledge in a doctor’s or clinician’s head.”
Medicine used to be simple, ineffective and relatively safe. Today it is complex, effective and potentially dangerous. Cyril Chantler (UK) The more we know about the patient and about the appropriate treatment for that patient, the less likely we will give care that is potentially dangerous.
The share of health expenses devoted to determining what works best is about one-tenth of one percent. From “The Learning Healthcare System” report from the IOM p. 2
The problem with evidence based on populations is called heterogeneity of treatment effects, which describes the variation in treatment results from the same treatment in different patients. For example, some may respond well to a drug, some may respond but poorly, some may have an adverse reaction and some may have no response.
From “The Learning Healthcare System” p.29… “Future clinical decision-making will need not just a PHR but a personal health knowledge base that is an intelligent integration of information about the individual with evidence related to that individual, presented in a way that lets the provider and the patient make the right decisions.”
Clinical Decision Support -- Providing clinicians, patients or individuals with knowledge and person-specific or population information, intelligently filtered or presented at appropriate times, to foster better health processes, better individual patient care, and better population health.” from AMIA Roadmap.
Patient information
Phenotypic, genotypic, patient preferences
Moves from sparse / fragmented to aggregated to integrated and harmonized
The value of clinical decision support increases with (from Geisinger slide)
Increasing complexity of the decision
number of input variables and “treatment” options
weakness of the evidence
Decreasing clinical knowledge of the decision maker
Increasing risk of the outcomes
for patient and/or provide
Increasing performance expectations
patient, payer, regulators, accreditation orgs, corporate
Access to
Relevant Patient Information
Evidence-Based
(Based on populations)
Increasing Value
Clinician consensus
Trial &
Error
One size fits all
Individual clinician knowledge & experience
Poor
Poor
Good
Access to Clinical Knowledge
(e.g. Diagnostic tools, Comparative Effectiveness)
More art than science
More science than art
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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8. Analysis » Increasing focus on value
We are currently experimenting in many areas to get to a more value-based healthcare environment
Benefits
Value-based insurance design
Tiered networks
Higher co-pays or co-insurance
Full coverage for preventive care
Reimbursement
Pay for Performance
Bundled payments, Care coordination
Pay for ePrescribing, eVisits
Gainsharing
Free” preventive care means that the health plan member doesn’t pay a co-pay or co-insurance. In other words, it’s free to them. That is frequently being combined with higher co-pays or co-insurance for other types of visits. Note: More frequently, high deductible plans are designed with “free” preventive or chronic care (secondary preventive care) so that diabetics are incented to get the care they need or to renew their prescriptions, for example.
P4P
Pay for use of EMR / EHR
Pay for data submissions
Pay for quality indicators
Pay for outcomes
Value-based insurance design – the insurer pays more (or the consumer co-pay is less) for care that we know (or at least think we know) works and vice versa
Tiered networks – consumers pay less for going to higher quality, less expensive providers (e.g., hospitals)
Bundled payments for a medical condition (e.g., across care settings such as a physician’s office, a hospital and a physical therapy site) or paying a fee (per member per year) for disease management or coordinating care – typically for chronic patients (e.g. diabetics). IBM GWBS thinks this should be about $50 PMPY. Allan Goroll takes the concept even further and suggests paying primary care doctors solely (or at least predominantly) with a risk-adjusted comprehensive payment per patient (e.g., $500 per year for low risk patients or $800 per year for medium risk patients). In other words, no more RBRVS / fee-for-service / volume-based reimbursement.
Pay for e-Prescribing – typically about $15 PMPY
Pay for prevention
Reward the consumer for healthy lifestyles / behaviors
Reward the provider for counseling / reinforcing / monitoring / etc. in addition to vaccinations and immunizations
Pay for more effective delivery models
E-consults for certain conditions
Recurring conditions. I have a UTI or sinus infection again…
For exchange of information where the physician doesn’t need to see the patient (e.g., to convey test results and recommend steps the patient needs to take)
Retail healthcare services
Telemedicine (e.g. remote diagnosis or remote monitoring rather than having to visit a physician’s office)
Centers of excellence and medical tourism
Consumer rewards or penalties for BMI, blood pressure, cholesterol, etc. readings. Also, governments have imposed “sin taxes” on cigarettes and alcohol.
Gainsharing – share some of the savings with the physician or patient / consumer
Other possible changes
Behind the counter drugs (statins, nasal steroids for allergies) for the uninsured so they don’t have to go to a doctor first
Consumer Incentives
Healthy lifestyles
Health Risk Assessments
Body Mass Index (BMI) or other indicators
Gainsharing
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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9. Improved access to relevant information
Analysis » Increase in consumer responsibility
In assuming more responsibility for their healthcare, consumers must make wiser health and financial decisions as patients and purchasers
Make better
health-related
choices
Receive
personalized
high-value
care
Improve
financial
planning
for
healthcare
Consumers must make better choices regarding lifestyles and behaviors. We can’t continue with the attitude of “let me live any lifestyle I want and then pay to fix me when my health fails.”
Consumers must be smart, comparison shoppers and then be able to navigate the system to receive high-value care, when needed.
Healthcare, financial planning and retirement planning are merging. Even for those approaching 65, healthcare costs will be a major factor. According to the Employee Benefits Research Institute (EBRI), only about one in four of all employees over the age of 55 have amassed even as much $250,000 or more for retirement and over 40% have $50,000 or less saved up. Fidelity Investments has stated that a 65 year old retiring in 2006 would need to have saved $200,000 just to pay for out of pocket costs not covered by Medicare, and even this assumes a significant drop in the rate of health care cost growth. EBRI has placed its own estimate of retiree out of pocket medical costs at nearly $600,000.
“Health Coach”
Prediction and risk
Healthy lifestyles
Behavioral change
Live with disease
“Value Coach”
Benefits selection
Provider selection
Comparative value
Coordinate care
“Wealth Coach”
Financial planning
Financing options
Insurance options
Improved access to relevant information
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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10. Activate lifestyle changes
Analysis » Increase in consumer responsibility
With help from CDOs and other entities, consumers can play a pivotal role in their health and healthcare
Activate lifestyle changes
With help from CDOs and other entities – IBM has a service call Consumer’s Medical Resource (tag line “Turning Patients Into Informed Consumers) to help employees and their eligible family members with almost 60 serious or chronic medical conditions including ADHD, asthma, cancer (19 types), COPD, diabetes, CAD, HIV, low back pain, MS, Parkinson’s, osteoarthritis and rheumatoid arthritis.
Involve in clinical decisions -- Doctors and other clinicians will increasingly be interpreters of information and facilitators of decisions rather than the decision-maker.
Engage in self-care – the primary care-giver for a patient with a chronic condition is frequently the patient and the family
Engage in self-care
Increasing empowerment and activation
Collaborate in clinical decisions
Increasing long-term impact on health
Source: Adapted from WHO Health Promoting Hospitals and Bridgepoint Health
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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11. Support groups –disease, advocacy
Analysis » Increase in consumer responsibility
Changing consumer behaviors requires different efforts from different entities, depending on the individual and the stage of change
Care delivery teams
Family and friends
Support groups –disease, advocacy
Coaches
Governments
Employers
Other payers
Media
The different efforts could encompass what is done, how it is done, and what is used (e.g. the information or evidence).
Prochaska's model stipulates six stages (from Wikipedia):
Pre-contemplation - lack of awareness that life can be improved by a change in behavior; the stage in which an individual has no intent to change behavior in the near future, usually measured as the next 6 months. Pre contemplators are often characterized as resistant or unmotivated and tend to avoid information, discussion, or thought with regard to the targeted health behavior
Contemplation - recognition of the problem, initial consideration of behavior change, and information gathering about possible solutions and actions; Individuals in this stage openly state their intent to change within the next 6 months. They are more aware of the benefits of changing, but remain keenly aware of the costs. Contemplators are often seen as ambivalent to change or as procrastinators
Preparation - introspection about the decision, reaffirmation of the need and desire to change behavior, and completion of final pre-action steps; the stage in which individuals intend to take steps to change, usually within the next month. Preparation is viewed as a transition rather than stable stage, with individuals intending progress to Action in the next 30 days
Action - implementation of the practices needed for successful behavior change (e.g. exercise class attendance); the stage in which an individual has made overt, perceptible lifestyle modifications for fewer than 6 months
Maintenance - consolidation of the behaviors initiated during the action stage; in this stage, people are working to prevent relapse and consolidate gains secured during Action. Maintainers are distinguishable from those in the Action stage in that they report the highest levels of self-efficacy and are less frequently tempted to relapse.
Termination - former problem behaviors are no longer perceived as desirable (e.g. skipping a run results in frustration rather than pleasure, other smokers disgust rather than tempt them to smoke).
Key question: How to sustain the change (e.g. continue a healthy lifestyle or maintain weight loss)?
80% of smokers not ready to quit, but designing interventions that took their stage of readiness into account resulted in 25% stopping for 18 months or longer
Explain the standard normal curves. Reduce variation, move in the right direction.
From the NIH on April 2, Scientists have identified a genetic variant that not only makes smokers more susceptible to nicotine addiction but also increases their risk of developing two smoking-related diseases, lung cancer and peripheral arterial disease.
Prochaska’s Stages of Change Model
Pre-contemplation
Contemplation
Preparation
Action
Maintenance
Source: IBM Global Business Services and IBM Institute for Business Value
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12. Analysis » Increase in consumer responsibility
Roles and responsibilities in helping consumers will need to be clearly defined to avoid confusing overlaps or gaps
Purchaser / Health Plan
Care Delivery Team (typically led by a doctor)
Hospitals
Other Entities or Associations That Could Provide Help
Personalized Health-related information for better choices
Healthy lifestyles education / coaching
Prediction of health problems / status
Behavioral change
Appropriately self-manage disease
Independent health infomediaries
Genetic testing labs
Support groups (e.g., ADA, AA)
Web 2.0 (social networks, blogs, wikis, etc.)
Family and friends
Receive personalized high-value health services
Benefits selection
Provider selection
Comparative effectiveness
Care coordination
Help with compliance
Support groups or associations (e.g., AARP, ADA)
Disease mgmt co.
Financial planning
Insurance options (e.g., LTC, disability)
Cost comparisons
“As is” vs. predictive models
Cost options with health planning
Financing plans for consumer portion of payment
Financial institutions
Independent financial planners
The purchaser could be an employer (e.g. in the US) or a government entity.
There is no best answer regarding who does what to help the consumer. It depends on a number of factors, such as the value dimensions given priority, the structure of the healthcare system and on the patient preferences.
The important thing is to support the consumers / patients when needed in as coordinated manner as effectively as possible.
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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13. Analysis » New approaches to promoting health and delivering care
Healthcare models and approaches will need to be coordinated or integrated to meet changing requirements
Wellness / prevention
Acute care
Chronic care
Wellness Centers
Retail Clinics
Complementary Medicine
Concierge Medicine
Medical Home
Telehealth, Telemedicine, e-Visits
Preventive medicine / wellness centers such as US Preventive Medicine’s “The Center for Preventive Medicine” are focusing on age and gender-specific preventive services and do not accept insurance. They say that they want to partner with hospitals. Their website states, “The Centers will be established on site at the nation’s top hospitals and will leverage the latest diagnostic technologies and proven preventive-interventional therapies.”
Retail Healthcare is the delivery of healthcare in retail settings to targeted patient populations, using information technology, and a mixture of varying levels of skilled clinicians to provide more affordable and convenient, quality healthcare. These clinics, as shown on the slide, can address about 8-10% of the PCP visits in a more convenient, lower-cost setting than an ED or a physician’s office. While not without their challenges (e.g., potential conflicts of interest to “cross-sell” to justify the floor space they occupy in the retail outlet, managing patient volumes in peak times, or maintaining continuity in care), these and other models will continue to test the status quo.
Medical tourism could be considered a “center of excellence” but it may be done more for lower costs than for quality.
Ambulatory ICUs are an example of the Medical Home, focused on the most costly chronic care patients.
Telehealth and telemedicine includes remote triage, diagnosis, consultations, procedures, or monitoring. Consumer health portals could be included here, too.
Medical Tourism
Ambulatory Surgery Centers
Centers of Excellence
Specialty Hospitals
Mobile and Home Care
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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14. Analysis » Global resource shortages
Longer term solutions to global resource shortages may be painful but must address both the supply and demand and be made in context of desired value dimensions for the healthcare system
Supply Optimizing limited resources
Demand Addressing the need for healthcare resources
Conduct population-based planning
Develop more of the desired types of clinicians and facilities
Base care decisions on evidence of clinical effectiveness when it exists and patient preference, not on availability of resources
Standardize and streamline, automate, delegate and coordinate to improve efficiencies
Extend capabilities and access through non-traditional delivery channels (e.g. e-visits or telemedicine)
Activate consumers
Focus on prediction; prevention; early detection and treatment; and care coordination
Make rational coverage decisions based on the total costs of prevention or care
Know what works and properly incent it
Recognize that some conditions can not be cured regardless of resources applied
Minimize medical errors and the practice of defensive medicine
Address the demand holistically by addressing other interdependent factors
What type of facilities will be needed in the future? How do we build flexible / reconfigurable facilities?
What is the most appropriate delivery channel for the services being provided?
Medical and information technologies
How do we more appropriately use clinicians?
Eliminate, automate and enrich, delegate, activate (see next slide)
TIGER initiative to train more clinicians??? Don Detmer
Decisions regarding how to address resource challenges must be made subsidiary to the broader decisions about value in the hc system or how care should be delivered. For example, if the country wants to focus on prevention, that would drive different resource types and numbers compared to a system that is intended to focus more on treating acute care.
Regarding making rational coverage decisions from Neil Stuart: The demand is now fundamentally different from what it was when publicly funded Medicare was introduced in the 1960s. There is a significant and growing part of the demand (or call it need) for health care that is about helping people get more enjoyment out of life. There is ample evidence of this in the growing consumer demand for sports medicine, cosmetic surgery, cosmetic dentistry, therapies to enhance sexual performance, and complementary therapies and alternative medicine – such as homeopathy, naturopathy, chiropractic medicine, laser therapy, massage therapy, herbal therapy and many others. We also see the increasing medicalization of responses to conditions associated with lifestyle, for example gastric bypass surgery to address obesity and pharmacology to ward off type II diabetes. We do not question the validity of these top-of-the-hierarchy needs. In fact, it is encouraging that more people are taking a proactive interest in optimizing their health. But we do ask whether in a time of increasing concern about the sustainability of health care spending, and particularly the taxpayer-funded portion of the spending pie, we should not be looking to focus public spending more on the lower and middle levels of the hierarchy? We also raise this question at a time when other basic human needs traditionally financed by government – notably social housing and welfare support – promise to be trampled to extinction by the health care elephant. Seen in this light, turning a blind eye to this phenomenon is to impose a heavy burden on the poorest echelons of society, who most depend on government for essential services beyond health. Jim’s note: we are trying to manage the demand with insufficient evidence regarding clinical utility and comparative effectiveness.
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
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15. Moving Forward
CDOs may choose among a variety of service delivery models, placing different emphasis on value dimensions such as access, clinical quality, service quality and costs
Alternative Service Delivery Models
Factors
Focus
Community Health Network
Optimize access across
a defined geography
Increasing Focus on Value
CDOs must also decide where in the continuum of care they fit – prediction, prevention, diagnosis, treatment, and rehabilitation, to end of life care and palliation, long-term care, what geography or catchment area, what patients / consumers, etc.
CDOs must meet the threshold or minimum requirements for all of these areas. The larger and more diversified the organization, the more likely that they can emphasize all of these dimensions beyond the threshold level. Even so, even large organizations will place different emphasis on different delivery models – and on how they implement the various delivery models.
Center of Excellence
Optimize safety and
clinical quality for
specific medical
conditions
Changing Citizen Responsibilities
Medical Concierge
Optimize the consumer
/ patient relationship
or experience
Changing Delivery Requirements
Price Leader
Optimize productivity
and workflows
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
IBM Confidential

16. Moving Forward
Although the value dimensions are not new, the focus or emphasis will continue to change
Historical
Current and Future
Community Health Network
Traditional, typically fragmented, physical locations and services
Integrated, non-traditional locations (e.g. home) and services (e.g. prevention / wellness / health promotion)
Electronic access and new channels (e.g. remote monitoring, telemedicine)
Center of Excellence
Focus on treating medical conditions at a specific care venue
Compete primarily on reputation
Focus on prediction, prevention, diagnosis, treatment and rehabilitation, and ongoing management of certain medical conditions
Compete on documented quality and safety
Change the definition of and raise the bar for quality through data-driven improvements and innovation
Medical Concierge
Plush, amenity-rich facilities
Friendly staff
Comforting, safe, preference-sensitive facilities for patient and families
Friendly, empowered (IT-enabled) staff
Convenient, electronic access (e.g. registration, e-visits)
Patient-friendly administrative processes
Price Leader
Streamlined processes
Services centralized for economies of scale
Focus on individual productivity
Evidence-based, standardized processes
Services performed at most cost-effective setting, fully exploiting IT-enabled capabilities
Focus team productivity and on activating patients
Community Health Network (Access)
Optimize physical locations, including home care
Optimize electronic access – remote patient monitoring, telemedicine
If you build a (small) specialty hospital in the suburbs for convenient access, it is a Community Health Network strategy. If you build a specialty hospital to attract patients from a large catchment area, it is a center of excellence strategy
Center of Excellence (Clinical Quality)
Focused on specific medical conditions end-to-end.
Recognize that the definition of clinical quality for a medical condition could expand or change (from evidence-based with good outcomes to prediction/prevention/accurate diagnosis/early detection and treatment/empowering patients to self-manage, etc.)
Culture of safety
Strong clinical decision support for diagnosis, treatment
Perhaps leaders in evaluating and appropriately incorporating new medical technologies
Strong focus on monitoring and improving / innovating for key quality metrics. These organizations compete on documented quality, not on perception or reputation.
Medical Concierge (Service Quality)
Comforting, patient-centric, preference-sensitive, facilities which may also be plush or amenity-rich (particularly for hospitals)
World-class, personalized service
Easy access / appointments
“No hassle” administrative processes
Friendly staff interactions
Outreach / outcalls
Cost Containment (Costs)
Streamlined end-to-end clinical and administrative processes
Strong use of automation to improve productivity (pharmacy robots, lab automation)
Strong focus on guidelines, acceptable practices to manage costs
Automate and delegate to less expensive resources
Clear scope of services (e.g., retail clinic)
Moving services to the most appropriate, cost-effective setting (home, retail)
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
IBM Confidential

17. Moving Forward
Health plans may choose one or several of these new roles but may struggle if they try to be all things to all people
Factors
Roles
Focus
Health / Wealth Service Advisor
Service excellence, consumer health and financial products and services
“Retailization” of healthcare
Health / Wealth Service Advisor – focused on both the health and financial implications for individual members / consumers.
for some segments of the market – pay for Health / Wealth advisor – whether or not to have HSA product, how to invest in which health benefit plan, how invest for future financial healthcare needs, long term care insurance, etc.
For other segments of the market more of an e-Schwab capability – make information available to me online, if I choose to buy a service – pay at the transaction level…
Health Services Optimizer – morphing of today’s medical mgt/chronic care management into full service function from wellness to chronic care; putting tools in the hands of consumers for those who want the tools but connecting the health continuum for others –”health Advocate” for the elderly, for the chronically ill – diabetic so they don’t have to manage their 8 different physicians. E.g., choosing the right hospitals and drs; comparative effectiveness, benefit and costs of alternative services for the same diagnosis (e.g. surgery, chiropractic or physical therapy for back pain); or helping coordinate care across a complex system
Applied Research Advisor – helping pull together existing knowledge (e.g., existing comparative effectiveness research) and combining it with new knowledge that can be extracted from the health plan’s or partner’s (e.g., hospital’s or pharmaceutical’s) information systems to develop knowledge that can then be applied to improve clinical policies and decisions, (intra- and) inter-enterprise processes and overall value derived from the health system.
Transaction processor first – some plans may choose to be the highly efficient transaction processor - low cost player – possibly using lower labor pools and really focus on doing this for themselves and others --- they would need to truly scale – and become the *processor of choice…
Potentially very different strategies that we might see for various health plans that of course leads to the need for various competencies from today.
Likely will need new types of Partners to be successful
Health Services Optimizer
Effective / efficient utilization of healthcare systems
New consumer responsibilities
Applied Research Advisor
Clinical decisions, cross-enterprise process and value improvement
Changing provider needs
Transaction Processor
Transaction efficiencies and flexibility
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
IBM Confidential

18. Conclusion
A transformation framework, implemented through strong leadership and a clear vision, is needed to affect major change.
Sustainable Cost Structure
Experimental Innovation within a National Framework
Collaboration and Mutual Accountability
Robust Information Infrastructure
Transparency
Choice
Coverage Decisions
Rational
Aligned Incentives
Wellness and Prevention
Consistent, Evidence-based, High-value Care
Innovation, Safety and Quality
Inner Circle or core
A focus on wellness, disease prevention and health promotion, including timely access to “health infomediaries” and clinicians who can help consumers with wellness, prevention, etc. Also, caregivers need to embrace consumerism rather than resist it.
Timely access to safe, consistent, high-value, evidence-based care delivery (the right care for the right person at the right time, delivered in the right venue by the right level of clinician every time). We need “highly effective clinical services across the full spectrum of health care services—from prevention, diagnosis, treatment, and rehabilitation, to end of life care and palliation.” From the IOM report on ”Knowing What Works”
The ability to innovate (new care approaches, interventions, diagnostics, clinical processes, drugs, devices, etc.) without compromising safety and quality. The ability to quickly get into practice. Detect and react to problems in Phase 4 clinical trials and beyond.
Middle circle
Rational coverage decisions – both for who is covered and what is covered. We currently ration by not covering people or certain types of services (e.g., dental, vision, mental health), instead of by not covering low-value services, regardless of the type. In short, we need to make rational rationing decisions.
Transparency and choice – actionable information about costs, quality and evidence
Aligned incentives / value-based reimbursement / payment reform. While aligned incentives include more than payment reform, payment reform is a key tool to align incentives across stakeholders, particularly the payers (employers, governments, at-risk health plans, and consumers) and the providers. Examples beyond payment reform include consumer incentives and intellectual property policies as we move to personalized medicine.
Outer circle
Experimental innovation within a national framework for reform. We can’t have 50 completely different approaches (i.e., each state) so we need some kind of guidelines or boundaries in the form of a national framework. This is particularly important as long as we have large employers providing benefits to people in a number of states. Also, there is no “silver bullet” so there won’t be a single conceptual innovation (e.g., single payer) that will solve all the problems. Healthcare is too complex to conceptualize the solution so we will need lots of experiments to learn what works and what doesn’t.
Mutual accountability – and collaboration – on the part of all stakeholders, including consumers – a willingness to share in both the upside and the downside of the solution
Robust IT infrastructure. Doing all of the above is incredibly information-intensive. We can’t do it in a paper-based environment. Need access to patient information and personalized, EBM, ideally embedded in the workflow of clinicians (just in time and just for me reminders, alerts, CDS, …), and ability to aggregate and analyze information for research, public health, etc. This chart also explains why IT is a critical enabler of a transformed hc system but will not transform the system by itself. As Laura Adams of the Rhode Island Quality Institute writes, “health IT alone adds little to no value and if developed in isolation from other critical reform initiatives, is likely to be, to borrow a phrase from Don Berwick, the next festival of waste.”
Sustainable cost structure. For the US, this includes:
Increasing the focus on wellness, prevention, early detection, etc.
Rational coverage decisions
Paying for value rather than volumes across preventive, acute and chronic care
Better matching supply with demand. The current imbalance may improve significantly with transparency and choice combined with aligned incentives / payment reform. Supply may no longer create its own demand.
Streamlining administrative processes. Every dollar spent on administrative costs is a dollar that can’t be spent on health promotion or care.
Key question: What set of changes is required to truly make a difference? Just EHRs won’t do. Neither will just saying we should focus on wellness and prevention. It requires instead the focus on wellness / prevention combined with reimbursement reform combined with EHRs so we can see what works and learn from it.
Source: IBM Global Business Services and IBM Institute for Business Value
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
IBM Confidential

19. Conclusion
We must challenge our fundamental beliefs about the US healthcare system
Truisms?
Our Perspective
It’s someone else’s problem to. I’ll “protect my turf” while they fix it.
All stakeholders need to be more accountable and work together
More money will fix the problem
If more money were the answer, we would have solved it by now
IT will fix the problem
We can’t fix the problem without IT
These truisms (i.e., apparently obvious truths) influence behaviors.
Problems cannot be solved by the same level of thinking that created them. Albert Einstein. Also, it’s not rocket science – it’s much more difficult than that.
Corollary #1 – There is a “silver bullet” or quick fix out there if we can just find it. No, the solution will require changing lots of things – and making tough decisions.
Corollary #2 – Market forces don’t work in healthcare and we need to bring them to the healthcare industry. The truth – Market forces are working. We get what we pay for (primarily piecework for very sick people). We don’t pay for the right things (e.g., prevention, early detection / intervention, care coordination) to have a value-base healthcare system.
We spend 2.3 times the OECD average. If more money would fix the problem, we’d have it fixed by now.
We can’t get to – and you can’t survive in – a transparent, value-based world without robust IT capabilities.
Centers of excellence, telemedicine, medical tourism may siphon off some of the more profitable procedures.
Can we afford $2 trillion or $4 trillion as a nation?
Healthcare is also the only industry in the US in which productivity is declining.
Remember the five drivers making the world fundamentally different now.
Other possibilities
We can’t afford to make the investments (in universal coverage, in HIT infrastructure, etc.). No, we can’t afford to NOT make the investments. From Laura Adams of Rhode Island Quality Institute: It isn’t a question of whether we can afford to spend the money to do this. We’re already spending the money -–the question is what we want to buy with it. Unless we act, the money will be spent on more duplicate tests, avoidable hospitalizations, the care required to mop up after the physical and emotional damage caused by medical errors and the consequences of uncoordinated care when we could be rapidly advancing toward a way out.
Benefits for IT-related investments accrue to other stakeholders
That may be true when rewards are based on volumes, not value.
The solution to the problem is consistent, high-value care delivery
Yes and we also must change consumer expectations and behaviors
Everyone should get all the care that he or she wants or needs
We do not have unlimited funding. We must make tough, informed decisions.
All healthcare is local
Solutions and much of the care will remain local. Competition won’t.
It’s about value, not costs
Not if you can’t afford it
Market forces don’t work in healthcare
They do – but they are poorly structured
This, too, shall pass
This time, the world is fundamentally different
Healthcare 2015 and Care Delivery: New Value Dimensions, New Delivery Models | DRAFT | 27-Mar-17
IBM Confidential

20. Thank you! Jim Adams, Executive Director
What is the purpose of the report? It is intended to describe what is needed and how to address the challenges we have today. We attempt to be futuristic / big picture enough in describing a desired state that looks beyond the myriad problems created by today’s broken healthcare systems and get to the “root cause.” To make adequate progress toward this desired state, we need to start the transformation now because it will be a long, difficult journey. The question is not “Will our healthcare system look different in 2015?” but instead “What can we do together to shape a sustainable, affordable, value-based healthcare system?” We’ve defined some elements that we think are important and the roles that care delivery organizations can play without being so presumptive or naïve as to think that we can develop generic strategy that would work for all CDOs or jurisdictions in the US or globally.
In other words, this report does not to paint a wonderful vision of healthcare in 2015, ignoring current realities.
3 stages and levels of thinking about the healthcare system in any country. This report addresses the first two.
We have to agree that the current state is not sustainable. Stated differently, status quo is not an option. The original HC 2015 addressed this point and is summarized in this report.
What is the desired future state or vision and what needs to be done at the “big picture” level? Hopefully, we can agree on the general direction and principles described in this more detailed view of care delivery. It is consistent in approach and key messages the original “Healthcare 2015: Win-win or lose-lose?” and with “Healthcare 2015 and US Health Plans” because payers and providers must work together to address common problems.
What can a specific organization or jurisdiction do? How do we get there? We are not so presumptive / naïve as to think we can develop generic strategy that would work for all CDOs or jurisdictions in the US or globally.
What can we do by ourselves?
What must be done through collaboration with other providers, with health plans, with governments, with consumers, etc.?
Jim Adams, Executive Director
IBM Center for Healthcare Management
IBM Confidential