Value as an Organizing Strategic Framework Thomas H Value as an Organizing Strategic Framework Thomas H. Lee, MD Network President, Partners HealthCare System Professor of Medicine, Harvard Medical School Professor of Health Policy and Management, HSPH Associate Editor, New England Journal of Medicine April 8, 2013

Health Care Reform Unfolds in Three Phases Insurance reform – who gets covered, where the money comes from Payment reform – how that money is paid to providers Delivery system reform – how the care is delivered

Health Care Reform Unfolds in Three Phases Insurance reform – who gets covered, where the money comes from Payment reform – how that money is paid to providers Delivery system reform – how the care is delivered Those second and third phases are getting underway They will be disruptive: They will create pressure for consolidation and integration Hospital-hospital Hospital-physician Payer provider

Why We Get “Stuck” We don’t have clarity on what we are trying to accomplish We don’t have a performance framework We don’t have data on outcomes that matter We don’t have data on costs We are not organized into functional teams We are not paid to improve value

Why We Get “Stuck” We don’t have clarity on what we are trying to accomplish We don’t have a performance framework We don’t have data on outcomes that matter We don’t have data on costs We are not organized into functional teams We are not paid to improve value A Path Forward: Porter Strategy Gawande Tactics Bohmer Operations

Three Colleagues and Key Themes From Their Work Michael Porter, Harvard Business School Value as defined by patient outcomes and costs as an organizing strategic framework for health care delivery organizations Atul Gawande, Brigham and Women’s Hospital Checklists that define key processes for which clinician teams should be reliable Richard Bohmer, Harvard Business School Teams that permanently own the work of improvement

Words That Resonate Through Their Work Value Measurement Outcomes Efficiency Improvement Learning Collaboration Humility Discipline Teamwork

Porter’s Value Framework – Ideas Whose Time Has Come Fundamental question – What are we trying to do? Clinicians and other stakeholders need shared overarching goal Otherwise, interactions devolve into gamesmanship with goal of protecting each stakeholders’ interests Traditional concepts of quality put focus on clinicians’ reliability in performing processes Our goal must be more than defending ourselves from criticism Goal has to be one that invokes problem solving for issues of patients

Porter’s Value Framework – Ideas Whose Time Has Come Fundamental question – What are we trying to do? Clinicians and other stakeholders need shared overarching goal Otherwise, interactions devolve into gamesmanship with goal of protecting each stakeholders’ interests Traditional concepts of quality put focus on clinicians’ reliability in performing processes Our goal must be more than defending ourselves from criticism Goal has to be one that invokes problem solving for issues of patients Our shared goal should be improvement of value as defined by the outcomes that matter to patients and costs over meaningful episodes of care

Value for Patients = Health Outcomes Cost of delivering outcomes Our overarching goal should be to improve value of care for patients & families, as defined by patients Cost Outcomes VALUE FOR PATIENTS Defined by patient Measured for patient’s condition over entire episode of care Measured for patient’s condition over entire episode of care Value for Patients = Health Outcomes Cost of delivering outcomes Improving value for patients may be the only thing that all key stakeholders can agree upon 10

There is no one outcome that tells the entire story for any condition Value Based Clinical Outcomes Experience in achieving that outcome Cost to Produce the Outcome Tier 1 – Health status achieved: survival, degree of health recovery Tier 2 – Process of recovery: time to recovery, disutility of care Tier 3 – Sustainability of health This framework is not about competition. It is about improvement and it is about collaboration 11

Care Redesign Deliverables – Phase I Value Dashboard Care Redesign Plan Care Plan: pause points and key interventions Incentives: bundled payment program planning Performance Metrics: measures to monitor implementation and value Version 1.0: outcomes, processes, service metrics, and cost available currently Version 2.0 (Future Aspirations): measures that matter to patients, e.g., outcomes

Version 1.1: AMI MGH saw an increase in readmissions for this measurement period. 15.0% of patients were readmitted as opposed to 9.9% in FY10. 2) % of Short Stay patients with 1 or more Echo or Cath decreased from last measurement period: likely due to Care Redesign focus

Performance Dashboard 1.0 for End of Life Care - 14 -

Bohmer Operations Teams that have responsibility for improvement of value – forever Data on outcomes and costs collected as routine part of care Incentives (financial and otherwise) for improvement A leader who thinks constantly about improving performance Formal and informal interactions among team members

Words That Resonate Through Their Work Value Measurement Outcomes Efficiency Improvement Learning Collaboration Humility Discipline Teamwork