Redefining the economics of health care is certainly a daunting undertaking, but nonetheless it is necessary to ensure the long-term global viability of the industry, including the practice of anesthesiology. While many panaceas have been proposed over the past five decades, Michael E. Porter, PhD, a professor at Harvard Business School, in Boston, believes he has the answer: value-based health care that focuses on conditions rather than silos of clinical practice.
Speaking at the opening session of the 2016 annual meeting of the American Society of Anesthesiologists, Dr. Porter discussed the tenets of his “value agenda” and their implications for the practice of anesthesiology.
“We’ve been worrying about the costs in health care for 40 or 50 years,” Dr. Porter said, “and it’s also an area where people have tried many things. The problem is that none of it has worked. Yes, there’s been incremental improvement, but it hasn’t changed the trajectory of the system.
“In the end, we can’t solve the problem of health care with incremental add-on solutions,” he continued. “We have to change the very structure of how we deliver and think about health care.”
The starting point for this new path forward is what Dr. Porter said must be, in the future, the focal point of health care: value for the patient, which is defined as the ratio of relevant health outcomes to the cost of achieving them.
“To achieve success in any field, you have to start with extreme clarity on the goal,” Dr. Porter said. “Value is our unifying goal.” Indeed, he proposed a concept that he calls “the value agenda,” which is composed of a complete restructuring of how health care is organized, delivered, measured and reimbursed. The agenda includes six interdependent and mutually reinforcing components, described below. All are elements that Dr. Porter says should be advanced together to help ensure maximum success.
- No to Silos, Yes to Integrated Practice Units
Perhaps the most significant shift in the value agenda is changing the way clinicians are organized to deliver care. “In health care, we think of the units of analysis as hospitals, systems, specialties or care sites,” Dr. Porter explained. “Value-based thinking says that isn’t right. We have to reorganize around the need, not the tools.”
Rather than practicing in departmental silos, Dr. Porter suggests that medicine reorganize into what he calls integrated practice units (IPUs) that focus on patients’ medical conditions. In an IPU, the full care cycle for a patient’s condition is delivered by a dedicated team of both clinical and nonclinical personnel. “You’ve got to see yourself on a different team now,” he said. “You’re not on the anesthesiology team anymore. You’re on the team that cares for breast cancer … or whatever the condition may be.”
As such, the IPU is made up of an interdisciplinary team of experts working together toward a common goal: maximizing the patient’s outcomes as efficiently as possible. Team members know and trust one another, coordinate their schedules to minimize wasted time and resources, and meet regularly to review their performance. This collaboration, he proposed, will instinctively drive professionals to devise better and more efficient ways to treat patients. Furthermore, while it’s ideal that members of an IPU are located in the same physical space, they work as a team even if they’re based at different locations.
Although IPUs provide treatment for the condition in question, their role does not begin and end there. IPUs are also responsible for engaging patients and their families in care, whether by providing education and counseling, encouraging adherence to treatment and prevention protocols, or supporting behavioral changes.
Radical as they may seem, IPUs are beginning to proliferate across many areas of acute and chronic care, from organ transplantation to mental health conditions such as eating disorders. The results are consistent: faster treatment, better outcomes, lower costs, and usually an improved market share in the condition.
“We have lots of organizations all providing the same services,” he said. “By the same token, there are many clinicians who revel in doing lots of different kinds of cases. But how can you work on 72 different kinds of conditions with their associated complexities and do it superbly well? It’s almost impossible.”
- Measure Value by Outcomes and Costs
The second step in the six-step value agenda is measuring value (i.e., outcomes and costs) for every patient. “Health care is one of the few places I’ve ever seen that is a fact-free zone on the most important question,” Dr. Porter explained, “because we’re not measuring outcomes systematically for each condition. We don’t even understand the cost for the full set of care for a particular condition.”
When it comes to measuring outcomes, institutions today generally track only a few areas, such as mortality and safety, and focus on process measures that relate compliance with practice guidelines. In contrast, Dr. Porter believes that the only quality measures that really matter are outcomes that matter to patients.
These outcomes include the health status achieved, the nature of the care cycle/recovery and the sustainability of health. Outcomes should be measured by the medical condition, not by specialty or intervention, a trend that has seen increasing popularity in recent years, with subsequent improvement in patient outcomes.
- Learn to Love Bundled Payments
The third fundamental change in Dr. Porter’s value agenda is one that may well prove most unsettling to anesthesiologists, although its benefits can be profound: embracing bundled payments for care cycles. “Right now we get paid for volume, not whether we deliver value,” he said. Bundled payments, on the other hand, link reimbursement with overall patient care for a particular medical condition. Such payment systems encourage teamwork and high-value care.
Not surprisingly, anesthesiologists—like many of their counterparts in other specialties—remain nervous about bundled payments. While concerns about patient heterogeneity and lack of accurate cost data at the condition level are certainly legitimate, Dr. Porter believes that bundled payment will only help clinicians to both grow volume and improve value. “This is something that anesthesiology must jump on,” he said. “That’s how you get rewarded for doing great work. It’s a way to preserve our incomes and get credit for what we do.”
- Truly Integrate Care Delivery Systems
Integrating care delivery systems is the fourth step in redefining health care, according to the value agenda. “We need to turn health systems into true systems rather than confederations of stand-alone units that largely duplicate services,” Dr. Porter said. “That’s not going to work.”
Integrating systems not only will help eliminate the fragmentation and duplication of care that currently exists, but also optimize the types of care delivered in each location. Achieving true integration is a heady undertaking; it will ultimately hinge upon institutions defining their scope of services, concentrating volume in fewer locations, choosing the right location for each service line and integrating care for patients across locations.
- Broaden Geographic Reach
Location is the central tenet of the fifth pillar of the value agenda, which aims to broaden the geographic reach of what is currently a heavily localized industry. The way that Dr. Porter sees it, providers for specific conditions need to serve far more patients than they currently do, an undertaking that can be achieved via strategic expansion of IPUs, not the purchase of full-service hospitals or practices in new geographic areas.
As Dr. Porter described it, geographic expansion can take two principal forms. The first is a hub-and-spoke model, wherein each IPU is surrounded by satellite facilities that are staffed at least partly by clinicians and other personnel employed by the parent organization. The second form, a clinical affiliation model sees an IPU partner with community providers or other local organizations, instead of adding capacity.
The affiliates benefit from the expertise and experience of the parent IPU, while the IPU broadens its regional reach and brand, and benefits from management fees, shared revenue and/or referral of complex cases.
- Don’t Forget IT
Finally, the redefinition of health care systems requires what Dr. Porter calls the “right” information technology (IT) platform. “We need a platform that allows us to understand the cycle of care for a particular condition, pull the data together, aggregate all the people involved, and inform everybody about what they need to know to deliver high-caliber care,” he said.
Historically, health care IT systems have been partitioned by specialty, a phenomenon that complicates integrated care. The right IT system can help the various parts of an IPU work together, enabling new measurement and reimbursement approaches, and tie the parts of a well-structured delivery system together.
“You need a system that gives all the people in the care team visibility on the care cycle,” he added. “And you need a system that allows you to see real costs in the cycle of care so you can adjust and become more efficient.”
For the Anesthesiologist, a Radical Shift
What does the value agenda mean for anesthesiologists? As Dr. Porter related, it represents a host of new opportunities, although they will only come with a radical shift in mindset.
“First of all, you’ve got to start thinking about conditions, because they are going to anchor you to value. Where do we fit in care cycles? Obviously in the OR [operating room], but how do we stretch our role to make sure that we help maximize our value to the whole team?”
Similarly, anesthesiologists will need to define and document their role in patient outcomes, particularly those that matter to patients. “We’re not specialists; we’re part of a care team for a condition. We’ve got to be leading the jump over the gulf that exists because of the current mindset and the way practice is going to evolve. If we only think of the impact we make in the OR, we minimize our overall impact. But if we think more broadly, there are lots of things we influence.
“In too many initiatives I’ve been involved in, the anesthesiologists wanted to keep their departments separate,” he added. “That’s not a healthy way to think about the future. We can’t defend the roles we played in the past. It’s not good for the patient, it’s not good for the system and it’s not good for us.”
Interestingly, Dr. Porter added that the evolution of the anesthesiologists’ role includes a change in attitude about nurse anesthetists, who he says are a necessary part of the value agenda. “They’ve got to do what they can do and we’ve got to do what only we can do,” he said. “There’s a lot of work out there and a shortage of anesthesiologists is looming. We need to move on to value; there is a lot of opportunity in value for anesthesiology as a specialty.” He said anesthesiologists must strive to “practice at the highest level of their degree.”
Yes, implementing the value agenda is a serious undertaking, one that will likely be fraught with frustration in its early years. But with strong leadership, commitment across specialties and focus on the value agenda, it’s one that is ultimately achievable. As Dr. Porter asserted, anesthesiologists stand to benefit as much in this brave new world as any other specialty. “The field of anesthesiology is an enormously important one, with massive effects on both efficiency and outcomes. Let’s get on with it.”
Alex Macario, MD, MBA, agreed that optimizing health care delivery is a worthy goal, but acknowledged the challenges of such undertakings. “Health care is a very complex industry, where multiple stakeholders each have strong business interests,” he said, a professor of anesthesiology, perioperative and pain medicine at Stanford University School of Medicine, in California. “There are no easy major fixes, otherwise they would have already been implemented.
“One example of how challenging it is for a nation to simultaneously optimize cost, access and quality is that countries with publicly funded systems are trialing private, free-market interventions to improve access and/or reduce cost,” Dr. Macario noted. “It is nice to get some guiding principles from Dr. Porter, as he has been studying and thinking about health care for a long time and has a vision for what it could look like in the USA a decade from now. The challenge is how to take those principles and apply them at the ground level, as well as at the regional or national level.
“At the end of the day, physicians want simply to be able to take care of patients and work in a practice setting where the system has been organized to successfully optimize cost, quality and access.”