Our healthcare system as it stands now is no longer sustainable in the long-term. We will have to implement a collective and substantial change in order to make our healthcare sustainable, accessible and more patient oriented. Value-based healthcare (VBHC) will accomplish this by providing an alternative approach to organising our healthcare system.
Core to VBHC is the focus on ‘patient value’, which is defined as patient-relevant outcomes divided by the total costs of delivering that care (for the healthcare system). Healthcare providers must be rewarded based on the value they deliver, instead of on the number of completed procedures and treatments, i.e. volumes. This creates a cost-aware and patient-oriented system that rewards value for the patient and by doing so enhances patient value. Organisations that can put this into practice effectively will be the differentiating healthcare providers of the future.
WHY DO WE SEE VBHC IMPLEMENTATION ONLY ON A LIMITED SCALE
Even though the various stakeholders in our healthcare system support VBHC principles, the effective implementation of these principles on a large-scale has failed to materialise. Vintura has investigated why implementing this new way-of-working presents so many difficulties. In this market research we involved representatives from hospitals, healthcare insurers, the pharmaceutical and medical devices industry and patient associations.
In this, we have deliberately chosen to focus on the Netherlands. The Netherlands is one of the front-runners in the field of VBHC. The lessons learned from Dutch practice can also be used as an inspiration for implementing VBHC internationally.
FOCUS ON COMMON DRIVERS
The market research Vintura conducted shows that improving patient value is the common driver and a connector for initiating the transition to VBHC. As it stands today, the various organisations involved tend to approach VBHC from their own perspective and based on their own specific drivers. However, if VBHC is to be implemented successfully, the parties involved will have to join forces to shape it. For this, the shared driver – the objective of increased patient value – must always be at the forefront.
ADDITION OF CHANGE MANAGEMENT
Michael Porter has published the basis for VBHC in his book Redefining health care in 2006, and his VBHC value agenda in 2013. In this, he outlines the ideal VBHC future, which is ambitious and conceptual by nature. However, it is not always clear ‘how’ this can be achieved.
Focusing on Porter’s value agenda, we can distinguish three main elements: control of healthcare, integration of healthcare and enablers for improvement (figure 1). These core elements indicate ‘what’ VBHC entails, but they say nothing about how organisations needs to change to make VBHC happen. The Vintura market research showed that VBHC requires a new mindset, new ways of collaborating within and between organisations, and new applications of IT/data management. For that reason,managing change is a fourth – and very important – element, that needs to be added to the value agenda.
Figure 1: Change management is added to Porter’s Value Agenda
VBHC GROWTH PATH
One common question that VBHC implementers struggle with is how to make the VBHC concept manageable. At Vintura, we believe that it is very difficult to accomplish the optimal VBHC state in one go. Therefore we recommend to move along the VBHC growth path (figure 2).
The four elements of the value agenda underlie the VBHC growth path. The steps to be taken for controlling healthcare are shown on the horizontal axis. Controlling includes the measuring, monitoring, steering and ultimately funding of healthcare. The steps for integrating healthcare, i.e. from individual treatment to a fully integrated care cycle, are shown on the vertical axis. IT infrastructure and geographical expansion are the external enablers that make it possible to initiate and/or accelerate change. The final element – change management – is all about how to handle change and which internal conditions need to be created to enable change: a vision, a need and capacity (funding, resources, people).
The growth path shows that a more realistic approach to VBHC is to take a first step based on the existing situation, and to progress from there. Taking a learning-by-doing approach generates internal and external trust: change takes place one step at a time. The good news is that each small step on the growth path can add value. The path to the optimal outcome is not predetermined; all those involved set the course together.
Figure 2: Growth path to VBHC, © Vintura 2017
HURDLES THAT AFFECT IMPLEMENTATION
As soon as the VBHC growth path is taken, hurdles will stand in the way of positive movement. So what are these hurdles? And how can they be overcome? In the market research, we studied the most significant hurdles within the four elements that affect the implementation of VBHC and how these hurdles can be overcome.
Integration of healthcare: For integration of care, an example of a frequently mentioned hurdle is the lack of flexibility of the current organisational structure to organise healthcare differently. Overcoming these hurdles calls for vision and perseverance.
Control of healthcare: One key hurdle mentioned related to outcomes-based healthcare control is the concern about the consequences of transparency. How will this impact healthcare providers on an individual and organisational level? This requires developing an improvement-focused mindset, rather than a culture focused on “punishing” suboptimal results.
Change management: VBHC requires an integrated perspective: it requires a change in culture and mindset as well as adopting a different leadership style. We should therefore view VBHC as a serious change process, which is often underestimated.
External enablers: many of the external hurdles mentioned involve financing. That requires new financial incentives, and we see various pilots on this topic in the Netherlands. At a national level, efforts must be made to increase the transparency of healthcare. This transparency will be a driver for further improvement and integration of healthcare. The patient will ultimately benefit the most.
MAKING IT HAPPEN TOGETHER
Improving our healthcare system is something that is relevant to all of us, and it is something in which all of those involved will have their own role to play. We have to achieve this through a joint effort; it is not something that can be dealt with and developed in isolation. It demands clear roles and expectations. Based on this, a shared ambition and plan of action can be defined.
There may be many reasons not to do anything; often there is only one reason to do something. In the case of VBHC, that very reason is crucial: more transparency and value for patients. The expectation is that the successful healthcare providers of the future will be those organisations that were the first to proactively start changing and focusing on continuous improvement, and who communicated this and hence attracted more patients.
In short, enough said, let’s get to work!
Author: Gérard Klop
This article is an abstract of the of the Vintura report ‘VBHC: working together’. Apply here for your free copy of the report: https://www.vintura.com/en/life-science-consulting/value-based-health-care/report/