Value-Based Health Care Delivery: Creating an Action-Research

Value-Based Health Care Delivery: Creating an Action-Research

Value-Based Health Care Delivery: Creating an Action-Research Agenda Professor Michael E. Porter Harvard Business School www.isc.hbs.edu START July 15...

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Value-Based Health Care Delivery: Creating an Action-Research Agenda Professor Michael E. Porter Harvard Business School www.isc.hbs.edu START July 15, 2014 This presentation draws on Porter, Michael E. and Thomas H. Lee. “The Strategy that Will Fix Health Care,” Harvard Business Review, October 2013; Porter, Michael E. with Thomas H. Lee and Erika A. Pabo. “Redesigning Primary Care: A Strategic Vision to Improve Value by Organizing Around Patients’ Needs,” Health Affairs, March 2013; Porter, Michael E. and Robert Kaplan. “How to Solve the Cost Crisis in Health Care,” Harvard Business Review, September 2011; Porter, Michael E. “What is Value in Health Care” and supplementary papers, New England Journal of Medicine, December 2010; Porter, Michael E. “A Strategy for Health Care Reform—Toward a Value-Based System,” New England Journal of Medicine, June 2009; Porter, Michael E. and Elizabeth Olmsted Teisberg. Redefining Health Care: Creating Value-Based Competition on Results. (2006) Additional information about these ideas, as well as case studies, can be found at the Institute for Strategy and Competitiveness Redefining Health Care website at http://www.hbs.edu/rhc/index.html. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of Michael E. Porter and Elizabeth O.Teisberg.

Timeline

2004

“Redefining  Competition in  Health Care”  (HBR)

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Competition in U.S. Health Care • Competition to shift costs or capture greater revenue • Competition to capture patients and restrict choice • Competition to increase bargaining power to secure discounts or price premiums • Competition to exclude less healthy individuals

• Competition on the wrong things leads to a zero-sum competition with no or negative value

2011.09.03 Comprehensive Deck

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Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with Elizabeth Teisberg)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

“Redefining Competition in Health Care” (HBR)

2011.09.03 Comprehensive Deck

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Copyright © Michael Porter 2013

Solving the Health Care Problem • The core issue in health care is value for patients

Value =

Health outcomes that matter to patients Costs of delivering the outcomes



Delivering high and improving value is the fundamental purpose of health care • Value is the only goal that can unite the interests of all system participants • Improving value is the only real solution versus further cost shifting, restricting services, or dramatically reducing the compensation of health care professionals

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Copyright © Michael Porter 2013

Creating a Value-Based Health Care Delivery System The Strategic Agenda 1. Organize Care into Integrated Practice Units (IPUs) around Patient Medical Conditions − For primary and preventive care, organize to serve distinct patient segments

2. Measure Outcomes and Costs for Every Patient 3. Move to Bundled Payments for Care Cycles 4. Integrate Care Delivery Systems 5. Expand Geographic Reach and Serve Populations 6. Build an Enabling Information Technology Platform

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Copyright © Michael Porter 2013

Getting Unstuck Legacy System

Value-Based System Agenda

1

1 Organize into Integrated Practice Units (IPUs)

Organized Around Specialties and Departments, with Private Practice Physicians

5 Providers Limited to Serving their Immediate Geographic Area

2 5 Measures Process Expand Geographic Compliance and Reach Charges

6 Siloed IT Services for Functions, Services, and Departments

4 Each Hospital or Service Offers a Full Line of Services

6 Build an Integrated Information Technology Platform

3 Fee-For-Service Payments Based on Volume7of Services Delivered

4 Integrate Care Delivery Systems

3 Move to B Payments Copyright © Michael Porter 2013 Cycl

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

8

Copyright © Michael Porter 2013

Value Based Health Care Case Studies Outcome  Specialty  Primary  Measure‐ Bundled System Geographic Role of  Location IPUs Care TDABC Pricing Integration Expansion Payors ment

Case Study

Medical  Condition

MD Anderson Cancer Center:  Interdisciplinary Cancer Care

Head and Neck Cancer,  Endocrine Cancer Houston

The West German Headache  Center: Integrated Migraine Care Migraine

Germany

X

X

X

X

Commonwealth Care Alliance:  Elderly and Disabled Care

Primary/ Preventative  Care Boston

X

Pitney Bowes: Employer Health  Strategy

Primary/ Preventative  Care US

X

X

X

Ledina Lushko: Navigating Health  Adrenal Cortical  Care Delivery Carcinoma

Chicago

X

Michelin Employee Health  Strategy*

Diabetes Care

South  Carolina

X

The Joslin Diabetes Center

Diabetes Care

Boston

X

Gastroenterology Care at   Sweden’s Highland Hospital

Inflammatory Bowel  Disease

Sweden

X

Great Western Hospital: High‐Risk  Pregnancy Care High‐Risk Pregnancy

UK

X

Brigham and Women's  Shapiro  Cardiovascular Center

Cardiovascular Care

Boston

X

Martini Klinik: Prostate Cancer  Care

Prostate Cancer

Germany

X

X

Dartmouth‐Hitchcock Medical  Center: Spine Care

Spine Care

NH

X

X

Germany

X

X

Schon Klinik Eating Disorder Care Eating Disorders

X

X

X

X X

X X X

X

X

X

* This case was prepared by Elizabeth O. Teisberg, Professor, The Geisel School of Medicine at Dartmouth and Scott Wallace, Visiting Professor,The Geisel School of Medicine at Dartmouth. 9

Copyright © Michael Porter 2013

Value Based Health Care Case Studies – continued

Case Study

Medical  Condition

Outcome  Specialty  Primary  Measure‐ Bundled System Geographic Role of  Location IPUs Care TDABC Pricing Integration Expansion Payors ment

UCLA: Kidney Transplantation

ESRD, Kidney  Transplantation

Los Angeles

In‐Vitro Fertilization: Outcomes  Measurement

Infertility, IVF

X

X

X

US

X

X

Plastic, Oral and  Boston Children’s Hospital TDABC Orthopedic Surgery 

Boston

X

X

X

Schon Klinik: Measuring Cost  and Value

Total Knee  Replacement

Germany

X

X

X

X

Sun Yat‐Sen Cancer Center:  Breast Cancer Care in Taiwan

Breast Cancer

Taiwan

X

X

X

Global Health Partner: Obesity  Care

Obesity,  Bariatric Surgery

Sweden

X

X

X

The Cleveland Clinic: Growth  Strategy

Health System

Cleveland

X

X

X

ThedaCare: System Strategy

Health System

Wisconsin

X

X

X

Children's Hospital of  Philadelphia: Network Strategy

Health System

Philadelphia Region

Reconfiguring Stroke Care  in  North Central London

Stroke

UK

X

X X

X X

X

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Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

2008

2009

2010

2011

2012

2013

2014

Health Care Leaders Strategy Course, HBS

11

Copyright © Michael Porter 2013

Value Based Health Care Delivery Courses and Lectures for Executives Harvard Courses • 2008-2014 – Intensive Seminar in Value-Based Health Care Delivery (1 week full-time) – Total of 602 participants • 2009-2014 – Leadership Workshop on Strategy for Health Care Delivery (2 days) – Total of 381 participants • 2011-2014 – Partners HealthCare Value Based Health Care Seminar for Residents and Fellows (3 days) – Total 200 participants • 2012-2014 – Value Measurement in Health Care (2 days) – Total of 333 participants

External Courses • 2006-2012 – Health Care Innovation (University of Virginia, ~450 total participants) • 2006-2012 – Executive Workshops (Brigham and Women’s Hospital, St. Francis Hospital, Hoag Hospital, Baylor Health, G.E., Cigna, Humana… total of ~900 participants) • 2008-2012 – Global Health Delivery (Harvard School of Public Health, ~80 participants) • 2008-2011 – Medical Care and the Corporation (Dartmouth, ~150 participants) • 2009-2011 – Health Care Management (University of Virginia, ~100 participants) • 2010-2012 – UCLA Strategy for Health Care Delivery (~90 participants) • 2010-2012 – Medicaid Leadership Institute (85 participants) • June 2011 – Strategy for Health Care Delivery: United Kingdom (80 participants) • March 2012 – AAOS Enhancing Value in Musculoskeletal Care Delivery (125 participants) • Fall 2013 – Dartmouth Masters in Health Care Delivery Science (50 participants) • Fall 2013 – Executive Workshop Philips Health Care (70 participants) • Spring 2014 – Value Based Delivery Leadership Program: Texas Medical Center (83 participants) 12

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“What is Value in Health Care?” (NEJM)

2008

2009

2010

2011

2012

2013

2014

Health Care Leaders Strategy Course, HBS

13

Copyright © Michael Porter 2013

Timeline Collaboration with Bob Kaplan Begins, Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“What is Value in Health Care?” (NEJM)

2008

2009

2010

2011

2012

2013

2014

Health Care Leaders Strategy Course, HBS

14

Copyright © Michael Porter 2013

Timeline Collaboration with Bob Kaplan Begins, Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“What is Value in Health Care?” (NEJM)

2008

2009

Health Care Leaders Strategy Course, HBS

15

2010

2011

2012

2013

2014

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR)

Copyright © Michael Porter 2013

Timeline Collaboration with Bob Kaplan Begins, Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“What is Value in Health Care?” (NEJM)

2008

2009

Health Care Leaders Strategy Course, HBS

16

2010

Value Based Health Care Seminar for Residents and Fellows

2011

2012

2013

2014

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR)

Copyright © Michael Porter 2013

Timeline Collaboration with Bob Kaplan Begins, Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“What is Value in Health Care?” (NEJM)

2008

2009

Health Care Leaders Strategy Course, HBS

2010

Value Based Health Care Seminar for Residents and Fellows

2011

2012

2013

2014

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR) Value Measurement Executive Course

17

Copyright © Michael Porter 2013

Timeline Collaboration with Bob Kaplan Begins, Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“What is Value in Health Care?” (NEJM)

2008

2009

Health Care Leaders Strategy Course, HBS

2010

Value Based Health Care Seminar for Residents and Fellows ICHOM is  founded

2011

2012

2013

2014

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR) Value Measurement Executive Course

18

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“Redefining German HealthCollaboration with Bob Care” (with Kaplan Begins, Clemens Guth) Value Based Health Care Seminar for Residents and Fellows “What is Value in Health Care?” ICHOM is  (NEJM) founded

2008

2009

Health Care Leaders Strategy Course, HBS

2010

2011

2012

2013

2014

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR) Value Measurement Executive Course

19

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“Redefining German HealthCollaboration with Bob Care” (with Kaplan Begins, Clemens Guth) Value Based Health Care Seminar for Residents and Fellows “What is Value in Health Care?” ICHOM is  (NEJM) founded

2008

2009

Health Care Leaders Strategy Course, HBS

2010

2011

2012

2013

2014

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR) Value Measurement Executive “Redesigning Primary Course Care” (Health Affairs)

20

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“Redefining German HealthCollaboration with Bob Care” (with Kaplan Begins, Clemens Guth) Value Based Health Care Seminar for Residents and Fellows “What is Value in Health Care?” ICHOM is  (NEJM) founded

2008

2009

Health Care Leaders Strategy Course, HBS

2010

2011

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR)

2012

2013

2014

“Redefining Global Health-Care Delivery,” (with Jim Yong Kim and Paul Farmer, The Lancet)

Value Measurement Executive “Redesigning Primary Course Care” (Health Affairs)

21

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“Redefining German HealthCollaboration with Bob Care” (with Kaplan Begins, Clemens Guth) Value Based Health Care Seminar for Residents and Fellows “What is Value in Health Care?” ICHOM is  (NEJM) founded

2008

2009

Health Care Leaders Strategy Course, HBS

2010

2011

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR)

2012

“The Strategy to Fix Health Care,” (with Thomas Lee, HBR)

2013

2014

“Redefining Global Health-Care Delivery,” (with Jim Yong Kim and Paul Farmer, The Lancet)

Value Measurement Executive “Redesigning Primary Course Care” (Health Affairs)

22

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“Redefining German HealthCollaboration with Bob Care” (with Kaplan Begins, Clemens Guth) Value Based Health Care Seminar for Residents and Fellows “What is Value in Health Care?” ICHOM is  (NEJM) founded

2008

2009

Health Care Leaders Strategy Course, HBS

2010

2011

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR)

2012

“The Strategy to Fix Health Care,” (with Thomas Lee, HBR)

2013

2014

“Redefining Global Health-Care Delivery,” (with Jim Yong Kim and Paul Farmer, The Lancet)

Value Measurement Executive “Redesigning Primary Course Care” (Health Affairs)

“How to pay for Health Care” (with Bob Kaplan)

23

Copyright © Michael Porter 2013

Timeline

Redefining Health Care: Creating Value-Based Competition on Results. (with VBHCD Elizabeth Teisberg) Intensive Seminar at HBS

2004

“Redefining Competition in Health Care” (HBR)

2005

2006

2007

The Global Health Delivery Project is founded with Dr. Jim Yong Kim

“Redefining German HealthCollaboration with Bob Care” (with Kaplan Begins, Clemens Guth) Value Based Health Care Seminar for Residents and Fellows “What is Value in Health Care?” ICHOM is  (NEJM) founded

2008

2009

Health Care Leaders Strategy Course, HBS

2010

2011

“How to Solve the Cost Crisis in Health Care,” (with Bob Kaplan, HBR)

2012

“The Strategy to Fix Health Care,” (with Thomas Lee, HBR)

2013

2014

“Redefining Global Health-Care Delivery,” (with Jim Yong Kim and Paul Farmer, The Lancet)

Value Measurement Executive “Redesigning Primary Course Care” (Health Affairs)

“How to pay for Health Care” (with Bob Kaplan)

24

Copyright © Michael Porter 2013