Value-based healthcare: how to sell the obvious?

When talking about healthcare, almost immediately the focus is on cost, not value. This is about to change as most Western countries are not expecting to be able to increase their healthcare expenditures any further, with new treatments coming to the market that are ever more expensive and the rising burden of an aging population. New models are needed, and not surprisingly the concept of value-based healthcare –mooted by Harvard’s Michael E. Porter more than a decade ago – has attracted more and more attention in recent years. 170 healthcare innovators from the Basel region and beyond took part in the online DayOne Expert Event on June 18, co-hosted by Deloitte Switzerland. They were eager to learn why value-based healthcare is needed, how it is done and who will profit.

Elizabeth Hampson, Director Health Innovation Strategy with Deloitte, gave an overview of where the industry stands. She stated that the trend towards value-based healthcare will be catalysed as more and more data becomes available. This makes it possible to effectively measure the outcomes of interventions and therefore to set the basis for a broader discussion on value.

How data science allows for new ways of bringing precision medicine into patient journeys was shown by Michael Rebhan, Senior Principal Scientist with the Novartis Institutes of Biomedical Research. Machine learning algorithms are used to predict and detect fast disease progression early on, before it is too late and costly interventions are needed. His concern: What do we do with this knowledge and with new tools? How can we build more early interventions and even prevention, even though the current healthcare system is not built for embracing such approaches? Maybe value-based healthcare could facilitate innovation on earlier interventions.

Michel Mohler, co-founder of Lyfegen, pointed out, that so far, value-based contracting is still a new business model where the reimbursement is linked to the achieved outcome of a therapy. Besides Italy since 2006 first implementations have happened for expensive treatments in low or middle-income regions. The gained experience in those set-ups can now be transformed thanks to arising industry standards regarding outcomes into other markets. The insights into the collected data can further be used to learn and improve therapies. As the life science companies are reimbursed based on outcome there is a real incentive to do so.

The perspective of the patient as the starting point in the numerator of value equation was the focus of Florian Rüter’s observations. The Head of Quality Management at the University Hospital Basel emphasized the importance of the PROMs, the experience with them in now 11 diseases and their embedding in the strategic VBHC program.

The complexity of actually adopting contracts in the current system was also illustrated. He made clear that value-based healthcare means bringing the patient into the focus. And this means defining and using patient-reported outcomes measures (PROMs) and having a system in place that actually captures the relevant data. His example: urinary incontinence and sexual dysfunction, even though crucial as criteria for the quality of life of patients who have undergone prostate cancer treatment, are still not a common and comparable outcome measurement among clinics.

All speakers were then involved in discussions with the audience during breakout sessions. And these are our learnings:

1) A change of mindset is needed

If health and not treatment is the product of medicine (as suggested by Porter) while the outcome of a given intervention and not sheer volume is the main measure, then the discussion will ultimately become wider requiring a social consensus and not merely scientific evidence to define what is of value and what is not.

2) Patient-centric approach is key

Opening a dialogue with patients to understand their needs and mitigate discrepancies between clinical and patient-reported outcomes will be crucial for all stakeholders wanting to bring about value-based healthcare. The challenge will be how much personalization will be possible to allow for in defining the value of healthcare.

3) No business value without scale

Value-based healthcare will only succeed provided it does not add more complexity to the healthcare system. As personalization and precision medicine develops and “one size fits all” approaches no longer apply, focusing on common outcomes and values may be a chance to simplify. But will it also be applicable across different healthcare systems and cultures?

4) Data is the driver

Value is defined as the outcome of an intervention divided by costs. Therefore, agreeing not only on what outcomes to measure but also on how to measure them will be crucial. In order to achieve value-based healthcare, patients will need to share their data with healthcare providers. This will require the building of a trustworthy health data ecosystem.

5) Leadership is needed

Value-based healthcare signifies a radical change to the current healthcare system as we know it. As long as there are no clear incentives, the adaptation to a new model will be unlikely. Without top-down commitment and leadership from policy makers backed by the needs of patients and the general population, value-based healthcare will remain a hard sell.

Thank you to all speakers and participants for your engaged contributions!

And thank you to co-host Barri Falk, Swiss Life Sciences Consulting Lead, Deloitte Switzerland, for co-authoring this report.

If you are interested to moving from inspiration to action, please notice that at DayOne we are building an Accelerator on the topic. The DayOne Value-based Healthcare Accelerator seeks to bring together stakeholders willing to take some of these lessons above and make practical steps defining challenges which then will be solved collaboratively together with the energy and entrepreneurial spirit of dedicated startups. If you and your organisation are interested in being part of this coalition of stakeholders or a startup please be in contact to douglas.haggstrom@baselarea.swiss.

Author: Thomas Brenzikofer