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Transitioning to value-based healthcare

Article-Transitioning to value-based healthcare

A value-based healthcare system ensures sustainability by plugging leakages.

A recent report by Boston Consulting Group (BCG) highlighted that current healthcare systems around the globe are struggling to be sustainable, and solutions must be considered and applied by governments to optimise healthcare spending and improve services for citizens. The report, titled ‘Curbing the Cost Curve in Health Care: Plugging the Leakage,’ stressed that, although there will be challenges along the way, the transition to a value-based healthcare system is a necessity for every system in the region.

According to the report, half of the world’s population is without access to healthcare and those fortunate enough to have access are struggling with rising costs. As an example, more than 800 million people spend at least 10 per cent of their household incomes on healthcare, while 100 million people are driven into poverty annually through out-of-pocket spending on healthcare. Rising costs, an unintended consequence of national healthcare systems, can be relentless. The report highlights practical solutions to ensure the sustainability of health systems by plugging the leakage in funding, payment, provision, and consumption of health services to maximise the share that reaches the population.

When asked about what the common leakages are in the healthcare system, Dr. Nikhil Idnani, managing director and partner, BCG, told Omnia Health Magazine: “Healthcare systems are generally built incrementally, with different stakeholders employing their own ideas on policy, technology, and interventions, resulting in a compilation of unique offerings.

“Based on our analysis of several national healthcare systems, there are leakages that are common across countries’ healthcare systems and leakage that is specific to certain countries. A common leakage across countries relates to the moral hazard where the patient consumes healthcare services while another party (the insurer/ employer/ government) pays for those services, leading to over-consumption. Another common leakage is the lack of integration and collaboration among healthcare stakeholders leading to silos that cause fragmentation and duplication of services.”

To ensure the sustainability of GCC health systems, it is essential to plug the leakage in funding, payment, provision, and consumption of health services to maximise the value that reaches the population, explained Idnani.

Nikhil Idnani, BCG.jpg

Dr. Nikhil Idnani

High quality, low-cost care model

A value-based healthcare (VBHC) model’s aim is to improve population health outcomes while maintaining or lowering overall costs. Value-based healthcare delivers higher-quality patient outcomes at the same or lower total cost for a given condition. It works by analysing outcomes data, identifying best-practices, and disseminating those best-practices. Fundamentally, it’s about identifying the practices that lead to the best outcomes and encourage providers to adopt those, weed out practices that do not lead to high outcomes or actually cause harm.

Moreover, it’s about paying for results rather than for activities. It helps patients know which doctors/ hospitals deliver better care at the same or lower cost, as well as which drugs, procedures, and devices would work best for them. It leads to healthcare payers reimbursing based on outcomes and pushing patients toward care delivery with better outcomes. It causes healthcare providers to compete based on achieved medical outcomes, thereby, attracting more patients, referrals, and payer support. Lastly, it makes suppliers take a more holistic approach, strategically selecting where to play and what to offer to improve outcomes.

“In developing solutions for leakages, a VBHC lens should be adopted to direct spending toward areas that add the most value to consumers,” he said. “Whatever the solution, they must be holistic and consider the entire health system rather than its individual parts, as all too often, reforms take place in silos leading to unintended consequences in other parts of the health system. For example, we change the payment model without taking into consideration the behaviour of providers or patients. Only with a holistic approach can patients derive true health value from their healthcare providers.”

Integrating healthcare systems is vital to establishing value-based healthcare systems, he added. Information sharing across facilities ensures oversight and coordination, and access to all data is essential to transparency and not hindering value through unnecessary or duplicate treatments. Governments can help resolve such issues by assuming a prominent role in managing providers, funding efficiency programmes, and offering financial incentives to encourage providers to report outcomes or mandate reporting results as part of national policy.

Business continuity measures

According to Idnani, in light of the COVID-19 pandemic, healthcare providers must safeguard patient and caregiver confidence – ensure staff safety and wellness, handle employees’ expectations, ensure clear and constant communication and mobilise staff to meet increased demand. Following this, sustained surges in demand must be accommodated for – effectively rotating staff to alleviate workforce stress, securing the supply chain for necessary resources, ensuring equipment readiness and maintenance, making sure technology is safe, resilient, and scalable to increase automation; securing liquidity and managing cash carefully and strategically due to reduced revenues and increased expenditure.

“Lastly, and most importantly, it is critical for healthcare providers to also shift mindsets to the future – to the post-COVID-19 era – and begin planning for it today so that they are resilient and sustainable, and come out of the crisis stronger,” he emphasised. “Providers must invest for the future to implement lasting change and learn from the crisis – instilling agility into operations to switch between COVID-19 and normal modes, implementing efficiency programmes to run lean, rolling out new business models such as telemedicine and remote monitoring, and investing in attractive growth opportunities. Practically speaking, the formation of a COVID-19 Response Team (CRT) is recommended for public and private sector healthcare providers in the Middle East to ensure they can navigate the ongoing difficulties and lay the foundations for a sustainable future.”

He concluded that fundamentally, healthcare systems across the world need to continue to be redesigned in light of many of the dynamics highlighted. “These changes can be imposed on a system or can be embraced by the leadership and eased in across the system. Healthcare leaders have to realise that the current model is not sustainable and has to be radically transformed.”

TAGS: Quality
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