Value guided healthcare as a platform for industrial development in Sweden feasibility study
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1 Value guided healthcare as a platform for industrial development in Sweden feasibility study Conference presentation Gothia Forum, Göteborg Nov 6, 9
2 From cost focus towards value based health care Payers & Providers Unsustainable growth in healthcare spend Academia (992=00) Per capita HC exp 6 2,650 (992=00) HC Exp Per capita HC cost 6 2,250 (992=00) Per capita HC cost 6,850 HC Cost Wages HC Cost Wages Wages Value Per capita HC cost 6 Per capita HC cost 6 Per capita HC cost 6 (992=00) 3,50 (992=00) 5,35 (992=00) 3,50 HC Cost HC costs HC Cost Wages Wages Wages 00 Best possible 00 outcome Average nominal wage index Note: on basis of local currency; Per capita HC cost 6 at exchange rate of USD=0,797, 5: 0,22 Yen/US$ Source: OECD Health Data 8; EIU... at minimal cost Industry Source: BCG analysis
3 Clinical registries capture outcomes and clinical process Medical outcome data Example Swedish National HIp Arthroplasty Register Patient data Process data Functional outcome data History Registry started in 979 World's largest outcomes database for hip arthroplasty Web-based reporting in 999 Covering Nordic cases since 8 Patient experience data Coverage Patient coverage 96% in 7 Hospital coverage 00% in registrations in 7 Source: National Healthcare Quality Registries in Sweden 7; SKL; annual report; grant application 2
4 Outcomes transparency drives rapid improvements Example: Myocardial infarction Karlstad central hospital Before Ranked #43 of 73 hospitals Care cycle redone PCI - unit established Emergency care expanded to 24/7 coverage After Quality index 3 raised from to 8, 30-day mortality reduced by 50% Ranked #22 Halmstad hospital year mortality 20%, ranked #68 of 73 hospitals Care aligned with national treatment guidelines 2 New specialist departments for specific coronary conditions started Staffing improved Quality index raised from to 4 Mortality reduced by 50% Ranked #45. Percutaneous coronary intervention 2. on angiography and PCI 3. Riks-HIA Source: SVT.se; Aftonbladet ; DN ; Dagens Medicin ; Läkartidningen nr 44 vol. 04, 7; Värmlands Folkblad 0 Oct 7 3
5 Better quality of care without increasing payer cost Quality versus cost of healthcare in Swedish county councils 8 Cost/capita (SEK) 22,000 Norrbotten Gotland Västernorrland 20,000 8,000 Gävleborg Värmland Örebro Stockholm Jämtland Dalarna Skåne Västragötaland Uppsala Halland Kalmar Kronoberg Jönköping Västerbotten Sörmland Västmanland Östergötland 6, County council quality index Systemtic quality improvement work has delivered -3% annual cost savings per patient group Note: Cost including; primary care, specialized somatic care, specialized psychiatry care, other medical care, political health- and medical care activities, other subsidies (e.g. drugs) Source: Öppna jämförelser, Socialstyrelsen 8;Sjukvårdsdata i fokus 8; BCG analysis 4
6 Best practice sharing leads to treatment convergence Facilitates testing of value for new therapies Induced astigmatism through laser eye surgery, average and variance (# of dioptres ),5. Dipotre = measured as average change of dioptre per clinic based on individual patient data 2. CRP-C = reactive protein level in blood indicating level of inflammation. Lower level of CRP indicate lower level of inflammation short-term as well as lower risk for inflammation long-term 3. National coverage 56% while Falun coverage is 00% for all types of RA-patients. Since 997 Falun has measured and followed-up all its RA-patients on a monthly basis. Data has been used for regional quality work. Source: Cataract Annual Report 7; RA Annual Report , % of values 50% of values (separator indicates median for sample) 5
7 Five building blocks in the BCG recommendation ~25% of HC-costs already covered by registries A shared 0 year vision for Swedish healthcare Tax-funded healthcare costs Sweden, 7 (BSEK) 50 ~2% 25% 4% % % Inpatient Outpatient 2 Primary care 3 Psychiatry 4 Total Specialist somatic care Cost not captured by current registries Cost captured by current registries x% Share captured cost. Analysis based on KPP-data 2. Assumptions: Share captured same as for inpatient with adjustment for clinic coverage; for registries covering outpatient care, clinic coverage is same for inpatient and outpatient 3. Quality registries for diabetes, leg ulcer and heart failure cover primary care; assumptions: cost/patient and visit 0 SEK, 4 visits/year for diabetes patients; cost/patient and visit 0 SEK, 52 visits/year for leg ulcer patients; cost/patient and visit 4000 SEK, 4 visits/year for heart failure patients 4. Only existing quality register for psychiatry is eating disorder; assumption cost/patient and year 000 SEK; 355 patient registered in RIKSÄT 7 Note: Not including cost of pharmaceuticals, dental care, political activities and restructuring activities Source: KPP-database; SKL; annual reports for quality registries, grant applications to SKL; BCG analysis and estimates 4 Swedish healthcare system envy of world August 8, 209 In the past 0 years Sweden has emerged as the leading nation in value based healthcare and personalized medicine. Today, Swedish physicians and nurses work interactively with outcomes analysis and decision-support tools to deliver world-class healthcare results for their patients. The Swedish healthcare system displays several unique characteristics: Clinical researchers have access to some of the best data sources in the world. Many important clinical breakthroughs have been made over the last years by teams integrating comprehensive clinical outcomes data with high quality data from national population and cost registries. Swedish patients and their relatives are empowered to make informed care choices based on the quality of care. Outcomes information services provide transparent performance data for all providers in the country. Sweden is the fastest nation in the world in making valuable new drugs available to their population. The Swedish MPA (LV); the Dental and Pharmaceutical Benefits Agency (TLV) and clinical research competence centers work closely together to define how to best assess the value of conditionally registered products and efficiently determine appropriate reimbursement levels. Sweden is the pharmaceutical and medical technology industries' country of choice for conducting post-approval safety, efficacy, and cost-benefit studies. This has been one of the key factors that have enabled a reinvigoration of the Swedish life-science industry. In addition to the clinical benefits, focusing on value based healthcare has saved the Swedish taxpayer ~50 BSEK in reduced direct medical costs. No wonder Sweden is being flocked by researchers from other countries eager to learn how outcomes and cost measurements can lead to world class research and clinical care. 6 Striking a balance between central scale and local leadership Business case example: proposed investments with >0x payback in medical cost only next 0 years Backup Several functional areas to develop High level roadmap Population registries (EpC, SCB etc) Providers Universities Licensing (LV) Reimbursement (TLV) Industry.University Medical Center Source: BCG analysis Steering Committee SKL/Landsting TLV UMC rep SoS Registry rep Academia rep LV Patient rep Industry rep Executive body (initially PMO role) Competence Centers (~6) Data use Data analysis Facilitate best interface and services practice sharing services Information technology (IT) Quality Registries National oversight and coordination Strategy and policy definition Basic quality registry funding Central audit function Executive body for assessments, implementation, follow-up Data use interface and services Data analysis services Cooperation with other registries Facilitate best practice sharing IT infrastructure and support Coherence in data, metrics Metrics definition and data capture Registry management 7 BSEK Value based model driving annual savings of ~.5% in medical costs Based on benchmarks Source: SCB, BCG analysis % % Estimates of societal value at least ~3-5x higher than direct medical cost savings -5%...equaling >0x direct medical cost payback ~56 BSEK in total savings over 0yrs, while delivering higher quality of care Total required investment of ~5 BSEK over same period Registry funding, building competence, IT, etc. 0.8x multiple of money coming 0 years Estab. PMO PMO monitoring implementation process Exec. body permanent SC support tasks Est. Steering Committee Nat. framework for stakeholder partnering Governance Basic funding logic Establish additional CoCe Strengthening of existing CoCe Assess resource requirements Resource/ Map competence and registry gap competence Appoint new reg. team, strengthen exist development Gradual training / recruiting Def. framework Information Adapt providers to integrated solution according to timeplan for compliance technology (IT) Develop decision-support tools for integrated solutions Require primary care to report according to DRG Legal Revise law on patient data to allow real-time feedback. Program Management Office Source: BCG analysis 9 6
8 Value based healthcare - an emerging paradigm shift Pre Scientists Efficacy and safety Administrators Efficiency Clinicians Value Value = Outcome Cost Will enable needed transformational change across HC industry Source: Institute of Strategy and Competitiveness, Harvard Business School; BCG analysis 7
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