Value-Based Health Care Delivery: Creating an Action-Research Agenda
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1 Delivery: Creating an Action-Research Agenda Professor Michael E. Porter Harvard Business School START July 15, 2014 This presentation draws on Porter, Michael E. and Thomas H. Lee. The Strategy that Will Fix, 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, Harvard Business Review, September 2011; Porter, Michael E. What is Value in and supplementary papers, New England Journal of Medicine, December 2010; Porter, Michael E. A Strategy for Reform Toward a System, New England Journal of Medicine, June 2009; Porter, Michael E. and Elizabeth Olmsted Teisberg. Redefining : Creating Results. (2006) Additional information about these ideas, as well as case studies, can be found at the Institute for Strategy and Competitiveness Redefining website at 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.
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3 U.S. 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 the wrong things leads to a zero-sum competition with no or negative value Comprehensive Deck
4 Comprehensive Deck
5 Solving the 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 5
6 Creating a 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 6
7 Getting Unstuck Legacy System System Agenda 1 Organized Around Specialties and Departments, with Private Practice Physicians 1 Organize into Integrated Practice Units (IPUs) 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 6 Build an Integrated Information Technology Platform 4 Each Hospital or Service Offers a Full Line of Services 3 Fee-For-Service Payments Based on Volume 7of Services Delivered 4 Integrate Care Delivery Systems 3 Move to B Payments Cycl
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9 Value Based Case Studies Case Study MD Anderson Cancer Center: Interdisciplinary Cancer Care Medical Condition Location Specialty IPUs Primary Care Outcome Measurement TDABC Bundled Pricing System Geographic Integration Expansion Head and Neck Cancer, X X Endocrine Cancer Houston The West German Headache X X Center: Integrated Migraine Care Migraine Germany Commonwealth Care Alliance: Elderly and Disabled Care Pitney Bowes: Employer Health Strategy Ledina Lushko: Navigating Health Care Delivery Michelin Employee Health Strategy* Primary/ Preventative X X X Care Boston Primary/ Preventative X X Care US Adrenal Cortical X X X X Carcinoma Chicago Diabetes Care The Joslin Diabetes Center Diabetes Care Boston X Gastroenterology Care at Sweden s Highland Hospital Role of Payors South X X Carolina Inflammatory Bowel X X Disease Sweden Great Western Hospital: High Risk X X Pregnancy Care High Risk Pregnancy UK Brigham and Women's Shapiro X Cardiovascular Center Cardiovascular Care Boston Martini Klinik: Prostate Cancer X X X X Care Prostate Cancer Germany Dartmouth Hitchcock Medical X X Center: Spine Care Spine Care NH Schon Klinik Eating Disorder Care Eating Disorders Germany 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
10 Value Based Case Studies continued Case Study Medical Condition Location Specialty IPUs Primary Care Outcome Measurement TDABC Bundled Pricing ESRD, Kidney UCLA: Kidney Transplantation Transplantation Los Angeles X X X In Vitro Fertilization: Outcomes Measurement Infertility, IVF US X X Plastic, Oral and Boston Children s Hospital TDABC Orthopedic Surgery Boston X X X Schon Klinik: Measuring Cost Total Knee and Value 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 System Geographic Integration Expansion Obesity, X X X X Bariatric Surgery Sweden The Cleveland Clinic: Growth X X X X Strategy Health System Cleveland ThedaCare: System Strategy Health System Wisconsin X X X Children's Hospital of Philadelphia: Network Strategy Health System Philadelphia X X Region Reconfiguring Stroke Care in X X North Central London Stroke UK Role of Payors 10
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12 Harvard Courses Value Based Delivery Courses and Lectures for Executives Seminar in Delivery (1 week full-time) Total of 602 participants Leadership Workshop on Strategy for Delivery (2 days) Total of 381 participants Partners HealthCare Value Based Seminar for Residents and Fellows (3 days) Total 200 participants Value Measurement in (2 days) Total of 333 participants External Courses Innovation (University of Virginia, ~450 total participants) Executive Workshops (Brigham and Women s Hospital, St. Francis Hospital, Hoag Hospital, Baylor Health, G.E., Cigna, Humana total of ~900 participants) Global Health Delivery (Harvard School of Public Health, ~80 participants) Medical Care and the Corporation (Dartmouth, ~150 participants) Management (University of Virginia, ~100 participants) UCLA Strategy for Delivery (~90 participants) Medicaid Leadership Institute (85 participants) June 2011 Strategy for Delivery: United Kingdom (80 participants) March 2012 AAOS Enhancing Value in Musculoskeletal Care Delivery (125 participants) Fall 2013 Dartmouth Masters in Delivery Science (50 participants) Fall 2013 Executive Workshop Philips (70 participants) Spring 2014 Value Based Delivery Leadership Program: Texas Medical Center (83 participants) 12
13 What is Value in? (NEJM) 13
14 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) 14
15 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) 15
16 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) 16
17 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course 17
18 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows ICHOM is founded How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course 18
19 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows German Health- Care (with Clemens Guth) ICHOM is founded How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course 19
20 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows German Health- Care (with Clemens Guth) ICHOM is founded How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course Redesigning Primary Care (Health Affairs) 20
21 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows German Health- Care (with Clemens Guth) ICHOM is founded How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course Global Health-Care Delivery, (with Jim Yong Kim and Paul Farmer, The Lancet) Redesigning Primary Care (Health Affairs) 21
22 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows German Health- Care (with Clemens Guth) ICHOM is founded The Strategy to Fix, (with Thomas Lee, HBR) How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course Global Health-Care Delivery, (with Jim Yong Kim and Paul Farmer, The Lancet) Redesigning Primary Care (Health Affairs) 22
23 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows German Health- Care (with Clemens Guth) ICHOM is founded The Strategy to Fix, (with Thomas Lee, HBR) How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course Global Health-Care Delivery, (with Jim Yong Kim and Paul Farmer, The Lancet) Redesigning Primary Care (Health Affairs) How to pay for (with Bob Kaplan) 23
24 Collaboration with Bob Kaplan Begins, What is Value in? (NEJM) Value Based Seminar for Residents and Fellows German Health- Care (with Clemens Guth) ICHOM is founded The Strategy to Fix, (with Thomas Lee, HBR) How to Solve the Cost Crisis in Health Care, (with Bob Kaplan, HBR) Value Measurement Executive Course Global Health-Care Delivery, (with Jim Yong Kim and Paul Farmer, The Lancet) Redesigning Primary Care (Health Affairs) How to pay for (with Bob Kaplan) 24
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