Value Based Purchasing Two formulas V=Q/C Value equals quality - - PowerPoint PPT Presentation

Value Based Purchasing

Two formulas

 V=Q/C

 Value equals quality divided by cost

 O=S+P

 Outcome equals structure plus process

V=Q/C

 What is value in health care?

 How is Quality measured?  How are Costs measured?

 Is our current system delivering value to those that require services?

Quality

 Does our heath care system provide the attributes that people desire in their care?

 When sick  When well

Sick Care

What do people want? 1 Don’t kill Don 2 Don’t hurt Don 3 Reduce Don’s pain 4 Don’t make Don feel helpless 5 Don’t make Don wait 6 Don’t waste Don’s money

(See “my right knee” on YouTube, also Annals of Internal Medicine 2005)

So, how are we doing with Sick Care?

 98,000 deaths annually as a result of medical error**  Rate of adverse events in hospitalized patients 2.9-3.7% of patients**  36% of patients complain of inadequate pain control*  55.4% of patients felt their wishes were not adequately considered*  38.5% felt it took too long for their call light to be answered*  $19.5 Billion in costs due to medical error **

** IOM 1999 *NRC Picker 2015 teaching hospital average

Wellness Care

What do people want? Disease prevention Health Promotion

So, how are we doing with Disease Prevention?

Adherence to Quality Indicators, Overall and According to Type of Care and Function.

McGlynn EA et al. N Engl J Med 2003;348:2635-2645.

So, how are we doing with health promotion?

CDC, Behavioral Risk Survey System

OK, we have some opportunities in Quality, what about cost?

Does high quality care necessarily cost more?

Probability of Death for Boys and Men 15 to 60 Years of Age in Sweden, Australia, and the United States, 1970–2007.

Murray CJ, Frenk J. N Engl J Med 2010;362:98-99.

V=Q/C

http://www.brookings.edu/~/media/Research/Files/Reports/2009/8/21-bpc- qualityreport/0821_bpc_qualityreport.PDF

 Structure

 Physical Facilities  Equipment  People  Training  Payment Methods  Process - Healthcare delivery  Diagnosis  Treatment  Preventive Care  Patient Education

 Measures of Process are nearly equal to measures of quality of care

Outcomes = Structure + Process

So what is changing with value based purchasing?

 Payment Methods

 Move away from fee-for-service piece work to global fee for population served  No additional payment for complications

 Process Measures

 Was needed care provided? – reduction of underuse  Was care not indicated provided? – reduction of overuse

Current Trials

 Affordable Care Organizations  Patient Centered Medical Homes  Giesinger and other large health systems  Insurance company trials (inclucing BCBS Kansas City)

Maeng, D. D., Khan, N., Tomcavage, J., Graf, T. R., Davis, D. E., & Steele,

• G. D. (2015). Reduced

Acute Inpatient Care Was Largest Savings Component Of Geisinger Health System’s Patient- Centered Medical

• Home. Health Affairs,

34(4), 636–644.

Questions?