OCTOBER 10, 2019

Welcome to the Pay for Performance Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
the National Medical Home Summit, and the National MACRA MIPS/APM Summit

On Feeling Valued in a Value-Based World
Value is a fundamental theme in healthcare. In the usual context, value is determined through the equation of cost divided by quality. If cost rises and quality does not improve or worsens, then value decreases. Conversely, if cost decreases while quality remains the same or improves, then value increases. This value equation underlies the value-based purchasing or pay-for-performance model of healthcare reimbursement. Today's leaders are challenged to constantly improve the value of their clinical services through "doing more with less." Few would disagree that high-quality healthcare should be the goal and that we must lower healthcare costs to have a sustainable delivery model. However, there is also a cost if institutional strategies do not account for the real needs of frontline staff that enable the delivery of high-quality healthcare. Such misalignment can produce less-than-optimal outcomes as demonstrated in multiple studies in the literature that clearly link inadequate nurse staffing to patient morbidity and mortality, for example. (Nursing, September 2019)

Op-Ed: Humana Study Reveals $265 Billion Wasted on Health Care Each Year in the US

(CNBC, October 7, 2019)

To Extinguish Burnout, Bring Back Physician Autonomy
In his article, "Medical education needs to stop burning out students -- now," Augustine Choi suggests the culture of medical education is responsible for increasing numbers of depression and burnout among medical students, and suggests that more programs are needed to address self-care and wellness in order to build resilience. While I agree that mental health treatment should be readily available and easily accessible to those in need, I'd argue that medical students and physicians are already some of the most resilient individuals alive today. I submit the real cause of "burnout" or "moral injury" can be linked to the correlating rise of "health care" over the past 20 years. (Kevin MD, September 2019)

The Business Case for Patient Engagement
While some pharma companies have embraced patient engagement and pushed innovation, others have been wary of committing the resources to something that is not tried and tested, with no guaranteed return on investment. This article looks at three reasons why the business case for patient engagement is a strong one.

  1. Adherence pays off, and so does persistence

  1. Brand recognition pays off

Historically, significant engagement has not existed between patients and the pharmaceutical industry, between whom there has always existed a large level of detachment. Technology allows this gap to be bridged. The bridge is gradually being built by large tech firms, start-ups and policymakers. Pharma companies that embrace its construction can make it an immediate business case, be it through adherence/ persistence, brand recognition, or both. However, most importantly, they have the chance to use this bridge to deliver a future core of their business: digital medicines. (PMLiVE, October 3, 2019)

How to Improve Healthcare Improvement -- an Essay by Mary Dixon-Woods
As improvement practice and research begin to come of age, Mary Dixon-Woods considers here the key areas that need attention if we are to reap their benefits. In the NHS, as in health systems worldwide, patients are exposed to risks of avoidable harm and unwarranted variations in quality. But too often, problems in the quality and safety of healthcare are merely described, even "admired," rather than fixed; the effort invested in collecting information (which is essential) is not matched by effort in making improvement. The National Confidential Enquiry into Patient Outcome and Death, for example, has raised many of the same concerns in report after report. Catastrophic degradations of organizations and units have recurred throughout the history of the NHS, with depressingly similar features each time. More resources are clearly necessary to tackle many of these problems. There is no dispute about the preconditions for high quality, safe care: funding, staff, training, buildings, equipment, and other infrastructure. But quality health services depend not just on structures but on processes. Optimizing the use of available resources requires continuous improvement of healthcare processes and systems. (The British Medical Journal, October 1, 2019)

Pharmacists Provide Patient Value in Team-Based Care
With inhaler in hand, Dr. Cheng Yuet went over every detail to make sure the patient understood how the drug would control their COPD symptoms. "Use it every day, whether you feel like you need it or not," she urged. Dr. Yuet is proving what a difference it makes when pharmacists are integrated into the health care team. As part of an innovative model being used at UNT Health Science Center, Dr. Yuet and three other pharmacists manage the care of patients with chronic diseases such as asthma, diabetes and hypertension. "Our scope is pretty broad, which is unique in pharmacy," Dr. Yuet said. "As part of the health care team, our pharmacists can prescribe, change and refill medications; order laboratory tests; and schedule in-person or telephone visits for chronic disease state management." Many patients are unfamiliar with seeing a pharmacist in this role, Dr. Yuet said. "It is important for patients to have awareness of how a pharmacist could help them reach their treatment goals alongside their physician or advanced practice nursing providers," she said. The model has been shown to improve outcomes for patients whose chronic diseases make care complex. Patients who are referred to pharmacist visits might take more than a dozen medications daily. Success has also been realized in terms of quality, collaboration and financial sustainability. (MedicalXpress, October 8, 2019

The Key to Success in Value-Based Care: Cleveland Clinic's Chief Managed Care Officer Weighs In
As hospitals and health systems move toward value-based payment models, they face various challenges to ensure such models will help the organization reduce costs while improving the quality of patient care. That's why Cleveland Clinic will host a Value-Based Innovation Summit Oct. 21-23, at the Global Center for Health Innovation in Cleveland. During the summit, thought leaders in value-based care redesign and payment reform will discuss topics including best practices in payer-provider partnerships; value-based perspectives from managed care executives and purchasers; the international shift from fee-for-service to value-based care; and successful value-based clinical care and innovative care models, according to a news release. Doug Chaet, chief managed care officer of Cleveland Clinic, said the event is a great opportunity for organizations to gain insight into those issues. Here, he talks about the summit and healthcare value-based care efforts in general. (Becker's Hospital CFO Report, October 7, 2019)

Waste in the US Health Care System


Importance The United States spends more on health care than any other country, with costs approaching 18% of the gross domestic product (GDP). Prior studies estimated that approximately 30% of health care spending may be considered waste. Despite efforts to reduce overtreatment, improve care, and address overpayment, it is likely that substantial waste in US health care spending remains.

Objectives To estimate current levels of waste in the US health care system in 6 previously developed domains and to report estimates of potential savings for each domain.

Evidence A search of peer-reviewed and "gray" literature from January 2012 to May 2019 focused on the 6 waste domains previously identified by the Institute of Medicine and Berwick and Hackbarth: failure of care delivery, failure of care coordination, overtreatment or low-value care, pricing failure, fraud and abuse, and administrative complexity. For each domain, available estimates of waste-related costs and data from interventions shown to reduce waste-related costs were recorded, converted to annual estimates in 2019 dollars for national populations when necessary, and combined into ranges or summed as appropriate.

Findings The review yielded 71 estimates from 54 unique peer-reviewed publications, government-based reports, and reports from the gray literature. Computations yielded the following estimated ranges of total annual cost of waste: failure of care delivery, $102.4 billion to $165.7 billion; failure of care coordination, $27.2 billion to $78.2 billion; overtreatment or low-value care, $75.7 billion to $101.2 billion; pricing failure, $230.7 billion to $240.5 billion; fraud and abuse, $58.5 billion to $83.9 billion; and administrative complexity, $265.6 billion. The estimated annual savings from measures to eliminate waste were as follows: failure of care delivery, $44.4 billion to $93.3 billion; failure of care coordination, $29.6 billion to $38.2 billion; overtreatment or low-value care, $12.8 billion to $28.6 billion; pricing failure, $81.4 billion to $91.2 billion; and fraud and abuse, $22.8 billion to $30.8 billion. No studies were identified that focused on interventions targeting administrative complexity. The estimated total annual costs of waste were $760 billion to $935 billion and savings from interventions that address waste were $191 billion to $282 billion.

Conclusions and Relevance In this review based on 6 previously identified domains of health care waste, the estimated cost of waste in the US health care system ranged from $760 billion to $935 billion, accounting for approximately 25% of total health care spending, and the projected potential savings from interventions that reduce waste, excluding savings from administrative complexity, ranged from $191 billion to $282 billion, representing a potential 25% reduction in the total cost of waste. Implementation of effective measures to eliminate waste represents an opportunity reduce the continued increases in US health care expenditures.

(Journal of the American Medical Center, October 7, 2019)

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Mini Summit I: The Model Matters: As Providers Assume Risk, the Value of Care Increases

Bill Barcellona, MHA, JD
Senior Vice President, Government Affairs, America's Physician Groups; Adjunct-Associate Professor, School of Planning, Policy & Development, University of Southern California; Former Deputy Director, California Dept. Managed Health Care, Sacramento, CA

Jeffrey A. Rideout, MD, MA, FACP
President and Chief Executive Officer, Integrated Healthcare Association, Oakland, CA (Moderator)