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OPTIMIZING VALUE

CONTEXT

Despite the fact that the United States spends twice as much per capita on medical services as any other developed nation—and 50% more than the second-highest spending nation—its health performance ranks below the top 24 among the community of all nations. This is broadly attributed to financial incentives and system fragmentation that promote volume over value, resulting in unneeded services, inefficient care delivery, high prices, administrative waste, and missed prevention opportunities. In this context, addressing value entails transforming the relationship between health improvement, patient preferences, and economic investment. Optimizing value entails maximizing positive health outcomes while minimizing the costs associated with achieving those outcomes, notably through research and service provision. With PCORI’s new authorizing legislation comes the opportunity to undertake research on different manifestations of value through the eyes of the patient, as measured via better outcomes, reduced burden, and other monetary and non-monetary costs of receiving care.

COMPELLING RESEARCH QUESTIONS

Value optimization holds potential for discovery, innovation, and research. In aligning incentives with optimal health outcomes, value-centric health system models are natural drivers of continuous learning. The ongoing pursuit of value—as a multidimensional, individually dependent concept—will necessitate constant innovation in health system infrastructure, delivery practices, patient engagement, and interventions with regard to individual and population health. To that end, several critical research questions emerge:

• In what ways does the current health and health care system create or impede value for different stakeholders across the care continuum?
• What would a “value optimized health and health care system” look like to patients and other stakeholders across the care continuum?
• In pursuing “value optimization,” how would relevant initiatives balance costs of care with patient-centered outcomes, patient and family goals, societal values, and progress?
• What would it take to achieve patient-centered value optimization?

DISCUSSION HIGHLIGHTS

At the March meeting, David Muhlestein, Ph.D., J.D., Chief Strategy and Chief Research Officer for Leavitt Partners, provided an overview presentation on optimizing value. Dr. Muhlestein set the context by describing essential data points related to U.S. health care spending, as well as health care’s dominant role in the economy, and the projected viability of the Medicare Trust Fund. Given this context, he then described the advent of value-based care as a chief mechanism for transforming the structure and financing of health care. It has been relatively successful as a lever to reconsider opportunities for coordinating care and building resiliency into the system through financial resiliency, although it has concentrated on payment reform, rather than complete delivery system reform. To this end, Dr. Muhlestein contrasted “Little v value,” which focuses more incrementally on improving the clinical encounter, and “Big V value,” which goes beyond improving the encounter with the patient to transforming the entirety of care delivery at a population level. He observed that the health care system will only attain Big V value by removing silos to look at the entire care delivery spectrum holistically and used the analogy of putting health care on a diet, stating that it is not enough to simply “change the items on the buffet,” instead, there is a need to “change the restaurant.” Dr. Muhlestein concluded with provocations related to system change and the need to rebuild health care on something other than a fee-for-service chassis. He encouraged a new worldview built around patients’ needs and intrinsic capacity to achieve health and wellbeing. In contrast to the current capacity-focused business model (identify the best paid services, build capacity for those services, fill that capacity), the three components of patient-first business model would be to identify patients’ needs, priorities, values, and attributes; build low-priced services to fulfill needs; and prevent high-cost care. This, he acknowledged, is difficult work that will take a generation to bear fruit, but observable changes would take hold in 5 to 10 years if the work starts immediately.

In a generative breakout discussion, participants raised other concepts, including development of readily usable measures that define value and identification of best practices to optimize value for patients. PCORI’s expanded remit to study economic impact along with other non-financial costs of care was viewed as a positive disrupter and key opportunity and could intersect with efforts to improve methodology and measurement related to social determinants of health (e.g., better understanding of financial toxicity and burdens of health care and the disproportionate impact on vulnerable/under-resourced populations). A number of obstacles were discussed, including incentive structures dominantly aimed at increasing service volume rather than patient outcomes, and a prevailing business model and governance structures oriented to profit margins. In addition, the pressure of increasing expenditures for health, in particular, from public revenue sources, diminishes funding for other critical investments in education, housing, and other health-related social needs. Participants offered that framing value in health care as a public health emergency, or framing health care transformation as a common social good, might help shift the prevailing narratives that more care equals better care, or that higher costs equal higher quality. The group agreed that PCORI could exploit the opportunity to develop a balanced portfolio of robust research that analyzes both value and burden at both the individual and the community level.

The breakout group’s insights sparked additional discussion at the March meeting that the concept of value through the eyes of the patient is not well understood. Hence, in the second meeting in April, special focus was given to this dimension. A panel discussion at the April meeting debated types of changes that might improve the value that patients derive from health care. A centerpiece of the discussion was the role of payment models and other influences on health improvement. The roles of primary care, transition to value-based care, and fragmentation across specialties were all discussed. A participant observed that fragmentation means that each specialty has a different business model, metrics, and incentives than does primary care. They observed that viewing this through the patient’s eyes is pivotal, because many patients have long journeys, numerous providers, and the need for coordinated care. Developing a better understanding of this journey could yield shared knowledge about what works best for whom. Thus, participants urged consideration of ways to achieve widespread change outside of reforming payment models. Among the suggestions were to study the impact of accreditation, regulation, and education; rapid adoption of care models (e.g., telehealth); and effectiveness of newer care models in delivering value for different subgroups. Identifying ways to forge a complete shift from a transaction mindset in health care to one based on interaction and trust was seen as a research gap that PCORI could fill—providing evidence on the role of trusting relationships in support of better outcomes, experience, and value.

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