By Kresimir Peharda
There is agreement around the idea that U.S. healthcare is extremely expensive and not the highest quality for large segments of the population. What people disagree on is how to fix it. While there are many reasons why U.S. healthcare is expensive and relatively low quality some critics have argued that misalignment as a result of the fee for service model and fragmented services are to blame. Fittingly, one solution that is just now getting the attention it deserves is the quality improvement model.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
The inspiration for quality improvement redesign comes from other industries such as manufacturing. The basic idea is to use process mapping to reshape workflows while incorporating performance measures as a benchmark to ensure cost-savings. Federal government efforts in this area are the result of the Affordable Care Act of 2010 and take the form of the accountable care organization.
In the private sector a similar but employer-driven model called a healthcare marketplace collaborative has been in use since 2004. Over the last few years health care marketplace collaboratives have sprung up in cities across the U.S. from Atlantic City to Seattle in response to the cost and inefficiency of the current system. Such care collaboratives bring together stakeholders that often do not communicate with each other and sometimes have opposing financial interests. Collaboratives typically include a large employer (and a union in some cases), at least one provider, and an insurer.
Virginia Mason Medical Center developed the model for the healthcare marketplace collaborative in 2005. The Virginia Mason model traces its origins to the Toyota Production System and has 3 elements. First, employers use their purchasing power to specify the health care services they need and the quality standards they require. Specifically, the collaborative determines the conditions of greatest cost, both direct and indirect, to the employer, using the employer’s claims data. Second, employers use their purchasing power with health plans to ensure payment for quantifiable quality of care and not for unnecessary care. Third, employers receive performance measurements that employers can then use to purchase services that meet their requirements.
The Virginia Mason model has 5 performance measures: 1. same day access, 2. 100 percent patient satisfaction, 3. evidence based care (aka mistake-proofing), 4. absence management, and 5. affordable price for purchasers and providers.
Two critical elements to achieving improved efficiency and cost savings are workflow mapping and use of evidence based medicine. In workflow mapping the care pathway a patient follows in receiving care for a condition is defined and mapped. Evidence based care relies on the scientific method to determine which treatment or tests are the most relevant for a physician treating a specific condition. At Virginia Mason, for example, no value diagnostic imaging was eliminated from physician order sets so that the physicians can only select imaging options that produce high value results.
Virginia Mason’s back pain clinic was one of the earliest tests of the collaborative model. An analysis by the Center for Healthcare Solutions at Virginia Mason revealed that the clinic’s utilization of diagnostic tests (MRIs) was 33 percent lower than peers, and utilization of physical therapy was 40 percent less than peers. The time needed to complete treatment was reduced by 67 percent. Patients in the back pain clinic missed on average 4.3 days of work compared to 9 days of work for patients treated by other local providers. Analysis of Aetna claims data revealed that, for uncomplicated back pain cases, the cost to employers decreased from 5 percent above marketplace to 9 percent less than peers.
More recently Intel partnered with Providence Health & Services, Tuality Healthcare and Cigna to create a care collaborative in Hillsboro, Oregon. The motivation was straightforward given that Intel’s employee health costs were rising by more than 10 percent a year.
The problems that the collaborative sought to address were: 1. poor patient intake, 2. delays in access to care, and 3. poor quality. The consequences of these problems were increased healthcare costs and decreased employee productivity.
To address these issues the collaborative developed clinics and standardized workflows for common conditions such as back pain. Intel opened two onsite medical clinics at its campuses in the Hillsboro area. Each clinic offers employees comprehensive services including full-service primary care, pharmacy, nurse practitioners, physical therapy, lab and health coaches.
The results have been very promising. According to Kaiser Health News, patients with routine back pain now see a physical therapist within 48 hours of calling, compared with about 19 days previously. They complete their treatment in 21 days, compared with 52 days in the past. The cost per patient has dropped a minimum of 10 percent up to 30 percent due to fewer unnecessary doctor visits and diagnostic imaging tests. Patient satisfaction increased and days of work missed decreased. Intel claims to have saved $2 Million as a result.
Given how big a cost healthcare is to employers it makes sense for more employers to reexamine their healthcare spending. The healthcare marketplace collaborative is an attractive model for those purchasers willing to assume an active role in reshaping healthcare delivery for their employees.
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