NAPLES, Florida – Among a series of thought-provoking presentations during last week's annual meeting of the Advanced Medical Technology Association (AdvaMed; Washington), perhaps the most interesting – and the most likely to stir follow-on debate – was that of Elizabeth Teisberg.
Associate professor at the Darden Graduate School of Business at the University of Virginia (Charlottesville), and co-author of a forthcoming book, “Redefining Health Care: Creating Positive-Sum Competition to Deliver Value,“ Teisberg issued an impassioned plea for thinking differently about U.S. healthcare and altering its forms of competition.
In her presentation, she roundly lambasted the current system, saying that it is shot through with “paradoxes“ including the wrong kinds of competition, and that it is too often based on treating discrete conditions and paying for the use of discrete procedures rather than rewarding successful patient outcomes.
Most needed in the system, Teisberg said, is “value-based competition to drive improved results over the full cycle of care.“ And “value for patients, not lowering costs, should be the focus“ – with that then resulting in lower costs.
Calling for a “new way of thinking“ about healthcare delivery, she said that its true value should be measured by what happens to patients, with patient outcomes broadly publicized in order to drive out poor performers. And she charged that the “root causes“ of poor healthcare come from “dysfunctional competition at the wrong levels.“
As a basis for her comments she cited two foundational needs: “universal coverage [as] critical for equity – and competitive economic reasons as well“; and “a basic coverage list set by medical experts, not just a recommendation.“
These, she said, offer the basis of determining how well different systems are delivering care, and broad dissemination of this information would enable patients to make informed choices.
One of the key paradoxes of U.S. healthcare, Teisberg said, is that it features “more competition than virtually any other healthcare system in the world,“ but the too-frequent results include “over-use“ of care, standards of care and best practices slow to develop, and both “common“ errors in diagnosis and “preventable treatment errors.“
Among other key points:
- The current system, she said, is “structured around cost reduction and denying claims“ which adds to “administration and hassles.“ And she estimated up to 50% of healthcare costs are for the resultant waste. Rather than “value-increasing,“ this produced “zero-sum competition to shift costs . . . capture patients and restrict choice.“
- The best form of competition, she said, would “center on medical conditions over the full cycle-of-care“ to provide the best results for patients. As examples, she recommended that dialysis patients should see a nephrologist “before their first treatment“ – which they don't – and back fusion surgery more frequently avoided with earlier physical therapy treatment.
- “Good quality [of care] is more efficient, not more expensive,“ while the current system encourages poor care by rewarding more procedures. “The good or product here is not treatment but health,“ she said.
- “Information on results – [healthcare] outcomes and prices – needed for value-based competition must be widely available,“ she emphasized, citing the public reporting of cardiac surgery data as resulting in “dramatic improvements“ in this arena. “Fear of measurement is backwards,“ she said. And the best results come from “accumulated experience.“
- Critically, she said that the value-based competition she espouses should be “regional and national, not just local . . . the best in the nation or world, not the best on the block.“
- And providing sweet music to the ears of meeting attendees, she said that “innovations that increase value must be actively encouraged and strongly rewarded.“
Specifically targeting her device-oriented audience, she offered some clear recommendations for this community.
Device makers should compete “not for market share but to improve the full cycle of care,“ she said, as an example citing the standardization of anesthesia valves and hoses and creating different packaging for different drugs, thus greatly reducing surgical deaths.
“As device manufacturers, you want to ensure that devices are embedded in the right delivery processes. You want to demonstrate value based on careful studies of long-term costs results vs. alternative therapies.
And, “You want to work with providers who report results that they are actually measuring“ and that have the necessary “accumulated experience“ to provide “the penetration“ of that experience.
This, she said, produced a quality cycle: rising efficiency and better clinical data, leading to more fully dedicated teams and more tailored facilities, providing greater leverage in purchasing, thereby encouraging greater capacity in sub-specialization and wider capabilities in the care cycle, offering opportunities for more measurement and faster innovation with better results, thus producing an improved reputation and leading back to deeper penetration of experience.