Provider payment strategies to improve health

Value-based provider payment: towards a theoretically preferred design

The case for improving health is related, among many things, with the incentive structure of the whole system (people, professionals and providers). If we focus our aim towards providers, then we need to reassess current flaws in the system, and ask what do we have to do. A new article tries to address these issues.

In order to tackle the problems related to current payment methods, worldwide, policymakers and purchasers of care are exploring alternative payment strategies to help steering health care systems towards value . A well-known endeavour in this regard is pay-for-performance (P4P), in which providers are explicitly rewarded for ‘doing a better job’. Although P4P is an appealing idea, explicit financial incentives for value should in principle be used only modestly in provider payment methods because of the multitasking problem. Therefore, it is not surprising that in practice, the majority of provider revenues (typically referred to as the base payment) is not explicitly linked to value. This base payment, however, does create implicit (dis)incentives for value, because each payment method influences providers’ behaviour through incentives

The article reflects  a conceptual framework of key components and design features of a theoretically preferred Value Based Payment method. And the key message:

We conclude that value is ideally conceptualised as a multifaceted concept, comprising not only high quality of care at the lowest possible costs but also efficient cooperation, innovation and health promotion. Second, starting from these value dimensions, we derived various design features of a theoretically preferred VBP model. We conclude that in order to stimulate value in a broad sense, the payment should consist of two main components that must be carefully designed. The first component is a risk-adjusted global base payment with risk-sharing elements paid to a multidisciplinary provider group for the provision of (virtually) the full continuum of care to a certain population. The second component is a relatively low-powered variable payment that explicitly rewards aspects of value that can be adequately measured.

I fully agree on what they say. Close politicians and officials should take this message into consideration regarding the next primary care physicians' strike, and forget current confusing approach.

Norman Rockwell 

TIRED SALESGIRL ON CHRISTMAS EVE

Estimate $5,000,000 — 7,000,000

(It may be yours, upcoming auction at Sotheby's)

Living with dementia

Care Needed. Improving the lives of people with dementia

Across the OECD, nearly 19 million people are living with dementia. Millions of family members and friends provide care and support to loved ones with dementia throughout their lives. Until a cure or disease-modifying treatment for dementia is developed, the progress of the disease cannot be stopped. 

We all know cases of close relatives with dementia, and we understand the suffering that surrounds the disease. OECD has made a good job coping with this difficult topic.
These are the three key chapters:

• Identifying people with dementia 
• Helping people with dementia live well in the community 
• Health and long-term care services for advanced dementia are poor

As people live at home longer, communities need to be better equipped to meet the needs
of people living with dementia. Post-diagnostic care pathways can help connect people with dementia and their families with available services. But communities themselves must also adapt: community-friendly initiatives that train local populations and businesses to respond more effectively to people with dementia can help to reduce stigma around dementia while making the environment safer and more welcoming. Aging at home also means that informal carers will play an important role in supporting people with dementia. Informal carers should receive the support they need, and governments should assess whether existing services for carers are also adequate for carers of people with dementia, who may have unique needs.

Definitely, every country needs to develop a strategy for this disease. Catalonia has already defined its strategy, though resources are not enough.

Jaume Plensa at Madison Square Park

Next generation sequencing is knocking at the door (and the door is open)

Genetic testing: Opportunities to unlock value in precision medicine
Next-Generation Sequencing to Diagnose Suspected Genetic Disorders
Documento de consenso sobre la implementación de la secuenciación masiva de nueva generación en el diagnóstico genético de la predisposición hereditaria al cáncer

This week I've been reading three pieces on the same topic. First, a McKinsey insight on genetic testing, second a NEJM basic article that reviews the whole state of the issue, and third a consensus by three societies on how to implement next generation sequencing .
All of them are required reading for anyone interested in the topic. You'll notice that technology is knocking at the door and we do need to understand how to manage it. Otherwise it will enter anyway (without knocking) and then it will be more value extraction (by others) than value creation (for patients).
Unfortunately, what you'll not find in these articles is how to manage the introduction of the technology with organizational patterns, allocation and coordination of tasks and decisions. If you want some clues on this, read my previous post on Geisinger, they are applying what it seems to me the most appropriate perspective.

Sense Sal-Fins que surti el sol

The Cost of End-of-Life Care

The Myth Regarding the High Cost of End-of-Life Care
Systematic review of high-cost patients’ characteristics and healthcare utilisation

The size of the healthcare costs at the end of life is properly reflected in this article (forget exaggerations):

We estimated that in 2011, among those with the highest costs, only 11% were in their last year of life, and approximately 13% of the $1.6 trillion spent on personal healthcare costs in the United States was devoted to care of individuals in their last year of life.

Longitudinal analyses of spending show that the population with the highest annual health care costs can be divided into 3 broad illness trajectories:

• individuals who have high health care costs because it is their last year of life (population at the end of life), 
• individuals who experience a significant health event during a given year but who return to stable health (population with a discrete high-cost event and,
• individuals who persistently generate high annual health care costs owing to chronic conditions, functional limitations, or other conditions but who are not in their last year of life and live for several years generating high health care expenses (population with persistent high costs).

Understanding individual costs is a required step for the analysis and improvement of healthcare delivery. Unfortunately it is a marginal practice. For a systematic review, check this article.

‘Windrush: A Celebration’, Barbican,

London, November 17, barbican.org .uk

Pharmarketing impact on prescribing behaviour

Influence of pharmaceutical marketing on Medicare prescriptions in the District of Columbia

Gifts from pharmaceutical companies are believed to influence prescribing behavior, but few studies have addressed the association between industry gifts to physicians and drug costs, prescription volume, or preference for generic drugs

Governments in USA and EU have enacted laws for greater transparency of the relationship between pharma firms and physicians. Unfortunately evidence is limited about the concrete impact of gifts on physicians prescribing decisions.
This article sheds light on the issue and its conclusions say:

In 2013, 1,122 (39.1%) of 2,873 Medicare Part D prescribers received gifts from pharmaceutical companies totaling $3.9 million in 2013. Compared to non-gift recipients, gift recipients prescribed 2.3 more claims per patient, prescribed medications costing $50 more per claim, and prescribed 7.8% more branded drugs. In six specialties (General Internal Medicine, Family Medicine, Obstetrics/Gynecology, Urology, Ophthalmology, and Dermatology), gifts were associated with a significantly increased average cost of claims. For Internal Medicine, Family Medicine, and Ophthalmology, gifts were associated with more branded claims. Gift acceptance was associated with increased average cost per claim for PAs and NPs. Gift acceptance was also associated with higher proportion of branded claims for PAs but not NPs. Physicians who received small gifts (less than $500 annually) had more expensive claims ($114 vs. $85) and more branded claims (30.3% vs. 25.7%) than physicians who received no gifts. Those receiving large gifts (greater than $500 annually) had the highest average costs per claim ($189) and branded claims (39.9%) than other groups.

If gifts from pharmaceutical companies are associated with more prescriptions per patient, more costly prescriptions, and a higher proportion of branded prescriptions, then all of us as patients have to be concerned. And my impression is that regulation is not enough. Maybe one day the doors of  physician offices will reflect current pharma payments to the patients. Right now they have to look at the web.
Beyond this, I suggest you check this news and you'll see the current flaws between pharma and research.

Museu Picasso. Barcelona

The "secret sauce" of Kaiser Permanente

Financing and Payment Strategies to Support High-Quality
Care for People with Serious Illness: Proceedings of a
Workshop

A recent report by NASEM explains in one paragraph what is the key factor of succesful Kaiser Permanente model:

The “secret sauce” that enables Kaiser Permanente to deliver high quality care, explained Annet Arakelian, executive director of Medicare strategy and care delivery at Kaiser, is the way it has aligned its revenues and expenses. Kaiser’s revenue comes from the Kaiser Foundation health plan that collects premiums from groups, individual members, and some prospective contracts with government payers. Expenses go through a hospital
service agreement with Kaiser Foundation hospitals and a capitated medical service agreement with the Permanente Medical Groups that employ the physicians who work at Kaiser hospitals and clinics. The hospitals and foundation are nonprofit organizations, while the medical groups are for profit agencies with their own board of directors and governance processes. Incentives are aligned across the hospitals, health plan, and medical groups on quality metrics, as well as financial and regulatory initiatives.

Great definition. This is the ingredient for success. And you'll understand why it is so difficult to replicate in a private world with vested interests between different stakeholders: insurers and providers. The nonprofit element of the foundation and hospitals is crucial.

Second statement. Regarding the report on how to pay for serious illness:

Susan Wang, regional lead for shared decision making at the Southern
California Permanente Medical Group, explained that Kaiser’s approach to
comprehensive financing of serious illness care begins with a population
health perspective, which stems from the capitated arrangement that features
a fixed payment per person enrolled in its medical groups. “Because
we are capitated, we are accountable for our entire membership, it behooves
us to touch our patients at every opportunity,” said Wang

Summary: Kaiser has a patient centered strategy. Finance follows the patient not the specific illness. Great. Agree.

The media and the Theranos incredible deception

On Theranos failure, highly recommended for journalists.
From CBSNEWS, a basic piece to understand the power of the media in creating and destroying (false) value:

Was the media duped by Elizabeth Holmes?
A conversation with 60 Minutes about media coverage of the rise and fall of Elizabeth Holmes and her hot startup, Theranos