Image: REUTERS/ Mohamed Nureldin Abdallah

Since the World Economic Forum launched its Value in Healthcare project in 2016, leaders in the global healthcare industry have developed a clear understanding of what it will take to improve healthcare value (defined as the delivery of continuously improving health outcomes to patients at the same or lower cost). In particular, the project has emphasized the importance of four key enablers that provide the essential foundation for any value-based health system:

- Systematic reporting of health outcomes by disease and population group, benchmarking across providers and research and development of decision support tools;

- New models of service delivery that are more integrated around the patient ensuring efficient and appropriate services

- Comprehensive health informatics systems for the capture and sharing of data on populations segments and outcomes that matter to patients;

- Value-based payment models that reward for value rather than volume; and

Putting these enablers in place will require transformation of current health systems, but many barriers stand in the way. Despite considerable progress in defining global outcomes standards for many disease groups, the routine benchmarking of provider organizations against these standards remains relatively limited. Care delivery suffers from the fragmentation of many health systems, the lack of integrated budgets for public health and acute care, and a persistent under-emphasis on prevention.

Obstacles to widespread sharing of health information data include a tendency by institutions to hoard their own data, concerns about data privacy, and the absence of clearly defined global data standards which limits interoperability between today’s highly fragmented EMR / application landscape. Finally, some systems are experimenting with a variety of value-based payment models, but fee-for-service payment remains the default model in many parts of the world.

What will it take to overcome these barriers? The starting point is to develop new ways of working together and new modes of cooperation — both across sectoral boundaries within the healthcare industry (e.g. between payers, providers, and pharma / med-tech) and between the industry and government (which is typically the main payer for healthcare budgets). It will also require dynamic leadership on the part of both industry stakeholders and government officials and policymakers.

In late May, a cross-section of industry leaders discussed these challenges at a special session organized by the Value in Healthcare team at the 71st annual World Health Assembly, in Geneva, Switzerland. The session, organized by the World Economic Forum in collaboration with The Boston Consulting Group, focused on some of the main barriers to value-based transformation in health systems and how stakeholders can work together to address them.

“We Need to Create New Alliances”

After opening remarks by Vanessa Candeias, head of the global health and healthcare system initiative at the Forum, and Admiral Brett Giroir, recently appointed Assistant Secretary for Health in the US Department of Health and Human Services, a panel of representatives from key industry stakeholders discussed the challenges of making value-based healthcare a reality. Admiral Giroir was joined onstage by Somesh Chandra, chief health officer for European markets at the global insurance company AXA; Jan Kimpen, chief medical officer at Royal Philips; Petra Laux, global head for public policy at Novartis; and John Schaeffler, head of government affairs and policy at GE Healthcare. Stefan Larsson, BCG senior partner and global leader of the firm’s health systems practice posed questions to the group and moderated the discussion.

In his opening remarks to the session, Admiral Giroir shared his vision for stronger disease prevention and better alignment of the US healthcare system to the key principles of value based HC. According to Giroir, “value-based transformation” is a key priority of recently appointed US Secretary for Health and Human Services Alex Azar, and there are three critical objectives in achieving it:

- Placing far more emphasis on prevention — as Giroir put it, “we need to transform the current sick-care system into a health-promoting system”

- Empowering patients through improving health literacy, connectivity, and choice

- Incentivizing health care providers through changes in payment models. “Today, incentives are horribly misaligned,” said Giroir. “Providers make more money comes from curing the sick than from keeping them well.”

The participants broadly agreed that transforming health systems in the direction of value-based healthcare is necessary for the future, but requires more effective cooperation among payers, providers, and suppliers. “A trust deficit does exist,” said AXA’s Chandra. “All stakeholders have been trying to own the whole ecosystem.”

How to overcome the trust deficit? The key is to put the customer at the center of care delivery, make value delivered to the patient the key criterion for performance, and create incentives for all stakeholders to collaborate to deliver the best outcomes for the patient. “It’s very easy to talk about what others can do in value-based healthcare,” continued Chandra. “But we all need to take ‘baby steps’ in our own expertise areas. We need to create new alliances.” Added Kimpen: “Collaborations and partnerships are critical for value-based healthcare to come to life.”

Panelists gave a number of examples where that kind of cross-industry cooperation is already happening. Payers and providers are experimenting with risk-sharing agreements that use value (e.g. health outcomes delivered for certain costs) as the basis for payments. Med-tech and pharmaceutical companies are pooling their capabilities to come up with innovative approaches to diagnosis and therapy in key disease areas. But much more needs to be done to encourage cooperation and risk-sharing, because the most effective value-based innovations in care delivery are likely to be found across the traditional sectoral boundaries of the system. “We need to create an environment where all stakeholders can do what they do best but are collectively responsible to a broader goal,” said GE’s Schaeffler.

To help seed that environment, the Value in Healthcare project has been working with industry stakeholders to develop new models for collective action and value-based transformation in local health systems. In 2017, the project helped convene a broad cross-section of stakeholders in the Atlanta metropolitan area in the US to work together to improve outcomes in congestive heart failure. And in 2018, we are helping launch a similar pilot focused on type 2 diabetes in the province of Ontario in Canada.

An emerging theme from these efforts is the importance of public sector leadership. At the local level, active leadership is critical to convene key institutional players and to get them to address value from a system-wide perspective. And at the national and international levels, policy and regulatory innovation will be key to long-term progress. Leaders in the “need to influence the creation of a policy framework that incentivizes the behaviors that we all agree are necessary to enable value-based healthcare,” said BCG’s Larsson.

“Getting the Informatics Right”

One area where cross-industry cooperation will be especially important is in the domain of health informatics. Like many industries, healthcare is in the midst of a digital transformation which is rapidly expanding the “art of the possible” when it comes to integrating health data around the patient. “You absolutely have to get the informatics right” said Giroir at the WHA panel, “because if you don’t, you can’t judge whether the quality you are attempting to pay for is actually there.”

But harnessing the potential of healthcare informatics to support value-based transformation will require overcoming a series of obstacles. Some panelists mentioned the problem of data hoarding — institutions don’t want to share their data because it is a key asset they want to monetize. “We need to move from a model where you make money from leveraging and using the data rather than holding it,” said Laux from Novartis. Others thought the primary roadblock wasn’t so much data access as data privacy. “We still can’t guarantee 100% data security,” said Kimpen from Philips. Still others emphasized the importance of developing global informatics standards so that systems are truly interoperable.

Here too, government leadership is key. “These issues of data access and data privacy will be battled out in ministries, legislatures, and policy committees,” said GE’s Schlaeffer. “We need a policy framework that encourages risk sharing and flexibility to incentivize innovation.”

But there is a lot that other stakeholders can do in the meantime. For example, to address the data standards issue, the Value in Healthcare project will be launching a pilot with key provider and research institutions to define a common data model for the collection and sharing of health outcomes data. Other examples of driving this agenda forward include patient advocacy groups pushing for more patient-centered approaches to care, and private sector players innovating their business models around value.

A Coalition for Value in Healthcare

As the examples shared at the WHA panel make clear, the cooperation across sector boundaries necessary for value-based transformation is starting to happen. But we need to accelerate the pace of change. To that end, in 2018 the Value in Healthcare initiative is working to create a Coalition for Value in Healthcare. Although still in its formative stage, the basic idea of the Coalition is to create a global network of industry stakeholders to support value-based transformation of health systems by playing three key roles:

- To serve as a catalyst and neutral platform for the launch of local initiatives like those currently underway in Atlanta and Ontario and to scale up and accelerate value-based transformation across local health systems;

- To create a community of practice in which practitioners from around the world to share practical examples from implementation and to learn from each other about how to undertake a journey towards a value-based health system; and

- To function as a center of excellence that develops methodologies and guidelines on best practices in value-based transformation, conducting research, training practitioners, and influencing public policy

As the global organisation for public-private cooperation, the World Economic Forum is currently preparing more detailed perspectives on how public and private health systems actors can mobilize through cooperation for value-based care. We look forward to sharing these learnings with you in the coming months.

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The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation

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The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation #wef

World Economic Forum

The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation

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