Health Reform Patients

Getting the Best Value for your Buck

If you work in the Life Sciences then you have probably seen the term ‘value-based healthcare’ increasingly used.

Oxford-based, Professor Muir Gray of the Nuffield Department of Primary Care Health Services, describes the genesis of this movement in the United Kingdom as occurring in the aftermath of the 2008 Global Financial Crisis. The fiscal constraints on healthcare spending over previous decades that had spawned evidence-based decision making, such as the Cochrane collaboration, health technology assessment and quality improvement, were no longer adequate. The pressure on the system forced a new approach to maximising the value generated from the available, and often diminishing, resources.

An example of this approach in action is the recent National Institute for Health and Care Excellence (NICE) Guidance that recommends stopping the annual cystoscopy used to monitor bladder cancer patients for disease recurrence. The rationale being that patients will return if/when they experience symptoms, and there is no evidence on a population level that annual monitoring saves lives. Many other interventions that could be reduced without adversely impacting population health have been identified as part of a Choosing Wisely campaign. This same initiative was launched locally in 2016 as Choosing Wisely Australia and is being led by Australia’s medical colleges, societies and associations.  

Value-based healthcare can be formally defined as a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. Less formally, the intent is to ‘achieve the best outcomes, do it with minimal cost and do not sacrifice quality’. The policy has now reached our national agenda with the recently published Australian Healthcare and Hospitals Association Blueprint for a post-2020 National Health Agreement titled ‘Strategies for outcomes-focused and value-based healthcare’. They advocate a whole of Government approach to primary prevention; the availability and utilisation of real-time, linked data; and most contentiously, the establishment of an independent national health authority distinct from the Commonwealth, and state and territory health departments, reporting directly to COAG, to support integration of health services at a regional level, and all within a 2-year time-frame!

In 2015, Anthony Scott, a NHMRC Principal Research Fellow based at the University of Melbourne, considered options for introducing value-based healthcare concepts into Medicare. Achieving value for money is difficult as the market for healthcare is unique: patients do not know the value of the care they receive; Governments become involved to address market failures and ensure equity of access; and resources are frequently misallocated. Scott considers best practice Medicare rebates for specialists; pay-for-performance for GPs and hospitals; re-assessing which items are included in the Medicare Benefits Scheme (MBS) and value-based payments for public and private hospitals. He concludes that re-aligning financial incentives targeted at health care providers is likely to be more effective than adjusting patient co-payments (perhaps a nod to the $7 debacle), and although changes to improve quality are possible, they will have little impact on slowing overall expenditure growth.

One primary care initiative currently being rolled out around Australia are Health Care Homes. These provide co-ordinated care for people with chronic conditions with the value-based payments different from a fee-for-service or capitated approach in which providers are paid based on the amount of healthcare services they deliver. Bundled payments are provided monthly depending upon the level of complexity of each patient’s condition (categorised by tiers).

The Medical Technology Association of Australia (MTAA) have organised a full-day Value-based Healthcare Summit to be held in Sydney on April 24. Value-based healthcare will be discussed in the Australian context from a variety of perspectives including the capture of real-world data to assess value; measuring Patient-Reported Outcome Measures (PROMs); the International Consortium for Health Outcomes Measurement (ICHOM) standards; and value-based healthcare in the public & private sector.

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