ABHI Membership

ABHI at 30 Guest Blogs. Value: Improving Health Outcomes for as Low a Cost as Possible

One global truth is that the costs of healthcare are rising rapidly and improvements in health are not necessarily proportional. Across the world, inflation in healthcare has outpaced overall inflation. While some developing countries are seeing improvements in longevity and other health metrics as their economies mature, developed countries are not experiencing the same improvements in health. For example, life expectancy in the United States has actually declined in the last two years while spending continues to increase, now accounting for approximately 19% of gross domestic product.

Advances in technology have tended to lower prices and increase quality for nearly every industry. Service industries have seen substantial productivity gains, generally associated with enhanced performance, enabled through technologies that allow data to be used more fluidly and that permit some functions to be automated. Health care appears to be a very notable exceptional. Electronic health records, the largest area of investment, have reduced practitioner efficiency and failed to significantly improve outcomes. Furthermore, they have been pegged as the most important source of physician dissatisfaction in the US.

Technology will have a major positive impact on quality and efficiency in healthcare, but barriers are slowing the pace of innovation and dissemination. Healthcare markets are far from efficient with many disjointed interests built on long traditions and an underpinning of clinician autonomy. Hospitals, nursing staff, and physicians are often led by distinct entities that may be at odds with each other. Fee-for-service underpinnings in many countries, even in some single-payer systems where clinicians are rewarded for productivity, change the focus from achieving better outcomes to producing more healthcare, whether truly beneficial or not.

A focus on value—improved health outcomes for as low a cost as possible—could change the goals of the health system to those desired by society. All consumers and their employers want better health with minimal waste. Given the power of this logic, a shift in reward mechanisms to embrace value is inevitable.

At Dell Medical School at The University of Texas at Austin, we have a mission to accelerate innovations in the health system centered on value. We start by focusing sharply on what people want using methods of human-centered design. We then ignore the current payment system and build ideal care to deliver those outcomes, also enhancing the experience and reducing waste. With current systems optimised to produce more healthcare, it is easy to find tremendous waste in the system. Team-based care and technologies are introduced to address specific needs in the care model. Prevention and health promotion naturally come to the fore because they are so well aligned with our desire to remain healthy and avoid healthcare.

The results so far have been remarkable. By focusing on specific conditions, we have been able to demonstrate improved outcomes at lower costs. For example, our system of care for joint pain produces much better results than approaches previously available in the community and costs at least 30% less. The approach has drawn the interest of several partners, large and small, who are interested in navigating a future focused on value-based care. Notably, Merck moved an IT innovation hub into our research building and Medtronic is partnering in projects related to shared decision making.

Working across international barriers has numerous potential benefits. First, exposure to different healthcare systems stimulates creativity but clarifying that local practices are not necessarily optimised. Second, differences in procurement, coordination, and business incentives allow for markets that may not be available in another country. Third, access to capital and talent may be eased by greater international exposure and sourcing. Here in Austin, we welcome international health IT interests as a way to stimulate the ideas and opportunities for all of us. Our existing relationship with ABHI has already produced important rewards for us and for our hosted companies.

S. Claiborne “Clay” Johnston, M.D., Ph.D. Dean, Dell Medical School, Vice President for Medical Affairs, UT Austin, Frank and Charmaine Denius Distinguished Dean’s Chair in Medical Leadership