• 29 SEP 12
    • 10
    Making value-based decisions in healthcare

    Making value-based decisions in healthcare

    Danny Lieberman, founder of Pathcare, the online service for mindful sharing for support groups, considers inflection points for investment in technology for supporting for people.

    Nothing is free in life, as noted by Robert Heinlen; who coined the expression: TAANSTAFL – “There ain’t no such thing as a free lunch”.

    However – cost is not the entire question. The question is how can we make good “value based decisions when we invest in personal and public health”.

     Cost versus effectiveness

    In order to understand the meaning of  “value based decisions” – we need to understand the difference between cost (“Getting a free lunch but not enjoying the food and feeling sick afterwards”) and effectiveness (“Paying for lunch, enjoying the food and feeling just right afterwards”).

    Every business measures effectiveness and profitability but interestingly enough, managers do not always make value-based decisions.   Purchasing decisions, decisions to buy or sell a stock or decisions to develop a new product are often made based on gut feelings without regards to the return on investment.

    It is certainly reasonable to relate to healthcare like any other business – where you invest money and get returns by having healthier, longer-living people, who are more productive, happier, have less sick days, feel better, look better and produce more for their employer and their community.

    But, effectiveness also implies that there is a cost side to healthcare for people – where an individual person must assume the cost and responsibility of being healthy.

    The challenge for any value-based decision is finding the inflection point

    At some point, the cost is too high or the return on investment starts going down. You can buy lunch for $500 – it doesn’t mean that you will enjoy the food or by happy afterwards – especially if you have to wash dishes for a week to pay for the bill.

    Investment in good health, like anything else, has an inflection point where investing more resources  leads to diminishing returns.

    The health inflection point on a personal level

    Working out 10 hours/week may be just right for you and you get enthusiastic about lifting weights, but 30 hours a week may cut into your work and family schedule and may eventually result in over-use injuries where you will need to stop and take a respite from the gym for 4-6 weeks as you heal. This is an example of how higher personal investment can result in dimishing health returns.

    The health inflection point on a government level

    Similarly at a government level – we would all agree that governments should invest in improving healthcare infrastructures and improving operations – for example by converting to a single-payer system and getting economies of scale.  This is where government legislation and enforcement shines.

    Inevitably however, more government spending on healthcare may reduce in less healthy people and diminishing returns because of churn, system overheads and the costs of running the bureaucracy to manage  Federal healthcare programs.

    Consider that  increasing Federal spending on healthcare may result in Federal and healthcare organization decision makers to becoming blinded to low-cost solutions because they would be out of a job.

    This is indeed a serious question in public healthcare policy.

    Can we measure value-based healthcare?

    A Dutch institute and US industry association are attempting to find answers to the question of how to implement value-based healthcare by looking at physicians, patient values and the entire care cycle:

    The Dutch-based Decision Institute  has developed a number of methodologies to implement the Value Based Healthcare from different perspectives: The medical condition, patient values, the care cycle, outcome measures, organization design, health costing, and value proposition. Through our masterclasses we provide ‘tastings’ of these methodologies, by which you can internalize the concept and get enabled to start improving your own healthcare delivery.

    The US-based Healthcare Financial Management Association  has Web-based clinical simulations allow clinicians to see how their medical decisions will likely impact care quality and cost—critical information as fee-for-service healthcare models are replaced by value-based models.

    Hospitals and health systems will not meet their objectives without first changing the long-entrenched behaviors of clinicians trained to optimize their decisions in the fee-for-service model.

    Don’t physicians and patients have responsibility for a good healthcare system?

    It is easy to place the burden of responsibility for healthy people on the shoulders of the government, but good health starts with people and continues with physicians who are responsible for improving education and increasing compliance and outcomes together with their patients.

    Indeed, hospitals and health systems will not meet their objectives without first placing the needs of physicians and physician-patient relationships before financial models and simulations.

    Over 20 patients a day die in the UK,from the superbug infections, MRSA and C difficile. It appears you have to spend money on new antibiotics if you want to save lives.

    Vice-Chancellor of the University of Buckingham, Terence Kealey suggests that new research that characterises the key enzymes of MRSA and C difficile, will enable systematic development of new antibiotics for these two superbug infections.

    Dr. Kealey is pessimistic that the bureacratic system of the UK NHS will be able to utilize the innovative drugs because that would cost money.

    Although Kealey appears to prefer a more privatized system of health – looking at trends of healthcare spending in the United States during the past 4 years of the Obama administration, it is not clear that more Federal spending is helping make Americans healthier by eating better and walking instead of taking the car.

    Why big federal spending on healthcare will not make Americans healthier

    US spending on Obamacare will cost the US taxpayer 1 Trillion US Dollars over 10 years. Serious efforts are being made to collect metrics on meaningful use and measure effectiveness – this is the good news.

    The bad news is that US public expenditure per patient  is over twice that of Norway although both countries have comparable numbers of hospital beds per 1,000 (numbers courtesy of the World Bank).

    Using the Norway example, US Federal government spending on  healthcare may already be past the inflection point of diminishing returns.

    The solution for better health starts with personal responsibility

    The solution for better privacy and healthier citizens lies in individuals adopting simple, practical methods like walking instead of taking the car and eating vegetables instead of industrial-prepared food like chicken nuggets.

    There are simple and cheap solutions for being healthy

    They are all based on personal responsibility for maintaining good health and solid doctor-patient relationships when you get sick.

    Your mom was right when she told you to wash your hands before eating and get a good nights sleep on a school night.

    On the island of Ikaria, people drink wine at breakfast, lunch and dinner, go to bed late but wake up naturally and live a simple life with lots of goat milk, locally-grown vegetables, cold-pressed olive oil and just a little meat once/week.

    Ikaria is an island off the western coast of Turkey, home to almost 10,000 Greek nationals. What’s remarkable about these people is that they live extraordinarily long lives; it is not uncommon to be passing 100 year-olds on the street. See the Island where people forget to die. 

    And perhaps we should all take a lesson from the people of Ikaria before rushing to implement “simulations for value-based healthcare.

    Because – the best value you can have is a healthy life with the people you love.

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  • Posted by Jonena Relth on November 26, 2012, 9:18 pm

    Danny, I agree with you that the solution for better health in the US should start with personal responsibility. In my travels to Europe, Asia, Australia, and even Cuba and Nepal I am always reminded of how fat and out of shape Americans are. Because of our abundant lifestyle of plenty: we eat and drink too much; eat processed and fast food instead of natural foods from our own gardens; drive instead of walk or ride a bike and work at our computers or watch TV into the night instead of staying active physically.

    Does it seem ironic to anyone that we have to pay higher prices for food that is good for us such as: organically grown beef and chicken raised without added hormones or antibiotics; food with less salt, less sugar, less chemicals; or organically grown fruit and vegetables that doesn’t don’t contain pesticides or other harmful crud? Perhaps this is where our local governments should step in. (I’m not big on Federal Gov’t. intervention…) We could start by rewarding farmers who raise healthy food and grocers that carry less-expensive healthy food for US citizens instead of making it too expensive for them to do so.
    A few years back, I had Nepali friends come to visit me in the US. I will never forget the four-year-old boy ask, “Mama, why are Americans so big?”
    Danny, You are spot on: “The solution for better privacy and healthier citizens lies in individuals adopting simple, practical methods like walking instead of taking the car and eating vegetables instead of industrial-prepared food like chicken nuggets.”
    But how do we convince our citizens to do this? Maybe the solution is similar to how we “convinced” people to stop smoking by making it very inconvenient to do so. Stop TV advertisements of junk food, etc.

    I don’t want seem insensitive to those who struggle with their weight, but every individual should take personal responsibility for what he/she puts in their mouth. No one got heavy by not eating – – just the opposite!

    And, if obese individuals were forced to pay for their own healthcare – – not an expense shared by a group, and healthy individuals were rewarded with cheaper, more extensive coverage, maybe our population would think twice before stuffing in the last Twinkies on the shelf!

    Reply →
    • Posted by Danny on November 26, 2012, 10:42 pm
      in reply to Jonena Relth

      Thanks for support and kind words.

      While, I agree that it’s intuitive to reward healthy people with lower rates – like we reward safer drivers with lower rates,
      I don’t necessarily subscribe to economic incentives when it comes to individuals. Financial rewards for good behavior work well up to around 6th grade.

      There is a saying the the reward for a good deed is the good deed itself.

      What does this mean ?

      It means really 2 things –

      a) that when you do good (like biking instead of vegging) you feel better, get used to the idea and bike a little bit better next time.

      b) doing good things leads you do other good things, like once you get used to biking, even you don’t bike to the local dry cleaners, you will walk instead of taking the car because you have gotten used to the idea of physical activity instead of driving.

      There is a parallel between physical habits and mental habits.

      If an individual gets into a mental habit of eating vegetables instead of Twinkies (Twinkies are fine every so often….) – they will turn to a carrot first.

      I think that the cost to the system and the educational value of encouraging people to be responsible for their own health should not need to be legislated nor tweaked by Keynsian economics.

      Reply →
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