Leaders from the American College of Surgeons (ACS) and Harvard Business School's (HBS) Institute for Strategy and Competitiveness have announced a new value-based measurement tool that aims to help hospitals and surgical practices improve outcomes while lowering the cost of care.
Officials of the two organizations say that better measurement of quality and costs will enable hospitals to improve the value they deliver to patients while positioning them for success as reimbursement shifts to bundled payments, an approach that increases transparency and accountability.
At a recent event on Capitol Hill, leaders of the program, called ACS THRIVE (Transforming Health care Resources to Increase Value and Efficiency), discussed the challenges the nation's health system faces as it moves from volume to value-based payment models, the changing team dynamics within hospitals, and the new care models that health systems must adopt.
"We want to reduce the high costs incurred in the U.S. healthcare sector, but do this in ways that don't compromise the quality of care or a patient's access to it," said Prof. Robert Kaplan, Ph.D., senior fellow and Marvin Bower Professor of Leadership Development, Emeritus, HBS. "Cutting costs by arbitrary reduction in headcount is not a sustainable solution. True cost improvement requires that we first measure what it costs today to treat a patient's medical condition, and then redesign the care model to deliver the same or, preferably, better outcomes with a lower-cost mix of resources, especially personnel, equipment, devices and drugs."
Initially, according to officials, ACS THRIVE leaders will pilot the value-measurement process with 10 to 15 hospitals in the U.S., focusing on measuring the full cycle of care—including its key surgical, medical, behavioral and social elements—for three surgical conditions. Results from the pilot will be used to create a scalable approach that all hospitals can use to measure and improve value, company executives contend.
The method will also include risk-adjusted benchmarks, so hospitals can compare their value with one another with the goal to generate system-wide improvement. High-value providers will be recognized, while those with opportunities for improvement can learn from the best practices of the high-value hospitals and health systems, they added.
"Surgical care is more than just the operative procedure," noted Frank G. Opelka, M.D., medical director, ACS Quality and Health Policy. "Surgical care involves teams of clinicians who begin delivering care in the preoperative phase, include anesthesia, nursing care and medical specialties and continues through to postoperative rehabilitation. As a team, we need to optimize each phase of care to provide the best outcomes for patients and meet their goals."
Both ACS and HBS have extensive experience when it comes to cost and quality measurement. ACS first proposed its Hospital Standardization Program in 1912, which evolved to become The Joint Commission. In 1922, the ACS created the Commission on Cancer, which today sets standards used by 80 percent of U.S. cancer centers. Meanwhile, the HBS Institute’s leaders, including Prof. Kaplan, have created well-recognized business strategy and cost-measurement methods, including time-driven activity-based costing, or TDABC, an accounting method that is recognized as one of the most effective means of measuring and improving an organization's costs.
"We believe the value-based healthcare approach will expand the definition of quality and will improve transparency, both of which are essential to delivering truly patient-centered care," said Mary L. Witkowski, M.D., fellow, HBS Institute for Strategy and Competitiveness. "With better understanding of their quality and costs, health systems, accountable care organizations and surgical practices to will then be able improve the value they deliver to patients and increase access to care."
