Michael Porter's Value-Based Health Care Delivery Proposal

The Danger of Silence:
A Loud Rebuttal to Michael

Porters Value-Based Health
Care Delivery Proposal
Authors and Disclosures
Borthakur, Gitasree, M.D.1 Kerridge, William, M.D. 1
Ballenger, Zachary, M.D. 1 Gunderman, Richard, M.D. 1
Department of Radiology1, Indiana University School of Medicine, Indianapolis, IN
*None of the authors have any disclosures.

The Challenges Ahead
How do we address the financial costs of healthcare?
Healthcare costs are rising
Reimbursements are declining
How should we better coordinate care for patients?

How can the redundancy in patient care be eliminated?
How can we improve continuity of care?
How do we sustain the field of radiology?

How do we prevent commoditization of our jobs?
How do we demonstrate the value of radiology?
The Proposal
www.sharedvalue.org
Michael Porter, the Bishop William Lawrence University Professor at the Harvard
Business School, formed a strategy to transform the current healthcare system.
THE STRATEGY FOR VALUE TRANSFORMATION:

Consumer Driven Healthcare Patient Outcome-Based Healthcare
Healthcare focused on the Healthcare focused on the outcomes
volume of services provided achieved by patients for the lowest cost
2014 ACR AMCLC Moreton Lecture:
Value Based Healthcare Delivery
We have to measure value
by the set of outcomes that
matter to patients.
www.acr.org
-What are the implications for radiology?

-What questions should we ask?
-How should we respond?
www.acr.org
Organize into
Integrated Practice
Units (IPUs)
1 Measure Outcomes
Build an Enabling
Information and Costs for Every
6 2 Patient
Technology Platform
COMPONENTS
OF VALUE
BASED
HEALTHCARE
DELIVERY Move to Bundled
Expand Geographic 5 3
Reach Payments for Care
Cycles
4
Integrate Care
Delivery Systems
Organize into Integrated
1
Practice Units (IPUs)
The IPU is composed of clinical and nonclinical personnel who provide for the full
care cycle for a patients medical condition.
THE PROPOSAL: Value is added by centralizing patient care into large units that
provide high volume services.
Lets look at an example provided by Porter The basic Diabetes IPU.

This would require services of physicians, mid-level providers, and nurses
of the following departments:
Endocrinology Physical Medicine and Rehabilitation
Nephrology Infectious Disease specialists
Ophthalmology Radiology
Vascular Surgery Pathology
Interventional Radiology Emergency Department
THE REBUTTAL: This looks like a hospital

The patients who contribute most to the financial burden of healthcare delivery
often require multidisciplinary resources and facilities of hospitals
Measure Outcomes and Costs
2
for Every Patient
THE PROPOSAL:
Although measuring healthcare outcomes is not a novel idea, this new proposal
suggests that we measure outcomes that matter to patients.
Proposed examples:
1) Instead of measuring prostate cancer survival,
Measure the associated comorbidities of incontinence or sexual function.
2) Instead of measuring breast cancer survival,
Measure patient satisfaction with breast conserving treatment.
THE REBUTTAL: What are the implications of publicizing data that reflects
patient-valued outcomes?
An alternative therapy with preferable morbidity but increased mortality
may seem favorable to patients who do not understand the greater
consequences of their decisions.
Patients often look for guidance from their physicians on these issues,
despite the less favorable outcome from appropriate treatment.
Making healthcare decisions on inaccurate data is dangerous.
Move to Bundled Payments
3
for Care Cycles
THE PROPOSAL:
Providers must be made to share the costs of inappropriate services and cost overruns.
THE REBUTTAL:
1) Even the best physicians and hospitals cannot control outcomes. Poor outcomes
inevitably occur and generate additional cost. Will doctors begin selecting their patients?
2) Bundling payments assumes that all patients with a particular diagnosis or treatment
are the same and can be lumped together under a single title. However, patients have
individual differences that must be accounted for.
3) Most high-cost scenarios occur in hospitals, where physicians are salaried and do not
benefit from ordering high volume of services.
4) Rather, the high costs of healthcare are often derived from:

a. The fear of malpractice.
b. Patient requests for certainty in diagnostic dilemmas.
c. Efforts to practice gold standard medicine wherein therapy is often
prescribed without consideration of cost.
Integrate Care Delivery
4 Systems
THE PROPOSAL:
Reduce the degree of overlap or redundancy among health care providers and facilities
in the same geographic region.
Large facilities might focus on high-technology advanced procedures while discontinuing

routine procedures.
Concentrate volume in fewer locations. Choose the right location for each service.
THE REBUTTAL:
1) This solution may be successful in a single-payer healthcare system. However, as

long as hospitals and healthcare systems are competing one another, this proposal
will fail.
2) Competition plays an important role in motivating providers to enhance value.
3) Competition plays a crucial role in cost control. With a single provider in a geographic
region, what prevents them from raising costs without competition?
4) Concentrating volume limits patient access to healthcare.

Expand Geographic
5
Reach
THE PROPOSAL:
Geographic expansion with a hub and spoke model of superior providers such as MD
Anderson or Childrens Hospital of Philadelphia or Cleveland Clinic.
Each IPU will have satellite facilities with rotating clinicians.
THE REBUTTAL:
1) Defining these superior providers will be controversial.
2) Creating and maintaining additional satellite facilities will be at the expense of the
institution. It is more cost-effective for an institution to consolidate resources.
3) Large academic centers often have no economic incentive to expand geographic

reach. Many patients travel to these institutions on their own accord to gain 2nd or 3rd
opinions and to obtain subspecialized care.
Build an Enabling Information
6
Technology Platform
THE PROPOSAL:
Develop an IT platform that is:

- patient centered
- uses common data definitions
- encompasses all types of data
- includes expert systems for every medical condition
- easy to extract information
- unified among multiple hospitals and health systems
THE REBUTTAL:
1) Creating this ideal IT platform is challenging.
2) Competition among IT companies is the driving force for the development of new
problem-solving applications.
3) Access to information is valuable, but it is no substitute for the patient-physician

relationship.
Conclusion
It is imperative that radiologists review, analyze, and
voice their assessments on healthcare reform.
Silence to healthcare proposals suggests disinterested

agreement.
Active discussion regarding changes in healthcare

policy should be encouraged.
Thank You
Please email with questions:
[email protected]
Indianapolis, IN

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The Danger of Silence:

A Loud Rebuttal to Michael

Department of Radiology1, Indiana University School of Medicine, Indianapolis, IN

*None of the authors have any disclosures.

How should we better coordinate care for patients?

How do we sustain the field of radiology?

THE STRATEGY FOR VALUE TRANSFORMATION:

-What are the implications for radiology?

Lets look at an example provided by Porter The basic Diabetes IPU.

THE REBUTTAL: This looks like a hospital

4) Rather, the high costs of healthcare are often derived from:

Large facilities might focus on high-technology advanced procedures while discontinuing

1) This solution may be successful in a single-payer healthcare system. However, as

2) Competition plays an important role in motivating providers to enhance value.

4) Concentrating volume limits patient access to healthcare.

Each IPU will have satellite facilities with rotating clinicians.

1) Defining these superior providers will be controversial.

3) Large academic centers often have no economic incentive to expand geographic

Develop an IT platform that is:

1) Creating this ideal IT platform is challenging.

3) Access to information is valuable, but it is no substitute for the patient-physician

Silence to healthcare proposals suggests disinterested

Active discussion regarding changes in healthcare

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