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The Value of Care: What's its Proxy?

October 31st, 2014
This morning I walked into Dunkin’ Donuts for a large coffee and took my place at the end of a lengthy line. Indeed, the Dunkin’ Donuts brand denotes quality---a good tasting cup of coffee at a reasonable price. In walked a gentleman who seemed a bit taken aback by the long line, and he commented “Wow--must be a good cup of coffee!”

This got me thinking. The long line certainly intimated that the coffee was “good”. Demand for any product might arguably be used as a proxy for its quality. But in terms of consumer behavior in the health care marketplace, demand and/or utilization might not be a reasonable proxy for value. If a Dunkin’ Donuts cup of coffee was priced 3 times what we are used to, we'd probably find an alternative supplier. Of course, as the consumer, we’d have the choice of whether to dip into our pocket and pay more than the cup of coffee might be worth.


My experience this morning got me thinking about what Value of Care Equations in health care are all about. In the health care marketplace, as the consumer, we don't necessarily get to choose when we can spend more for a given product or service, even if we want to----because we typically dont dip into our own pocket. Interestingly, as consumerism increases, higher deductible plans assign us more accountability for our purchasing decisions and behavior as consumers.

In short, Value = Outcomes achieved/dollars spent


Michael Porter, from Harvard, has written extensively on this subject. He has stated that outcomes for any medical condition can be arranged in a three-tiered hierarchy. Tier 1 is the health status that is achieved or, for patients with some degenerative conditions, retained. Tier 2 outcomes are related to the recovery process. Tier 3 is the sustainability of health. (see this link for more in depth info:http://www.nejm.org/doi/full/10.1056/NEJMp1011024?viewType=Print). Each medical condition will have its own outcome measures. Porter writes “Current cost-measurement approaches have also obscured value in health care and led to cost-containment efforts that are incremental, ineffective, and sometimes even counterproductive. Today, health care organizations measure and accumulate costs around departments, physician specialties, discrete service areas, and line items such as drugs and supplies — a reflection of the organization and financing of care. Costs, like outcomes, should instead be measured around the patient… Much of the total cost of caring for a patient involves shared resources, such as physicians, staff, facilities, and equipment. To measure true costs, shared resource costs must be attributed to individual patients on the basis of actual resource use for their care, not averages.”


He suggests that “Measuring the total costs over a patient's entire care cycle and weighing them against outcomes will enable truly structural cost reduction, through steps such as reallocation of spending among types of services, elimination of non–value-adding services, better use of capacity, shortening of cycle time, provision of services in the appropriate settings, and so on.” He intimates that aligning reimbursement with value in this way will reward providers for efficiency in achieving good outcomes while creating accountability for substandard care.


I could not agree more! But it’s a difficult task to measure such things----both cost and quality--particularly for the 3 tiers that Porter describes. However, it is possible to take “baby steps” as a physician. As a start, unlike the conclusion that this morning’s Dunkin’ Donuts consumer arrived at upon seeing a long line—“ must be good coffee”--I would acknowledge that we need to conscientiously utilize new and expensive technology, devices, procedures, balancing the attraction of innovation with a sensitivity to the cost thereof, as well as the outcomes achieved, based truly on the evidence.

There are numerous clinical examples in my field of practice, the upper extremity, where the value equation is not used. If someone has arthritis at the distal radioulnar joint, it is possible to excise the distal ulna; this is called the Darrah procedure. For most patients the procedure works well, but there has been increasing aversion for the procedure because of the potential for diminished grip strength and impingement between the ulnar stump and the radius in a few--let's say 15-20%. As a result a very expensive, yet innovative device is available which replaces both the sigmoid notch and the distal ulna. However, it is being used now with more frequency not simply when distal ulna excision is unsuccessful, which I think is appropriate, but as the index procedure. I would argue, based on what we know, that the value equation would not support such a practice. As another example, I would submit that many an MRI are performed simply to provide an image of what the clinician already knows is going on based on clinical exam. At the cost of $900 per study, this practice would not be supported were the value equation utilized. As another example, less invasive procedures might have a value proposition of quicker recovery and less pain— for example, endoscopic carpal tunnel and cubital tunnel releases, but if one actually looks at the horizon-and considers more than just Porter’s Tier 2-- recovery time--- the old fashion way these procedures are performed might actually result in a higher value, based on the value equation.


This is all “food for thought” as consumers shoulder higher deductibles and the health care available dollar continues to be extracted from a fixed sum--- indeed, it is a 0 sum game currently. So, in summary, while a long line at your local Dunkin’ Donuts may indeed be proof that the coffee served is very good, demand for certain services in the health care marketplace, and high utilization of newer and more innovative techniques and devices, may not necessarily translate into a “higher value” offering.


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