A Cancer Center Puts the New Approach to Work

Heidi W. Albright; Thomas W. Feeley

Article | Harvard Business Review | September 2011

A Cancer Center Puts the New Approach to Work: Pilot

by Heidi W. Albright and Thomas W. Feeley

Abstract

The University of Texas MD Anderson Cancer Center is a National Cancer Institute–designated Comprehensive Cancer Center, located in Houston, Texas. Seeing more than 30,000 new patients every year, MD Anderson accounts for approximately 20% of cancer care within the Houston region and 1% of cancer care nationally. MD Anderson is a medical condition–focused center that provides integrated, interdisciplinary care across the care cycle.
In collaboration with Michael Porter, we embarked on a major effort to expand clinical outcome measurement, beginning with a study of 2,468 patients in the Head and Neck Center, in 2008. We created the Institute for Cancer Care Excellence in December 2008 to support this effort. In 2010, with Robert Kaplan, we launched a pilot project, also within the Head and Neck Center, to assess the feasibility of applying modern cost accounting to health care delivery.

Keywords: health care; health care quality; measurement; Costing; Accounting; Health; Quality; Health Industry; North and Central America;

Format: Print

Citation:

Albright, Heidi W., and Thomas W. Feeley. "A Cancer Center Puts the New Approach to Work: Pilot." R1109B. Harvard Business Review 89, no. 9 (September 2011): 15–16. (This article is a sidebar description of a pilot of time-driven activity-based costing in the HBR article "How to Solve the Cost Crisis in Health Care" by Robert S. Kaplan and Michael E. Porter.)

At one point or another in our life, we all become consumers of the health care industry. Indeed, health care affects everyone and encompasses a diverse set of services from childbirth, to illness prevention, to the management of chronic disease and end-of-life care. Health care in the United States is executed through a complex set of interrelationships between three distinct parties: payers, providers, and consumers. Each group has its own perspective accompanied by a set of unique incentives, which complicate the adoption of a value-based health care system. To transform the American health care delivery system, all participants including patients, physicians, employers, insurance companies, and the government need to recognize that value is best defined as “a given health outcome per dollar of cost expended.” In this article, we examine some of the challenges to creating and implementing a value-based health care system against the backdrop of a turbulent industry and consider the implications for the anesthesiologist.

Article | NEJM Catalyst | November 8, 2018

Transitioning Payment Models: Fee-for-Service to Value-Based Care

Thomas W. Feeley and Namita Seth Mohta

In a survey of the NEJM Catalyst Insights Council in July 2018, 42% of respondents say they think value-based reimbursement models will be the primary revenue model for U.S. health care. Indeed, this transition is already happening. Respondents report that a quarter of reimbursement at their organizations is based on value, on average. While three-quarters of their revenue remains fee-for-service, we see a remarkable change to a reimbursement system that was static for decades. In particular, survey respondents’ organizations are pursuing two value-based strategies: accountable care organizations, which often use capitated payments, and bundled payments. Nearly half (46%) of respondents say value-based contracts significantly improve the quality of care, and another 42% say value-based contracts significantly lower the cost of care. The survey identifies the leading barriers to implementing value-based reimbursement models. Infrastructure requirements, including information technology (indicated by 42% of respondents), and changing regulation/policy (34%) are the top two. There is strong consensus on the broad metrics that are most important for measuring value-based care. Outcome measures top the list, with 60% of respondents saying they are extremely important. This survey suggests that many in health care see value-based reimbursement as a real solution to the nation’s current health care crisis.

Keywords: payment methods; value-based healthcare reimbursements; Health Care and Treatment; Value; Transformation;

Citation:

Feeley, Thomas W., and Namita Seth Mohta. "Transitioning Payment Models: Fee-for-Service to Value-Based Care." NEJM Catalyst (November 8, 2018). View Details

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Patients and providers are frustrated with seemingly endless data entry. We used our patients’ vested interest in their own health care by actively engaging them in the entry of their own medical information into the EHR. Prior to the implementation of the new EHR we to developed an electronic version of a patient questionnaire that had been designed and vetted by a group of subspecialty experts. We integrated that survey into our EHR. To assess the effects of our new EHR system and the new process flow for patients, we utilized time-driven activity-based costing (TDABC). One year after the implementation of the new system, TDABC analysis demonstrated cost savings of 19% and a 10-minute decrease in provider data-entry time. Any EHR system that allows the patient to input data is useful in that it can save patients and providers time and frustration, can allow for advanced care planning, and can help to ensure transparency of patient information throughout the institution.

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A Cancer Center Puts the New Approach to Work: Pilot

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