Thomas W. Feeley, M.D. is a Senior Fellow at the Harvard Business School and Professor Emeritus at the University of Texas MD Anderson Cancer Center in Houston, Texas. For twenty years he was the Helen Shafer Fly Distinguished Professor of Anesthesiology at the University of Texas MD Anderson Cancer Center. He headed the Institute for Cancer Care Innovation at the University of Texas MD Anderson Cancer Center until 2017 when he joined Harvard Business School full time. Dr. Feeley received both undergraduate and M.D. degrees from Boston University. He received his graduate medical training in anesthesiology and critical care medicine at Beth Israel Deaconess Medical Center (BIDMC), a teaching hospital of Harvard Medical School.
Thomas W. Feeley, M.D. is a Senior Fellow at the Harvard Business School and Professor Emeritus at the University of Texas MD Anderson Cancer Center in Houston, Texas. For twenty years he was the Helen Shafer Fly Distinguished Professor of Anesthesiology at the University of Texas MD Anderson Cancer Center. He headed the Institute for Cancer Care Innovation at the University of Texas MD Anderson Cancer Center until 2017 when he joined Harvard Business School full time. Dr. Feeley received both undergraduate and M.D. degrees from Boston University. He received his graduate medical training in anesthesiology and critical care medicine at Beth Israel Deaconess Medical Center (BIDMC), a teaching hospital of Harvard Medical School. He was a faculty member at Stanford University for ninteen years practicing cardiovascular anesthesia and critical care medicine. In 1997 he came to the University of Texas MD Anderson Cancer Center to create and lead the Division of Anesthesiology and Critical Care. He served eighteen years as the head of that organization which grew to be the largest program of its kind devoted to cancer anesthesiology and critical care medicine. He also served for seven years as the Vice President of Medical Operations. His work leading the Institute for Cancer Care Innovation focused on research to demonstrate and improve the value of cancer care delivery based on the work of Harvard business School Professor Michael Porter. He joined the Harvard Business School faculty on a part-time basis in 2014 working in the Institute for Strategy and Competitiveness with Professors Michael Porter and Robert Kaplan on research and education in the value-based health care agenda with an emphasis on the role of information technology in health care. His interests now also include the implementation of value-based health care through outcome measurement, cost measurement, and alternative reimbursement strategies in delivery systems world wide.
Umar Ikram, Susanna Gallani, Jose F. Figueroa and Thomas W. Feeley
As providers have ramped up their use of telehealth during the COVID-19 pandemic, one group—the elderly—has experienced particular challenges in adopting the technologies. This article describes the strategies four innovative provider organizations have used to engage with their older patients via telehealth.
Mjåset Christer, Umar Ikram, Navraj S. Nagra and Thomas W. Feeley
Health care systems across the world have increasingly embraced a value-based health care (VBHC) agenda. They do so for different reasons, using different foundations, and variations on the tools and tactics to effect their strategic goals. The role of governments, providers, and private payers varies, as do funding and payment schemes. In their review of four systems—Massachusetts (USA), the Netherlands, Norway, and England (UK)—the authors find that elements of the theoretical framework function better in some health care systems than others. Understanding of these strengths and weaknesses can yield insights for policymakers and providers as they strive for a more patient-focused, value-based care delivery environment. Government involvement can facilitate change by setting the right conditions (e.g., for regional system integration). Continuous IT improvements to ensure the availability of outcome data across the full care cycle and instituting a value-based culture among providers are keys to driving VBHC implementation.
Umar Ikram, Susanna Gallani, Jose F. Figueroa and Thomas W. Feeley
Older people (70 years and older) with multiple chronic conditions have the highest risk of being hospitalized and dying from COVID-19. The recent COVID-19 pandemic has highlighted how a strong primary care system can play an important role in protecting this group of people. How innovative primary care organizations adapted their approach to the pandemic may offer important lessons not only for future health crises, but also for redesigning post-pandemic healthcare delivery. We studied Iora Health, Oak Street Health, ChenMed and Landmark Health, which specialize in vulnerable older patients. From analysing their responses to the COVID- 19 crisis, we identify three key lessons for healthcare systems: 1) The importance of fostering trusted relationships with vulnerable older patients to timely identify and address their clinical and non-clinical needs; 2) a rapid implementation of a comprehensive virtual care approach to facilitate frequent touchpoints between the patient and care team; and 3) delivery of home-based healthcare services to ensure access during the pandemic.
As the diffusion of value-based health care efforts accelerates globally, the need for interoperable information technology systems that support value-based care is essential. Such systems are needed to facilitate dramatic improvements in patient outcomes and efficiency and, importantly, to end an era in which health IT has entrenched the status quo, perpetuated silos, and blocked reimbursement reform. A value-enabling IT platform must organize data around conditions and must enable integrated practice units to integrate care both within and across health systems. In addition, the electronic health record should be the sole source of costing information so that accurate costs for every encounter can be tracked, aggregated, shared, and used for improvement. This is the next generation of health care IT.
O. Allin, RD Urman, AF Edwards, JD Blitz, KJ Pfeifer, TW Feeley and AM Bader
A shift in health care payment models from volume toward value-based incentives will require deliberate input into systems development from both perioperative clinicians and administrators to ensure appropriate recognition of the value of all services provided—particularly ones that are not reimbursable in current fee-for-service payment models. Time-driven activity-based costing (TDABC) methodology identifies cost drivers and reduces inaccurate costing based on siloed budgets. Inaccurate costing also results from the fact that current costing methods use charges and there has been tremendous cost shifting throughout health care. High cost, high variability processes can be identified for process improvement. As payment models inevitably evolve towards value-based metrics, it will be critical to knowledgably participate in the coordination of these changes. This document provides eight practical recommendations from the Society for Perioperative Assessment and Quality Improvement (SPAQI) aimed at outlining the principles of TDABC, creating process maps for patient workflows, understanding payment structures, establishing physician alignment across service lines to create integrated practice units to facilitate development of evidence-based pathways for specific patient risk groups, establishing consistent care delivery, minimizing variability between physicians and departments, utilizing data analytics and information technology tools to track progress and obtain actionable data, and using TDABC to create costing transparency.
The Bundled Payments for Care Improvement (BPCI) initiative, developed by the U.S. Center for Medicare & Medicaid Innovation, aims to reduce health care expenditures while maintaining or improving patient outcomes.
Several published reports evaluating the impact of the BPCI on payment, utilization, and patient outcomes during the first three years of the initiative demonstrated a reduction in Medicare payments for major joint replacement of the lower extremity, driven primarily by a reduction in post-acute care utilization, without a sacrifice in quality of care as measured by no change in unplanned readmission rate, emergency department use, or mortality rate during the 90 days from episode start date. However, this reduction in Medicare payments did not translate into savings to the Medicare program, as the Net Payment Reconciliation Amount (NPRA) to providers was not included in any of the cost analyses.
The impact of the BPCI on outcomes important to patients and physicians has not been thoroughly evaluated in the published literature. Important (and standardly trackable) outcome measures that can be considered when assessing the effectiveness of a health care model for bundled payments for total joint replacement include 30-day postoperative mortality, reoperation, and readmission; hip or knee functional status; hip, knee, or lower back pain; quality of life; work status; and satisfaction with results. Many studies directly evaluated only survival and disutility as manifested by readmission rate and emergency department use.
Multiple pilot studies evaluating cost savings and quality measures using a bundled payment alternative payment model have demonstrated a reduction in Medicare episode payments, primarily related to decreased length of hospital stay and post-acute care utilization.
Readmission, certain comorbidities, and low socioeconomic status are associated with higher episode costs.
An evaluation of a bundled payment program for orthopaedic procedures in Stockholm, Sweden, revealed a decrease in cost, complication rate, and wait time after the introduction of a bundled payment system. Some of these improvements may be related to an increase in the number of surgical procedures on younger, healthier patients performed at specialized orthopaedic centers, with a concomitant shift of patients with comorbidities to hospitals.
J.A. Martin, B.L. Potter, T.F. Flanagan and T.W. Feeley
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.
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.
N.G. Thaker, A.B. Guzman, Thomas W. Feeley, T.M. Jones, J.R. Incalcaterra, C. Kolom, S.J. Frank, L.S. Tatum, Ronald S. Walters, Scott B. Cantor, D.I. Rosenthal, A.S. Garden, G.B. Gunn, C.D. Fuller and M.B. Palmer
Technological innovations in radiation therapy (RT) have rapidly improved the quality of care for patients with head and neck cancer. Intensity-modulated proton therapy (MPT) holds promise of further improving outcomes compared with the current photon-based technique (intensity-modulated radiation therapy (MRT). However, there are no data comparing the outcomes and costs of these competing technologies. In this study, we applied time-driven activity-based costing (TDABC) to define the value of these advanced RT technologies.
R.Y. Tan, M. Met-Domestici, K. Zhou, A.B. Guzman, S.T. Lim, K.C. Soo, T.W. Feeley and J. Ngeow
Purpose:
To meet increasing demand for cancer genetic testing and improve value-based cancer care delivery, National Cancer Centre Singapore restructured the Cancer Genetics Service in 2014. Care delivery processes were redesigned. We sought to improve access by increasing the clinic capacity of the Cancer Genetics Service by 100% within 1 year without increasing direct personnel costs.
Methods:
Process mapping and plan-do-study-act (PDSA) cycles were used in a quality improvement project for the Cancer Genetics Service clinic. The impact of interventions was evaluated by tracking the weekly number of patient consultations and access times for appointments between April 2014 and May 2015. The cost impact of implemented process changes was calculated using the time-driven activity-based costing method.
Results:
Our study completed two PDSA cycles. An important outcome was achieved after the first cycle: The inclusion of a genetic counselor increased clinic capacity by 350%. The number of patients seen per week increased from two in April 2014 (range, zero to four patients) to seven in November 2014 (range, four to 10 patients). Our second PDSA cycle showed that manual preappointment reminder calls reduced the variation in the nonattendance rate and contributed to a further increase in patients seen per week to 10 in May 2015 (range, seven to 13 patients). There was a concomitant decrease in costs of the patient care cycle by 18% after both PDSA cycles.
Conclusion:
This study shows how quality improvement methods can be combined with time-driven activity-based costing to increase value. In this paper, we demonstrate how we improved access while reducing costs of care delivery.
N.G. Thaker, T.J. Pugh, U. Mahmood, S. Choi, T.E. Spinks, N.E. Martin, T.T. Sio, R.J. Kudchadker, R. S. Kaplan, D.A. Kuban, D.A. Swanson, P.F. Orio, M.J. Zelefsky, B.W. Cox, L. Potters, T.A. Buchholz, T.W. Feeley and S.J. Frank
PURPOSE:
Value, defined as outcomes over costs, has been proposed as a measure to evaluate prostate cancer (PCa) treatments. We analyzed standardized outcomes and time-driven activity-based costing (TDABC) for prostate brachytherapy (PBT) to define a value framework.
METHODS AND MATERIALS:
Patients with low-risk PCa treated with low-dose-rate PBT between 1998 and 2009 were included. Outcomes were recorded according to the International Consortium for Health Outcomes Measurement standard set, which includes acute toxicity, patient-reported outcomes, and recurrence and survival outcomes. Patient-level costs to 1 year after PBT were collected using TDABC. Process mapping and radar chart analyses were conducted to visualize this value framework.
RESULTS:
A total of 238 men were eligible for analysis. Median age was 64 (range, 46-81). Median followup was 5 years (0.5-12.1). There were no acute Grade 3-5 complications. Expanded Prostate Cancer Index Composite 50 scores were favorable, with no clinically significant changes from baseline to last followup at 48 months for urinary incontinence/bother, bowel bother, sexual function, and vitality. Ten-year outcomes were favorable, including biochemical failure-free survival of 84.1%, metastasis-free survival 99.6%, PCa-specific survival 100%, and overall survival 88.6%. TDABC analysis demonstrated low resource utilization for PBT, with 41% and 10% of costs occurring in the operating room and with the MRI scan, respectively. The radar chart allowed direct visualization of outcomes and costs.
CONCLUSIONS:
We successfully created a visual framework to define the value of PBT using the International Consortium for Health Outcomes Measurement standard set and TDABC costs. PBT is associated with excellent outcomes and low costs. Widespread adoption of this methodology will enable value comparisons across providers, institutions, and treatment modalities.
Today's delivery of care to thyroid cancer patients is complex, and costly, with uneven outcomes that can be improved. The incidence of thyroid cancer is rising and requires coordinated, multidisciplinary care with high volume centers that is not always available in our current fragmented healthcare system. To address the needs of patients, providers and payers, we believe that thyroid cancer care needs to be reexamined from the perspective of value for the patient, which is defined as the outcomes that matter to patients relative to the cost of delivering them. This paper provides recommendations based on the key principles of the value-based approach to transform the delivery of thyroid cancer care.
Katy French, Barbra Bryce Speer, Alexis B. Guzman, Tayab Andrabi, Iris Recinos, Keith A. Shook, James R. Incalcaterra, John C. Frenzel and Thomas W. Feeley
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.
Christiana Beveridge, Sofia Warner, Greg Leya and Thomas W. Feeley
Given that accountable care organizations (ACOs) have not achieved the degree of cost reductions and quality improvements initially hoped for, we sought to better understand the underlying reasons for their limited success. Our analysis of American Hospital Association (AHA) data on hospital-based ACOs found that many organizations do not have the capability to track and share performance metrics, including financial metrics, and those that do are more likely to have taken on more financial risk. Our findings highlight the challenges of using ACOs as a mechanism to achieve financial cost savings. Bundled payments, which focus on narrower episodes of care, may involve fewer operational complexities and be better structured for financial success.
Keyuri Popat, Kelly Ann Gracia, Alexis B. Guzman and Thomas W. Feeley
Pain control for patients undergoing thoracic surgery is essential for their comfort and for improving their ability to function after surgery, but it can significantly increase costs. Here, we demonstrate how time-driven activity-based costing (TDABC) can be used to assess personnel costs and create process-improvement strategies. We used TDABC to evaluate the cost of providing pain control to patients undergoing thoracic surgery and to estimate the impact of specific process improvements on cost. Retrospective healthcare utilization data, with a focus on personnel costs, were used to assess cost across the entire cycle of acute pain medicine delivery for these patients. TDABC was used to identify possible improvements in personnel allocation, workflow changes, and epidural placement location and to model the cost savings of those improvements. We found that the cost of placing epidurals in the preoperative holding room was less than that of placing epidurals in the operating room. Personnel reallocation and workflow changes resulted in mean cost reductions of 14% with epidurals in the holding room and 7% cost reductions with epidurals in the operating room. Most cost savings were due to redeploying anesthesiologists to duties that are more appropriate and reducing their unnecessary duties by 30%. Furthermore, the change in epidural placement location alone in 80% of cases reduced costs by 18%. These changes did not compromise quality of care. TDABC can model personnel costs and process improvements in delivering specific healthcare services and justify further investigation of process improvements.
Tracy Spinks, Alexis Guzman, Beth M. Beadle, Seohyun Lee, Ron Walters, Jim Incalcaterra, Ehab Hanna, Amy Hessel, Randal Weber, Sandra Denney, Lee Newcomer and Thomas W. Feeley
Purpose:
Despite growing interest in bundled payments to reduce the costs of care, this payment method remains largely untested in cancer. This 3-year pilot tested the feasibility of a 1-year bundled payment for the multidisciplinary treatment of head and neck cancers.
Methods:
Four prospective treatment-based bundles were developed for patients with selected head and neck cancers. These risk-adjusted bundles covered 1 year of care that began with primary cancer treatment. Manual processes were developed for patient identification, enrollment, billing, and payment. Patients were prospectively identified and enrolled, and bundled payments were made at treatment start. Operational metrics tracked incremental effort for pilot processes and average payment cycle time compared with fee-for-service (FFS) payments.
Results:
This pilot confirmed the feasibility of a 1-year prospective bundled payment for head and neck cancers. Between November 2014 and October 2016, 88 patients were enrolled successfully with prospective bundled payments. Through September 2017, 94% of patients completed the pilot with 6% still enrolled. Manual pilot processes required more effort than anticipated; claims processing was the most time-consuming activity. The production of a bundle bill took an additional 15 minutes versus FFS billing. The average payment cycle time was 37 days (range, 15 to 141 days) compared with a 15-day average under FFS.
Conclusion:
Prospective bundled payments were successfully implemented in this pilot. Additional pilots should study this payment method in higher-volume cancers. Robust systems are needed to automate patient identification, enrollment, billing, and payment along with policies that reduce administrative burden and allow for the introduction of novel cancer therapies.
The Affordable Care Act of 2010 (ACA) was designed primarily to improve patient access to affordable health care. The access-expanding provisions of the ACA included federal- and state-based health insurance exchanges with minimum coverage requirements and preexisting disease protection clauses. One effect of these access-expanding measures has been increased costs for insurers. Narrow networks, which limit patient access to certain hospitals and physician groups, represent a strategy for insurers to remain competitive in the face of increased costs. Narrow networks lower insurance premiums, in part by funneling patients toward lower-cost providers. We previously hypothesized that narrow networks might be used to adversely select against the enrollment of patients with costly chronic diseases like cancer and found that narrow networks commonly excluded stand-alone cancer hospitals, such as Memorial Sloan Kettering Cancer Center and the University of Texas MD Anderson Cancer Center. The exclusion of National Center Institute (NCI) designated cancer centers from narrow health plans is a symptom that our cancer care delivery system remains broken after the ACA. Whether we see a replacement for the ACA or a completely new health care law, the focus moving forward should be on transparency, insurance literacy, and value for patients—the best outcomes at the lowest cost.
Nikhil G. Thaker, Tariq N. Ali, Michael E. Porter, Thomas W. Feeley, Robert S. Kaplan and Steven J. Frank
Question: Can we create a value-based tool to visualize the outcomes and cost of various treatments that could facilitate patient-centered decision making?
Summary Answer: We developed a standardized value framework by using radar charts to visualize and communicate a wide range of patient outcomes and cost for three forms of prostate cancer treatment.
In 2014, The University of Texas MD Anderson Cancer Center created a streamlined process for developing measure sets for patient-centered outcomes, including provider-generated and patient-reported outcomes, at an accelerated pace. These comprehensive sets are integrated with electronic health records and incorporated into clinical practice, and they will underpin internal quality improvement and external benchmarking efforts.
Joanne Disch, Thomas W. Feeley, Diana J. Mason, Richard L. Schilsky, Ellen L. Stovall and Shelley Fuld Nasso
"What Health System Transformations Do You Believe Are Necessary for the Future of Health Care?" We need to transform to a true value-based health care delivery system. That means organizing care around medical conditions, not simply around hospitals and doctors. We need to do more team-based medicine and to better integrate specialty care with primary care. We need to be doing a better job measuring health outcomes that matter to patients, which includes patient-reported outcomes and clinician-reported outcomes. These need to be used for internal improvement in health care delivery organizations, as well as for public reporting, so that patients can make informed choices about their health care. We need to do a better job measuring, reporting and controlling the costs of health care so that our economy can improve and so that patients can make informed decisions. We must move away from fee-for-service reimbursement, which incentivizes doing more, and begin paying for good outcomes. Health care organizations need to stop duplicating every service and have centers of excellence with high-volume experts. Finally, we need better health information technology systems to facilitate knowledge transmission and communication.
Disch, Joanne, Thomas W. Feeley, Diana J. Mason, Richard L. Schilsky, Ellen L. Stovall, and Shelley Fuld Nasso. "Transformation of Health Care—Perspectives of Opinion Leaders." Seminars in Oncology Nursing 32, no. 2 (May 2016): 172–182.
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Stephen M. Schleicher, Nancy M. Wood, Seohyun Lee and Thomas W. Feeley
The Patient Protection and Affordable Care Act (ACA), passed in 2010, contained a number of provisions with potential to directly or indirectly affect cancer care. Value for patients was widely discussed throughout the bill, and the Centers for Medicare and Medicaid Services (CMS) indicated that CMS embraces value as a priority. Nonetheless, serious questions remain as to whether the ACA has improved the value Americans receive in cancer care. Value in cancer care balances outcomes that matter to patients and the costs incurred to achieve those outcomes. Here we review the goals of each cancer provision of the ACA and discuss the effects each has had to date.
Fayanju M. Oluwadamilola, Tinisha L. Mayo, Tracy E. Spinks, Seohyun Lee, Carlos H. Barcenas, Benjamin D. Smith, Sharon H. Giordano, Rosa F. Hwang, Richard A. Ehlers, Jesse C. Selber, Ronald Walters, Debu Tripathy, Kelly K. Hunt, Thomas A. Buchholz, Thomas W. Feeley and Henry M. Kuerer
Purpose. Value in healthcare—i.e., patient-centered outcomes achieved per healthcare dollar spent—can define quality and unify performance improvement goals with health outcomes of importance to patients across the entire cycle of care. We describe the process through which value-based measures for breast cancer patients and dynamic capture of these metrics via our new electronic health record (EHR) were developed at our institution. Methods. Contemporary breast cancer literature on treatment options, expected outcomes, and potential complications was extensively reviewed. Patient perspective was obtained via focus groups. Multidisciplinary physician teams met to inform a 3-phase process of (1) concept development, (2) measure specification, and (3) implementation via EHR integration. Results. Outcomes were divided into 3 tiers that reflect the entire cycle of care: (1) health status achieved, (2) process of recovery, and (3) sustainability of health. Within these tiers, 22 patient-centered outcomes were defined with inclusion/exclusion criteria and specifications for reporting. Patient data sources will include the Epic Systems EHR and validated patient-reported outcome questionnaires administered via our institution’s patient portal. Conclusions. As healthcare costs continue to rise in the United States and around the world, a value-based approach with explicit, transparently reported patient outcomes will not only create opportunities for performance improvement but will also enable benchmarking across providers, healthcare systems, and even countries. Similar value-based breast cancer care frameworks are also being pursued internationally.
Oluwadamilola, Fayanju M., Tinisha L. Mayo, Tracy E. Spinks, Seohyun Lee, Carlos H. Barcenas, Benjamin D. Smith, Sharon H. Giordano, Rosa F. Hwang, Richard A. Ehlers, Jesse C. Selber, Ronald Walters, Debu Tripathy, Kelly K. Hunt, Thomas A. Buchholz, Thomas W. Feeley, and Henry M. Kuerer. "Value-Based Breast Cancer Care: A Multidisciplinary Approach for Defining Patient-Centered Outcomes."Annals of Surgical Oncology 23, no. 8 (August 2016). (Published online early, March 15, 2016.)
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Katy E. French, Alexis B. Guzman, Augustin C. Rubio, John C. Frenzel and Thomas Feeley
Background:
With the movement towards bundled payments, stakeholders should know the true cost of the care they deliver. Time-driven activity-based costing (TDABC) can be used to estimate costs for each episode of care. In this analysis, TDABC is used to both estimate the costs of anesthesia care and identify the primary drivers of the costs of 11 common oncologic outpatient surgical procedures.
Methods:
Personnel cost was calculated by determining the hourly cost of each provider and the associated process time of the 11 surgical procedures. Using the anesthesia record, drugs, supplies and equipment costs were identified and calculated. The current staffing model was used to determine baseline personnel costs for each procedure. Using the costs identified through TDABC analysis, the effect of different staffing ratios on anesthesia costs could be predicted.
Results:
Costs for each of the procedures were determined. Process time and costs are linearly related. Personnel represented 79% of overall cost while drugs, supplies, and equipment represented the remaining 21%. Changing staffing ratios shows potential savings between 13% and 28% across the 11 procedures.
Conclusions:
TDABC can be used to estimate the costs of anesthesia care. This costing information is critical to assessing the anesthesiology component in a bundled payment. It can also be used to identify areas of cost savings and model costs of anesthesia care. Certified Registered Nurse Anesthetist (CRNA) to anesthesiologist staffing ratios profoundly influence the cost of care. This methodology could be applied to other medical specialties to help determine costs in the setting of bundled payments.
Robert S. Kaplan, Catherine H. MacLean, Alexander Dresner, Derek A. Haas and Thomas W. Feeley
Many health care organizations are striving to implement a value agenda that delivers better patient outcomes at lower cost, medical condition by medical condition. To accelerate the dissemination and adoption of the value agenda, across many more medical conditions, leading institutions, such as MD Anderson Cancer Center and the Hospital for Special Surgery, have established a new central office to oversee the creation of all the capabilities and information for measuring and improving outcomes and cost, setting priorities for continuous improvement projects, facilitating the creation of value-based payment models with insurers and employers, and ensuring that new information technology platforms are aligned with the value agenda.
Kaplan, Robert S., Catherine H. MacLean, Alexander Dresner, Derek A. Haas, and Thomas W. Feeley. "Health Care Providers Need a Value Management Office."Harvard Business Review (website) (December 2, 2015). (Part of the “Leading Change in Health Care” series, a collaboration of the editors of Harvard Business Review and NEJM Group.)
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This case study describes the development of a bundled reimbursement pilot for head and neck cancer patients treated at the University of Texas MD Anderson Cancer Center. The study describes the steps involved and the challenges to new alternative payment models in healthcare reimbursement.
Kathleen Carberry, Zachary Landman, Michelle Xie, Thomas W. Feeley, John Henderson and Charles Fraser Jr.
Patient-centered outcomes measurement provides healthcare organizations with crucial information for increasing value for patients; however, organizations have struggled to obtain outcomes data from electronic health record (EHR) systems. This study describes how Texas Children's Hospital customized a commercial EHR system and assembled a cross-functional team to capture outcomes data using existing functionality. Prior to its installation and customization, no surgical subspecialties besides the congenital heart and transplant surgery groups conducted prospective, patient outcomes measurement, but by 2015, the outcomes of over 1300 unique patients with supracondylar fractures, cleft lip and/or palate, or voiding dysfunction had been tracked. Key factors for integrating outcomes measurement into the clinical workflow include ongoing communication between cross-functional teams composed of clinicians and technical professionals, an iterative design process, organizational commitment, and prioritizing measurement as early as possible during EHR optimization.
Time-driven activity-based costing (TDABC) is an innovative costing tool in healthcare that can be used to directly compare the true cost of competing technologies over the full care cycle. Rather than only comparing therapeutic effectiveness over a limited number of outcome measures, healthcare stakeholders will need to move toward comparing the value of care delivery and therefore the cost of therapies. Measuring the value of advanced technologies like proton beam therapy versus intensity-modulated radiation therapy (IMRT) is especially crucial, given the high upfront cost of developing, building, and delivering care with these modalities. An incomplete understanding of the value of costly, yet effective, technologies could impede medical innovation and decrease the quality of cancer care through a reduction of patient access by third-party payers. With TDABC, providers may begin to uncover clinical situations in which higher-cost, advanced therapies are actually justified over the full episodic care cycle. Understanding provider costs will become even more important as healthcare reform transitions to value-based purchasing.
Robert S. Kaplan, Mary L. Witkowski, Megan Abbott, Alexis Guzman, Laurence Higgins, John Meara, Erin Padden, Apurva Shah, Peter Waters, Marco Weidemeier, Samuel Wertheimer and Thomas W. Feeley
As healthcare providers cope with pricing pressures and increased accountability for performance, they should be rededicating themselves to improving the value they deliver to their patients: better outcomes and lower costs. Time-driven activity-based costing offers the potential for clinicians to redesign their care processes toward that end. This costing approach, however, is new to healthcare and has not yet been systematically implemented and evaluated. This article describes early time-driven activity-based costing work at several leading healthcare organizations in the United States and Europe. It identifies the opportunities they found to improve value for patients and demonstrates how this costing method can serve as the foundation for new bundled payment reimbursement approaches.
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.
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.)
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Heidi W. Albright, Mark Moreno, Thomas W. Feeley, Ronald Walters, Marc Samuels, Alissa Pereira and Thomas W. Burke
In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. This legislation attempts to address cost control and improve the quality of healthcare in the United States. Cancer is a major health problem in the United States and the leading cause of death for
Americans under the age of 80. Therefore, cancer care providers need to be fully engaged in ongoing discussions regarding quality measurement and care delivery.With the optimum level of collaboration and support, the proposals in the legislation can be properly structured to deliver improved access to care via better delivery systems, as well as
more appropriate reimbursement to advance the prevention and treatment of cancer.
Thomas W. Feeley, Heidi Albright, Ronald Walters and Thomas W. Burke
Value-based healthcare delivery is being discussed in a variety of healthcare forums. This concept is of great importance in the reform of the US healthcare delivery system. Defining and applying the principles of value-based competition in healthcare delivery models will permit future evaluation of various delivery applications. However, there are relatively few examples of how to apply these principles to an existing care delivery system. In this article, we describe an approach for assessing the value created when treating cancer patients in a multidisciplinary care setting within a comprehensive cancer center. We describe the analysis of a multidisciplinary care center that treats head and neck cancers, and we attempt to examine how this center integrates with Porter and Teisberg's (2006) concept of value-based competition based on the results analysis. Using the relationship between outcomes and costs as the definition of value, we developed a methodology to analyze proposed outcomes for a population of patients treated using a multidisciplinary approach, and we matched those outcomes to the costs of the care provided. We present this work as a model for defining value for a subset of patients undergoing active treatment. The method can be applied not only to head and neck treatments, but to other modalities as well. Public reporting of this type of data for a variety of conditions can lead to improved competition in the healthcare marketplace and, as a result, improve outcomes and decrease health expenditures.
Feeley, Thomas W., Heidi Albright, Ronald Walters, and Thomas W. Burke. "A Method for Defining Value in Healthcare Using Cancer Care as a Model."Journal of Healthcare Management 55, no. 6 (November–December 2010): 399–412. (This article won the Edgar C. Hayhow Award from the American College of Healthcare Executive in 2012 as the article of the year in the Journal of Healthcare Management.)
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Tracy E. Spinks, Ronald Walters, Thomas W. Feeley, Heidi Wied Albright, Victoria S. Jordan, John Bingham and Thomas W. Burke
Historically, quality measures for cancer have followed a different route than overall quality measures in the health care system. Many specialized cancer treatment centers were exempt from standard reporting on quality measures because of the complexity of cancer. Additionally, it has been difficult to create meaningful quality measures
for cancer because the disease can strike so many different organs; is discovered at and progresses through different stages; and is treated using different modalities, such as surgery, radiation, and chemotherapy. Over the past decade the National Quality Forum, a nonprofit organization dedicated to bettering the quality of US health care, has
endorsed measures of quality for cancer providers and patients. The Affordable Care Act of 2010, which has sections specific to cancer reporting, will also further the development and public reporting of cancer quality measures—important steps in improving the delivery of cancer care.
Tracy E. Spinks, Heidi W. Albright, Thomas W. Feeley, Ron Walters, Thomas W. Burke, Thomas Aloia, Eduardo Bruera, Aman Buzdar, Lewis Foxhall, David Hui, Barbara Summers, Alma Rodriguez, Raymond DuBois and Kenneth I. Shine
Responding to growing concerns regarding the safety, quality, and efficacy of cancer care in the United States, the Institute of Medicine (IOM) of the National Academy of Sciences commissioned a comprehensive review of cancer care delivery in the US health care system in the late 1990s. The National Cancer Policy Board (NCPB), a 20-member board with broad representation, performed this review. In its review, the NCPB focused on the state of cancer care delivery at that time, its shortcomings, and ways to measure and improve the quality of cancer care. The NCPB described an ideal cancer care system in which patients would have equitable access to coordinated, guideline-based care and novel therapies throughout the course of their disease. In 1999, the IOM published the results of this review in its influential report, Ensuring Quality Cancer Care. The report outlined 10 recommendations, which, when implemented, would: 1) improve the quality of cancer care, 2) increase the current understanding of quality cancer care, and 3) reduce or eliminate access barriers to quality cancer care. Despite the fervor generated by this report, there are lingering doubts regarding the safety and quality of cancer care in the United States today. Increased awareness of medical errors and barriers to quality care, coupled with escalating health care costs, has prompted national efforts to reform the health care system. These efforts by health care providers and policymakers should bridge the gap between the ideal state described in Ensuring Quality Cancer Care and the current state of cancer care in the United States.
Ronald S. Walters, Heidi W. Albright, Randal S. Weber, Thomas W. Feeley, Ehab Y. Hanna, Scott B. Cantor, Carol M. Lewis and Thomas W. Burke
The health care industry, including consumers, providers, and payers of health care, recognize the importance of developing meaningful, patient-centered measures. This article describes our experience using an existing electronic medical record largely based on free text formats without structured documentation, in conjunction with tumor registry abstraction techniques, to obtain and analyze data for use in clinical improvement and public reporting.
Methods
We performed a retrospective analysis of 2467 previously untreated patients treated with curative intent who presented with laryngeal, pharyngeal, or oral cavity cancer in order to develop a system to monitor and report meaningful outcome metrics of head and neck cancer treatment. Patients treated between 1995 and 2006 were analyzed for the primary outcomes of survival at 1 and 2 years, the ability to speak at 1 year posttreatment, and the ability to swallow at 1 year posttreatment.
Results
We encountered significant limitations in clinical documentation because of the lack of standardization of meaningful measures, as well limitations with data abstraction using a retrospective approach to reporting measures. Almost 5000 person-hours were required for data abstraction, quality review, and reporting, at a cost of approximately $134,000. Our multidisciplinary teams document extensive patient information; however, data is not stored in easily accessible formats for measurement, comparison, and reporting.
Conclusion
We recommend identifying measures meaningful to patients, providers, and payers to be documented throughout the patients' entire treatment cycle, and significant investment in the improvements to electronic medical records and tumor registry reporting in order to provide meaningful quality measures for the future.
Thomas W. Feeley, George W. Sledge, Laura Levit and Patricia A. Ganz
A recent report from the Institute of Medicine titled Delivering High-Quality Cancer Care: Charting a New Course for a System in Crisis, identifies improvement in information technology (IT) as essential to improving the quality of cancer care in America. The report calls for implementation of a learning healthcare IT system: a system that supports patient–clinician interactions by providing patients and clinicians with the information and tools necessary to make well informed medical decisions and to support quality measurement and improvement. While some elements needed for a learning healthcare system are already in place for cancer, they are incompletely implemented, have functional deficiencies, and are not integrated in a way that creates a true learning healthcare system. To achieve the goal of a learning cancer care delivery system, clinicians, professional organizations, government, and the IT industry will have to partner, develop, and incentivize participation.
Katy E. French, Heidi W. Albright, John C. Frenzel, James R. Incalcaterra, Augustin C. Rubio, Jessica F. Jones and Thomas W. Feeley
Background: The value and impact of process improvement initiatives are difficult to quantify. We describe the use of time-driven activity-based costing(TDABC)in a clinical setting to quantify the value of process improvements in terms of cost, time and personnel resources.
Problem: Difficulty in identifying and measuring the cost savings of process improvement initiatives in a Preoperative Assessment Center(PAC).
Goals: Use TDABC to measure the value of process improvement initiatives that reduce the costs of performing a preoperative assessment while maintaining the quality of the assessment.
Strategy: Apply the principles of TDABC in a PAC to measure the value, from baseline, of two phases of performance improvement initiatives and determine the impact of each implementation in terms of cost, time and efficiency.
Results: Through two rounds of performance improvements, we quantified an overall reduction in time spent by patient and personnel of 33% that resulted in a 46% reduction in the costs of providing care in the center. The performance improvements resulted in a 17% decrease in the total number of full time equivalents (FTE's) needed to staff the center and a 19% increase in the numbers of patients assessed in the center. Quality of care, as assessed by the rate of cancellations on the day of surgery, was not adversely impacted by the process improvements.
Implication:
• TDABC can be applied in a health care setting.
• TDABC allows for quantification of value in process improvements.
• TDABC allows one to evaluate the value of identified process improvements.
Tracy Spinks, Patricia Ganz, George Sledge, Laura Levit, James Hayman, Timothy Eberlein and Thomas W. Feeley
In 1999, the Institute of Medicine (IOM) published Ensuring Quality Cancer Care, an influential report that described an ideal cancer care system and issued ten recommendations to address pervasive gaps in the understanding and delivery of quality cancer care. Despite generating much fervor, the report's recommendations—including two recommendations related to quality measurement—remain largely unfulfilled.
Amidst continuing concerns regarding increasing costs and questionable quality of care, the IOM charged a new committee with revisiting the 1999 report and with reassessing national cancer care, with a focus on the aging US population. The committee identified high-quality patient–clinician relationships and interactions as central drivers of quality and attributed existing quality gaps, in part, to the nation's inability to measure and improve cancer care delivery in a systematic way. In 2013, the committee published its findings in Delivering High-Quality Cancer Care: Charting a New Course for a System in Crisis, which included two recommendations that emphasize coordinated, patient-centered quality measurement and information technology enhancements:
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Develop a national quality reporting program for cancer care as part of a learning health care system; and
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Develop an ethically sound learning health care information technology system for cancer that enables real-time analysis of data from cancer patients in a variety of care settings.
These recommendations underscore the need for independent national oversight, public–private collaboration, and substantial funding to create robust, patient-centered quality measurement and learning enterprises to improve the quality, accessibility, and affordability of cancer care in America.
Lavinia Middleton, Thomas W. Feeley, Heidi W. Albright, Ronald Walters and Stanley Hamilton
We have a crisis in health care delivery, originating from increasing health care costs and inconsistent quality-of-care measures. During the past several years, value-based health care delivery has gained increasing attention as an approach to control costs and improve quality. One proven way to control costs and improve the quality of health care is subspecialty pathologic review of patients with cancer before initiation of therapy. Our study examined the diagnostic error rate among patients with cancer treated at a tertiary care hospital and demonstrated the value of subspecialty pathologic review before initiation of treatment.
Methods: From September 1 to September 30, 2011, all patients seeking a clinical consultation had pathology submitted to and reviewed by a pathologist with subspecialty expertise and correlated in our pathology database.
Results: A total of 2,718 patient cases were reviewed during September 2011. There was agreement between the original pathologist and our departmental subspecialty pathologist in 75% of cases. In 25% of cases, there was a discrepancy between the original pathology report and the subspecialty final pathology report; 509 changes in diagnosis were minor discrepancies (18.7%), and in 6.2% of patients (169 reports), the change in diagnosis represented a major discrepancy that potentially affected patient care.
Conclusion: Second review of a patient's outside pathology by a subspecialist pathologist demonstrates the value of multidisciplinary cancer care in a high-volume comprehensive cancer center. The second review improves clinical outcomes by providing patients with evidence-based treatment plans for their precise pathologic diagnoses.
Since its establishment in 2005, Hamburg’s Martini Klinik had single mindedly focused on prostate cancer care with a commitment to measure long-term health outcomes for every patient. A wholly owned subsidiary of the University Hospital Hamburg, Martini Klinik was a “hospital in a hospital” in close proximity to other medical departments and services. By 2019, Martini Klinik had become the largest prostate cancer treatment program in the world with 8,000 outpatient cases and more than 2,500 surgical cases annually. Patients came from all over Germany and from around the world. A new and expanded facility was under construction to have the capacity to manage more patients with prostate cancer.
Robert S. Kaplan, Michael E. Porter, Thomas W. Feeley and Alee Hernandez
Medtronic is adapting its strategy to changes in healthcare competition and payments. It has decided to develop new relationships with payers, hospitals, and physicians to become more accountable for patient outcomes and total costs. The case describes new forms of partnerships for therapy optimization, management of acute care episodes, and management of chronic care patients. The case also illustrates how integrated practice units (IPUs) provide focused, comprehensive care for two high-volume and expensive medical conditions: type-1 diabetes and morbid obesity.
Children’s Hospital of Philadelphia (CHOP) began as a stand-alone hospital in the heart of downtown Philadelphia in 1855. By 2016 the CHOP Care Network stretched across Pennsylvania, New Jersey, and the New York metropolitan area, providing a wide range of services from primary care to complex specialty care. In 2016, U.S. News and World Report had ranked CHOP as the number 2 pediatric hospital in the nation and among the top 10 in 10 pediatric specialties. CHOP’s residency program for training pediatricians was also ranked number one in the country. Madeline Bell, who had been President and Chief Operating Officer, was named Chief Executive Officer in 2015. A pediatric nurse who became a hospital administrator, Bell saw the network as a means to serve more patients, improve pediatric care, and address the challenges posed by a rapidly changing health care environment.
