Value in Healthcare – Some GlobalPerspectives

March 2016

1

Value

Outcomes thatmatter to patients

=

Cost incurred

Value Based Healthcare - A simple proposition

2

6x 2008/09OECD mean

3x 2008/09OECD mean

2x 2008/09OECD mean

2008/09OECD Mean

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Ubiquity of variation suggests there is an opportunity

Spending Health outcomes Ave Length of Stay(example of clinical practice)

2008/09 OECD Health indicators

Source: OECD Stat Extracts, http://stats.oecd.org/

OECD Countries

3

What do we mean by outcomes

Mortality

Provider reported adverse events• Complications, iatrogenic events, readmission

Patient reported outcome measures (PROMs)• Health-Related Quality of life• Functional ability – ADL• Economic activity and social engagement

+ Consistency over time

4

The opportunities for mortality reduction are diminishing ...

10,000

Total Potential Years of Life Lost p 100,000

15,000

5,000

0

Total health expenditure /capita, US$ PPP

8,0006,0004,0002,0000

Highest value

Lowest value

Source: stats.oecd.org

USA 2004-2007USA 2000-2003USA 1990-1999

USA 2008-20102004-20072000-20031990-1999

2008-2010

Australia

OECD Countries

5

75.5

43.3

94.0

80.0

50.0

94.0

34.7

6.5

95.0

0

10

20

30

40

50

60

70

80

90

100

However, for many diseases we need to move beyondmortality

Swedish data rough estimates from graphs; Source: National quality report for the year of diagnosis 2012 from the National Prostate Cancer Register(NPCR) Sweden, Martini Klinik, BARMER GEK Report Krankenhaus 2012, Patient-reported outcomes (EORTC-PSM), 1 year after treatment, 2010

1 yr severe erectile dysfunction

%

1 yr incontinence5 year survival

Best-in-class: Martini KlinikGermany Sweden

Focussing onmortality alone…

…may obscure large differencesin outcomes that matter most to patients

6

Impact of the Swedish cataract registry – avoidingunnecessary surgery

Source: NIKE: a new clinical tool for establishing levels of indications for cataract surgery, Mats Lundstrom, Susanne Albrecht, Ingemar Hakansson, Ragnhild Lorefors, Sven Ohlsson, Werner Polland,Andrea Schmid, Goran Svensson and Eva Wendel, Acta Ophthalmol. Scand. 2006: 84: 495–501, The Role of Value for Money in Public Insurance Coverage Decisions for Drugs in Australia: ARetrospective Analysis 1994-2004, Anthony H. Harris, MSc, Suzanne R. Hill, PhD, Geoffrey Chin, MPH, Jing Jing Li, BPharm, Emily Walkom, PhD, Costed infrastructure options for Australian clinicalquality registries, Australian Commission on Safety and Quality in Health Care, AIHW The burden of disease and injury in Australia, 2003 YLD by disease.

Mea

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-0.19

-1.06-1.96

-0.20

-1.38-1.69

IG4IG3IG2IG1IG4IG3IG2IG1

After surgeryBefore surgery

Indication:Cataract symptoms(0 = fewest symptoms)

Indication:Independence

(0 = most independent)

"In IG 4 some item areas (perceiveddifficulties in day-to-day life and

cataract symptoms) evendeteriorated after surgery"

Swedish Cataract surgeries('000s)

60

40

20

02010

potential

50

Potentialreducedsurgeries

8

2010estimated

58

4%

54%

28%

14%

IG1IG2IG3IG4

AUD $m acutecosts per year

8

6

4

2

0Potential

disinvestment

$8m$950

Averagecost of

CataractSurgery inSweden

=

NIKE identified four indication groups (IGs) withcommon responses to surgery...

...which created the potential for $8m per yearin savings

7

Sometimes the greatest value is in demonstrating thatoutcomes don’t differ systematically

1. Fecal occult blood test 2. Colonoscopies may be performed for indications other than suspected colo-rectal cancer Note: Chart excludes Latrobe-Moe as a significant outlierSource: VAED, MBS, Victorian cancer registry, BCG analysis

0.0

0.2

0.4

0.6

0.8

1.0

0 100 200 300 400 500 600 700 800

Cas

e fa

talit

y ra

te

Number of Colonoscopies per diagnosis

Pyrenees (S) - North

Greater Geelong (C) - Pt B

Yarra Ranges (S) - Seville

Port Phillip (C) - West

Mornington P’sula (S) - West

Maroondah (C) - Ringwood

Manningham (C) - West

Glen Eira (C) - South

Brimbank (C) - Sunshine

Size of ball represents thenumber of diagnosed cases inan SLA between 2007/08 –2010/11

Av No of colonoscopies perdiagnosis

Relationships between diagnostic colonoscopy rates, and colo-rectal cancer incidence and mortality(four year total 2007/08 – 2010/11)

Metro Rural Ratio47.4 14.0 3.4

UK NHS target

8

Australia already has some successes - Hip and Kneearthroplasty

Source: Health Outcomes Australia analysis; AOANJRR registry data

Overall reduction for knee replacement revision burdenfrom 9% to 7.7%

(3900 avoided revision surgeries)

Cru

de p

erce

ntag

e of

revi

sion

s**

7

7.2

7.4

7.6

7.8

8

8.2

8.4

8.6

8.8

9

9.2

1 2 3 4 5 6 7 8 9 10 11 12 13

Years from baseline (1998)

Overall reduction for hip replacement revision burdenfrom 13.2% to 10.2%

(6700 avoided revision surgeries)

Cru

de p

erce

ntag

e of

revi

sion

s**

6

7

8

9

10

11

12

13

14

1 2 3 4 5 6 7 8 9 10 11 12 13

Years from baseline (1998)

Repeat hospitalisation costs avoided alone amount to $240m

9

Surgeon feedback component alone worth $75 million, at acost of ~$15m

Note: Years of life saved discounted by 3% p.a.; Figures in 2014 dollars, including VSLY unitSource Health Outcomes analysis. OBPR protocol

$000 Cumulative

Net return attributed

Internal Rate of Return 29%

Total benefits$89m

Total costs (from 2000)$14.5m

Year Benefit tocost ratio

1999-2014 6:1

-20000

0

20000

40000

60000

80000

1999-2009 2010 2011 2012 2013 2014

Cumulative Benefits & Costs attributed to AOANJRR

Cumulative total costs Column1 Column2 Cumulative net run rate

Costs accrued from 1999

10

Drives development of internationalstandard sets

• Organizes global teams of physicianleaders, outcomes researchers andpatient advocates per medical condition

• Ongoing support / updates to standards

Certifies IT solution providers throughtheir Certified Suppliers program

Enables global benchmarking and datasharing through a common platform

Provides practical implementationsupport for ICHOM standard sets

• Works closely with local clinicians andprovider organisations to helpmeasure, analyse and feedbackoutcomes

Tailors IT solution implementation, inpartnership with Pulse Infoframe

Drives advanced analytics & reporting• Risk adjustment and comparison

across similar patients• Identification of best practices

Global networks of innovation institutes• Workshops and remote coaching with

executive, clinical and ops teams• Coordinate support and participation in

working groups

Build local implementation networks• Coordinate stakeholders/players and

build coalitions for measurement• Clinician engagement to build momentum• Deliver on-the-ground, local support to

drive execution of project

ICHOM focuses on global standards & benchmarking;Health Outcomes provides support for local implementation

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Developed 12 Standard Sets thus far, covering 35% of theglobal disease burden

2016targets

▪ Dementia▪ Frail elderly care▪ Heart Failure

▪ Pregnancy and childbirth▪ Breast cancer▪ Colon cancer

▪ Overactive bladder &incontinence

▪ Inflammatory boweldisease

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Global uptake of standard sets circa Jan 2015

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Global movement rapidly gaining pace – driven by three keyfactors

Maturity : Outcomes measurement well developed for many years in Academianow being used for:

• Clinician feedback• Health system decision-making• Long term structural efficiency improvement• Patient communication

Scale : Coalescence of measurement initiatives across hospitals, cities andprovinces, and now countriesICHOM creates virtual scale

Technology : Digitisation of health information makes it cheaper and quicker tocollect store and analyseTechnology provides new cost effective way to collect data from patients

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Where might we get to?

400 pages of comparisons betweenevery health service region in Sweden

170 different conditions covered

Population health, behaviour, clinicaland patient reported outcomes covered

Produced every 2 years

Data drill down available that allowscomparison of individual hospitals,patient subsets and managingclinicians

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Example comparisons produced

Bowel cancer Cataracts