Six approaches to value-based health
A thousand healthcare executives participated in a survey by the IBM Institute for Business Value about their transition to a value-based model of health.
This radical transformation has both provider and payer organizations reorienting their work away from the volume of care they deliver and focusing instead on promoting wellness and achieving better outcomes when care is necessary.
Successful organizations are finding that technology—particularly data, AI and analytics—can unleash incredible potential for reinventing care. Six approaches have proven particularly effective to achieving this transformation:
- Consult the consumer
- Build support for analytics
- Embrace empathetic automation
- Focus on time to value
- Overcome innovation barriers
- Optimize the value equation
Payers and providers are seeking dramatically different ways to achieve better health across the populations they serve, while also bringing new clarity and effectiveness to their organizations.
Through new technology and operational innovations, organizations are extending their reach beyond traditional medical facilities—taking health and wellness into their consumers’ daily lives and their communities.
“We see improved patient engagement with this new value-based model, as consumers are involved in the decision-making process and feel more satisfied.”
- Chief technology officer, US payer organization
Consult the consumer
While value-based health places its greatest emphasis on improving experience and outcomes for individuals, both payer and provider organizations surveyed by IBM acknowledged that these consumers are not yet their top stakeholders.
At the moment, payers consider providers to be their top collaborators, while providers place payers in the top spot. Consumers come in at a close second. Acknowledging how great the pressure is to serve this population first and foremost, both providers and payers said that, within three to five years, consumers will be their top stakeholders for collaboration.
Executives who say patients are their No. 1 stakeholder today
Mature Providers 80%
Beginner Providers 87%
Mature Payer 84%
Beginner Payer 76%
Executives who say patients are their No. 1 stakeholder in 3-5 years
Mature Providers 97%
Beginner Providers 93%
Mature Payer 87%
Beginner Payer 89%
The speed and importance of this shift underscores the industry’s recognition that it needs to move away from the practices that prevailed in the fee-for-service era. Consumers are no longer just drivers of revenue—they are essential partners in promoting their own health and wellness. To spur better behaviors and outcomes in this population, successful providers and payers are finding new ways to understand their patients and members.
Consumer engagement has become as much a focus as treatment. To drive long-term health, providers and payers need a more holistic view of their patients and members. Technology presents an unmatched opportunity to foster such connections. At the same time, as technology fosters increasing collaboration with patients and consumers, they expect quicker, more personalized interactions and services from their healthcare organizations.
Technology is proving crucial in facilitating these interactions to deliver greater value and greater insights for the organization and its patients or members.
Steps to building a consumer-centric approach:
- Set a consumer engagement strategy. Healthcare organizations need to find ways to support consumers in developing healthier habits, which will save resources on both sides, while empowering individuals to follow doctors’ orders and live better. Improved communication is the most important step to influencing patient decisions, followed by the creation of curated health resources that can address specific needs for each patient.
- Create individually tailored programs. After developing a new rapport with consumers, providers and payers need to go a level deeper and find ways to create individualized health programs that empower consumers to change behaviors, stick to medical regimens and sustain healthy lifestyles. This effort requires new levels of input from patients and their caregivers. There must also be new ways to gather feedback, ensuring satisfaction with care protocols that accommodate each patient’s circumstances.
- Develop and analyze multiple data streams. As personalized programs become operational, healthcare organizations must be sure to gather all incoming data. Additional technologies, like next-generation chatbots and deep-learning analysis, can help healthcare professionals develop and refine more effective practices. Metrics can then be deployed across healthcare organizations to vet effective outcomes, as well as allow for continued optimization.
“The value-based model helps in monitoring and accomplishing better population health, where the target is focused on health outcomes and efficiency.”
- Chief nursing officer, Danish provider organization
Build support for analytics
Healthcare organizations have always collected vast amounts of data. While all the information can seem hard to manage, more than 90% of C-suite officers surveyed by IBM believed access to data and metrics would not add to their organization’s administrative burdens. Among chief information officers, only 3% worried about data inundation, while 4% of chief administrative officers feared data would create additional work.
Many healthcare organizations are pursuing digital transformation precisely because they want to better leverage their data. Whether organizations tame or succumb to their data largely depends on the systems put in place to manage it. Even the best technology can achieve only so much without the right approach or right support. Clinicians and administrators can be particularly sensitive to any gaps or imperfections that may arise.
Data access across the ecosystem is key to optimizing health outcomes
Successful organizations focus on putting what data is available to the best use and continuously improving on it rather than waiting for the perfect data, benchmarks or analysis. Oftentimes, this doesn’t exist and can even create a paralysis of perfection that hobbles progress.
It takes proper preparation, clear explanation and constant education to help clinicians, administrators and executives overcome their uncertainty and focus on the considerable insights data can deliver. Leaders also need to ensure that appropriate time is spent deriving value and insights from the data, and not simply collecting it.
To break down silos and support analytics, organizations should:
- Develop an analytics vision. Organizations must be able to tap into structured and unstructured data, with results that are integrated, consistent and reliable. Alignment across clinical and social settings is especially important to ensure consistent experiences for patients and consistent information flow. Across the organization, stakeholders must come together to tailor the information agenda to their specific needs, as well as cross-departmentally. This cohesiveness will accelerate the ability to deliver trusted information to the C-suite between departments and on the front line.
- Empower an analytics champion. Metrics can still be viewed as confusing, intimidating or onerous. Leadership may recognize the importance of this work, but without one or more champions for analytics within the C-suite, complete alignment and uptake will be difficult to achieve. Creating a visible role for data and measurement at the top helps create a culture across the organization of its centrality to all work.
- Create a governance process. Once data is collected, it must remain organized and owned to maintain usefulness. Create leaders and teams at all levels who will ensure standardization and allow for quick insights and action on new data and trends.
“The clinical time is decreased in value-based care through automationand supply chain analysis.”
- Chief medical officer, German provider organization
Embrace empathetic automation
Healthcare organizations, like all enterprises, are turning to automation with the goals of boosting efficiency and productivity—while also facing some added challenges that other industries don’t have.
Payers and providers are acutely focused on automating tasks that are behind the scenes or peripheral to frontline care. Creating systems that reduce workloads and rote tasks for clinicians, scientists and other workers frees them to focus on their greatest value: providing care and healing. That’s the work for which medical staff remain uniquely qualified.
Technology can help focus all aspects of care on the patient
Healthcare’s Triple Aim of lowering costs, improving experience and enhancing population health is another area where automation can help, with an emerging fourth benefit: improving clinician satisfaction.
It can cost between USD 800,000 and USD 1.3 million to hire and train new doctors and clinical staff, depending on specialization, not to mention the risk of medical errors and other issues when workers are burned out or unhappy. Reducing this burden through automation can be among the most worthwhile efforts payers and providers undertake.
Healthcare has the added challenge that, in dealing directly with people, it can’t simply lift and shift solutions from other industries. Organizations must ensure that automation solutions are sensitive and supportive of human needs in clinical settings.
To embrace automation that’s empathetic:
- Set achievable automation goals. An important step to building support for automation is to achieve some simple, early successes that nonetheless have meaningful impact on employees’ workdays. Winning them over early not only has an immediate impact, it also creates support for more ambitious, transformative automation. Start by looking across your organization for the biggest pain points where new processes might reduce friction for the most stakeholders.
- Balance high-tech and high-touch. Start with realistic, not futuristic, projects, such as simplifying and reducing paperwork and executing rules-based repetitive tasks. It’s the basic, yet often annoying, work that professionals are most eager to have dealt with first. This approach not only earns support for and trust of new technologies—it also frees up precious time to spend directly with patients and members.
- Strengthen relationships. When building an automation framework and launching specific projects, consumer needs should rank at the top with those of employees. Ensuring that automation projects have benefits for consumers can improve relations and loyalty with the organization, especially when the status quo is serving patients and customers inadequately.
“Value-based health reduces the challenges of maintaining the health system, managing innovation and improving patient outcomes.”
- Seniorexecutive, Japanese payer organization
Focus on time to value
Healthcare organizations are intently focused on technologies that increase efficiency and derive greater insights from their underutilized data. AI and deep learning have proven to be some of the most effective measures for reducing friction and discovering insights at the most successful providers and payers.
That’s why the majority of organizations that consider themselves “mature” in their transition to value-based health told IBM that they’re investing heavily in AI and analytical technologies. What’s unique is the differing goals organizations hope to achieve with this technology.
Top stakeholders you are collaborating with in the VHB ecosystem today
Projected top stakeholders you are collaborating with in the VHB ecosystem in 3-5 years
Projected top stakeholders you are collaborating with in the VHB ecosystem in 3-5 years
The provider organizations surveyed by IBM ranked their top AI priority as reducing administrative work for doctors and staff. As discussed in the section on empathetic automation, they found that giving clinicians time to focus on patients greatly improves outcomes and enhances operations. The second top AI issue for providers is using analytics to derive insights from the vast amounts of patient and clinical data so they can offer more discreet care.
Third for providers is developing algorithms and programs to assess outcomes. In other words, providers are keen to use technology not only to create value, but also to ensure they’re delivering on the goals they set out in their value-based commitments.
Payers are most eager to develop AI and deep learning to drive personalized medicine for consumers. By studying data connected to the health and daily lives of their members, payer organizations want to help consumers develop healthier habits that lead to cost savings on all sides. The study of genomics for personalized treatments and care protocols is of particular interest, since it can offer more targeted interventions, as well as help guide behavior change.
Like providers, the second top opportunity for payers, according to the IBM survey, is using advanced analytics to derive insights from data, so that information can be put to use benefiting patients and the entire health ecosystem. The third issue was integrating insights into command-and-control systems to improve operations and administration of work.
To enhance time to value with AI:
- Create a needs assessment. Organizations must start by identifying the places AI is most needed. Will machine learning for new processes take priority, or predictive analytics to develop new insights for leadership? Once goals have been established, metrics must be created to measure success and a detailed budget should be implemented to start building the necessary programs.
- Enhance decision-making with data. With the vast amounts of information available to providers and payers, help from AI to improve diagnoses and prevent improper treatment can prove invaluable. A clear view of how clinical operations affect individual outcomes can help reduce the costs of recidivism and readmission. Piloting projects can be especially effective in these areas.
- Train patient advocates. Ensuring patients are familiar and comfortable with the new processes that arise from AI and automation is not only important—they are also going to provide the most important feedback in the process. Having patient advocates on the front line who can help guide consumers and workers through new offerings, and who can verify and implement improvements, will drastically improve results from new technological practices.
“In this era of technology, health care providers also need innovative solutions for the betterment of services. Value-based health is the model fulfilling all the innovative needs of the medical industry.”
- Chief operating officer, UK provider organization
Overcome innovation barriers
Entrenched inefficiencies in the healthcare industry cost up to USD 2 trillion a year. The inability, and even unwillingness, to share information within and between organizations is a big part of why, according to payers and providers. Such slowdowns create real consequences for workers and patients.
Organizations may have created their information silos out of reasonable concerns, including security, privacy, regulation and internal competition. And yet the lack of data interoperability across organizations was cited by both payers and providers as their biggest hurdle to innovation, followed by insufficient funding for new projects and the need to maintain security.
Data must break free from silos to drive organizational change
Technology has allowed some organization to break down their silos to drive better performance and foster greater innovation. Yet more often than not, the ability to share information across organizations can be limited. Successful providers and payers are focused on ways to ensure their new systems create reliable, interoperable data that still maintains security and compliance. The incentives to drive patient outcomes through an ecosystem-wide data exchange are too great to ignore any longer.
Payer and provider organizations are also aligning this work to the distinct barriers each group has. Payers surveyed said they face a greater burden when it comes to winning patient support and trust for broader data sharing. Providers expressed their greatest concern around instituting technology that could be unreliable or unproven.
One hope for greater interoperability in the medium term comes from the United States Department of Health and Human Services, which is taking steps towards reform. Over the next few years, the federal agency is developing a framework to standardize data, but even then, organizations will have to find ways to work together in this new reality.
To overcome barriers now:
- Foster a culture of innovation. Encourage a culture that empowers everyone—at all levels of the organization—to consider new and novel approaches to problem-solving. Provide clear, detailed and articulate challenges and goals for the organization that staff should always be considering, and then provide distinct rewards for those who innovate.
- Remove barriers, not protections. It can be a delicate balance, but agile approaches to work and new technologies are making it easier to bring down innovation roadblocks without compromising security or compliance. Start by integrating teams and tools more.
- Measure often and always. Every impact—clinical quality, consumer experience, return on investment, and so on—should be quantified, analyzed, improved, reanalyzed and continually improved. Showcase successes and don’t fear failures to push your organization to create and support a continuous learning environment.
“In value-based health, professionals are encouraged to engage with patients, provide appropriate care for the circumstances of each individual, invest in new technology and align their efforts with multiple healthcare providers through a team approach.”
- Chief operating officer, Canadian payer organization
Optimize the value equation
Every healthcare executive IBM interviewed about value-based health agreed on the importance of transitioning to this new model of outcome-based performance and metrics. Where there was less alignment was on which strategies—be it increasing quality, reducing costs or both—to engage.
Healthcare leaders were about equally split on the best approach to value: About 32% say they are focusing on improving quality, 29% on lowering costs, while 39% want to do both simultaneously.
Organizations are trying to balance improving quality without increasing costs
Each organization, whether payer or provider, continues to look for the best ways to balance its needs while better engaging and serving customers. What’s promising, as revealed in the survey, is the near-unanimous belief that a value-based health model should not cost more than existing practices or place a strain on an organization’s financial stability.
Payer and provider organizations need only focus on which investments to make, not whether to make them, to achieve better health, wellness, prevention—and organizational—results. Resistance to change may remain in many quarters. Successful organizations are nonetheless finding technological and operational approaches to bring patients to the center of health and deliver them the value that achieves better results.
How to optimize quality and cost:
- Increase consumer satisfaction. Focus on technologies and systems that can deliver greater benefits to patients and members that either create savings or are cost neutral. AI that saves workers time, personalized health that promotes wellness and analytics to cut down on recidivism are all examples of investments with clear and immediate benefits.
- Deploy machine learning for optimization. Develop algorithms and models that can search for new discoveries in the field, automate the routine, and any other areas that can boost efficiency within the organization and across the ecosystem.
- For Providers. While the focus remains on quality of care, don’t ignore identifying efficiencies that can lower costs.
- For Payers. Lean on analytics to contain costs without forgoing the need to maintain consistent quality.
How will you implement the strategies necessary to transition to value-based health?
- How will you assess risks to your population to help make sure the right level of care is being provided?
- How will you engage your consumers and what technology will you use to support health and wellness?
- How will you capture social determinants of health and link to community services and consumer groups?
- Are you collaborating with other members of the ecosystem, such as other providers, payers, life science companies, policymakers?
- What role will health information technology play and how will you drive more interoperability to innovate most efficiently?
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