November 16, 2017

Nemours Children's CEO: Value-based care isn't enough. Here's what is.

Daily Briefing

    Nemours Children's Health System CEO David Bailey writes in Harvard Business Review that implementing a value-based care (VBC) model won't on its own be sufficient to reduce health spending and improve outcomes—it must be accompanied by efforts to eliminate waste and improve population health.

    From healthy food access to stable housing: The case for collaboration with community partners

    Bailey writes that based on his experience at Nemours, in order for VBC to be effective, it "must be augmented with a structured approach to eliminate waste and be delivered in conjunction with a broad-based effort to address factors that are outside of the traditional boundaries of health care."

    Value-based care with a community focus

    Bailey notes that research suggests that at least 80% of health outcomes are due to factors outside of clinical care. Social factors such as employment, family, and income—as well as behaviors such as diet, exercise, and drug use—all contribute to health outcomes for patients.

    Improving care, Bailey writes, requires addressing such factors beyond the clinic's walls. Toward that end, Nemours launched a pilot program in 2012 with a goal of improving outcomes for asthma patients in an area of Delaware where Nemours had previously established a network of primary care clinics.

    All of the clinics became certified as patient-centered medical homes, and Nemours expanded the typical teams that treated asthma patients to include psychologists, social workers, and case managers. Nemours also hired community health workers to visit families at home, help them recognize asthma triggers, and educate them on how to deal with their child's asthma. The community health workers also connect parents with community resources and advocate for local policy changes to help asthma patients—such as prohibiting buses from idling near schools, which Bailey writes can trigger asthma attacks.

    The results were striking. Nemours saw a 60% reduction in asthma-related ED visits, as well as a 44% reduction in asthma-related hospital admissions, and a reduction in annual medical costs of more than $2,100 per child.

    Outpatient costs increased because of the extra people hired for the program, but Bailey writes that those cost increases were more than offset by lower use of hospital services.

    A methodology for transforming care

    Bailey writes that as part of Nemours' efforts to transform care, the health system has implemented the lean methodology, which he says has helped cut costs while simultaneously improving health outcomes.

    Lean, Bailey writes, incorporates principles such as defining value "by the customer's (patient's) needs, aggressively removing waste from processes, improving processes continually, and engaging employees actually doing the work to identify issues and provide solutions."

    For example, Nemours leveraged lean principles as it sought to virtually eliminate preadmission testing the day before a surgery, seeking instead to conduct needed tests on the day of an operation. That change has led to higher patient satisfaction and fewer cancellations, without hurting surgical start times.

    Bailey concludes, "We believe that value-based care, implemented using lean principles and in conjunction with an ongoing, community-wide effort to address social determinants of health, can reduce health spending and deliver on the promise of better health, for children and for all" (Bailey, Harvard Business Review, 6/16).

    From healthy food access to stable housing: The case for collaboration with community partners

    Population health leaders know that health care delivery is incomplete without addressing the social determinants of health. But effective patient management cannot only include tasking care teams with addressing patients' social needs on top of their complex clinical needs.

    Instead, providers should also partner with community-based organizations already providing quality non-clinical support for a range of needs, from healthy food access to stable housing, to scale patient management beyond traditional care settings.

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