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Existing payment systems are by no means the only culprit standing in the way of sustainable, high quality healthcare systems. Yet the incentives that these systems generate are powerful and, if not properly addressed, we can expect little progress to be made.


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Dr. Anna van Poucke


KPMG in the Netherlands


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Doctors walking in hospital corridor

Most importantly, we must now move away from searching for ‘value’ within the boundaries of traditional healthcare organizations. In an age where long-term, chronic disease and coordination of multiple conditions is the number one challenge, the ‘acute hospital’ as the epicenter of the healthcare system simply no longer fits. Indeed, high quality, low-cost healthcare can only be created by redesigning care from the patients’ perspective, focusing on self-management and (secondary) prevention rather than intervening when the damage has already been done.

Although most of these programs do not properly address the limitations of their underlying payment systems, pay for performance programs are showing that it is possible to both reduce costs and improve quality. In the quest for ‘bundled payments’ that cross organizational boundaries and ‘accountable care organizations’, health systems are now looking for the next step forward: paying for outcomes rather than activities; paying for value rather than reimbursing costs.

The Holy Grail of contracting value is not as unreachable as was once thought. By taking a few core principles at heart, the seemingly insurmountable complexity of the issue is reduced considerably. A few core categories of care products or health services can be distinguished which capture most types of patients’ problems, and for each category, it is rather clear what types of outcomes matter most. We can cost these pathways, and using smart combinations of administrative data, patient reported outcome measures, clinical registries and so forth, we can actually measure outcomes quite powerfully.

With these principles, contracting value is no longer just theory. More often than not, large steps can be made towards this goal, whatever current payment system or performance measures are currently in place. Ultimately, the choice is simple: if we do not embark on this road, the only way to prevent costs from exploding further is by reducing access, or blunt cost cutting. In both cases, health outcomes will suffer. The paradigm is already shifting.

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