Healthcare's Big Challenge: How To Measure Value

Healthcare payers want technology developers to create systems that measure value. This time, tech is lagging social changes.

Alison Diana, Contributing Writer

June 5, 2014

5 Min Read
David Lansky of Pacific Group on Health also works on the federal Health IT Policy Committee.

Healthcare Dives Into Big Data

Healthcare Dives Into Big Data

Healthcare Dives Into Big Data (Click image for larger view and slideshow.)

As the purchaser representative on the federal Health IT Policy Committee, David Lansky, PhD., is the voice of employers, insurers, and other organizations responsible for healthcare compensation.

It's a role he's handled for five years, one that complements his full-time position as CEO and president of Pacific Business Group on Health, a nonprofit business coalition that helps its 60 purchaser members provide coverage to more than 3 million employees by improving the quality and affordability of healthcare.

In both positions, Lansky focuses on improving the nation's healthcare delivery system by curtailing unnecessary spending and enhancing visibility by measuring outcomes and value. As healthcare providers move to care that is based on value rather than fees, it's imperative for payers to have tools to measure value, Lansky told InformationWeek. Without them, providers will default back to fee-based care and patients will again fall into a pattern of potentially unneeded tests, medications, and treatments.

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"To assess value, we need to measure value in the way people who get care are treated," he said. "The goal is to measure what happens to the whole person across time and across space."

Employers want a more complete picture of workers' health beyond the snapshot they currently receive from healthcare providers, said Lansky. Rather than capturing data only when employees are sick and being treated, employees wish for a "longitudinal" measure that encompasses home, work, and wellness programs, he noted.

"For my members, value is getting the best possible outcomes for the necessary resources to be used. We understand healthcare can be expensive, so we want the most efficient use of resources to achieve the goal," said Lansky. "We're doing a little better on measuring cost. We're not doing much better on measuring value."

With knee replacements, for example, measuring value would entail determining whether patients walk better six months after their operation, he said. Asthma treatments could be dubbed successful if a patient could sleep through the night, said Lansky. Depression medications work if patients return to their careers or once again participate in family life.

Today, however, payment systems are not set up to capture that information, Lansky said. Rather, they track which reatments doctors perform, the medications physicians prescribe, and the therapies clinicians recommend. Switching to a value-based system is a chicken-and-egg problem, and one of technology working to catch up with intent. "[If] the payment system generally is based upon measures of outcome, then everybody will work hard to make that possible. To the extent the payment system is primarily based on volume, technology and other partners in the system won't work hard on measuring outcome," Lansky said.

"There's now a pretty strong commitment to measure value and pay for value," he continued. "[But] the data infrastructure doesn't move quickly enough to permit that kind of value. The technology has to catch up to the changes in society. It's kind of ironic. In this case we have society -- everyone across the political spectrum -- and yet the data isn't there to support it. Technology is lagging the social commitment to health reform."

That's not to say measuring value is impossible. Through Pacific Business Group's Employers Centers of Excellence Network, for example, organizations such as Wal-Mart, Lowe's, and McKesson partner with Johns Hopkins Bayview Medical Center, Kaiser Permanente Orange County Irvine Medical Center, Mercy Hospital, and Virginia Mason Medical Center for knee and hip replacement surgeries. In return, these providers deliver the value-based metrics payers want.

"They are requiring data to be submitted from those hospitals, including whether people are able to function six months after surgery," said Lansky. "After spending $20 billion on health IT in the past five years, we still can't expect, as a country, all hospitals to report these health measures."

Despite some frustration that technology isn't always tightly aligned, that many systems are closed, and data is often siloed within organizations, healthcare's adoption of technology has dramatically improved over the past five years, he said. The Centers for Medicare & Medicaid Services (CMS) should get credit for doing a lot with only the tools Congress provided them, said Lansky. Yet incentives and mandates can only go so far, he added.

"Some of the cornerstone tasks have been done very well [but] we haven't gotten people onto the digital platforms," said Lansky. "We have a healthcare system implementing technologies that is probably not very much different than they would have done 10, 15 years ago; in other words, automating paper processes. There's a gap between the way we're implementing these technologies and the [goals]. That gap is becoming greater, not smaller. To support the goals for society, to improve health and improve the healthcare system, we've got to support the innovative use of information technology and unfortunately, we're not doing that."

Pressure from patients -- who now account for a larger percentage of payment for their own care -- and employees, could prompt vendors to more quickly design software that captures, measures, and analyzes value. That will be good news for Lansky and the organizations he represents, and could reduce the overall cost of the nation's healthcare.

Download Healthcare IT In The Obamacare Era, the InformationWeek Healthcare digital issue on changes driven by regulation. Modern technology created the opportunity to restructure the healthcare industry around accountable care organizations, but ACOs also put new demands on IT.

About the Author(s)

Alison Diana

Contributing Writer

Alison Diana is an experienced technology, business and broadband editor and reporter. She has covered topics from artificial intelligence and smart homes to satellites and fiber optic cable, diversity and bullying in the workplace to measuring ROI and customer experience. An avid reader, swimmer and Yankees fan, Alison lives on Florida's Space Coast with her husband, daughter and two spoiled cats. Follow her on Twitter @Alisoncdiana or connect on LinkedIn.

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