Value Based Healthcare -A paradigm shift? Hamish Laing Professor of Enhanced Innovation, Engagement and Outcomes School of Management, Swansea University

Health systems are facing huge challenges Five disruptive Forces in Combination Greying patient (and provider) Blessing and Curse of Technology Rise of Chronic Disease Information Revolution New Health & Care Consumer From Advisory Board www.advisory.com

The challenge: Finances Global and will be relentless until the paradigm changes 1)Assumes IMF, country-specific health care growth rates. 2)According to AIHW calculations. 3)New Zealand Ministry of Health projections. Source: Cottarelli, C., “Macro-Fiscal Implications of Health Care reform in Advanced and Emerging Economies,” IMF Fiscal Affairs Department, December 2010; McKinsey & Company, “mHealth: A new vision for healthcare,” available at: http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Initiatives/mHealth/mHealth_a_new_vision_for_healthcare.ashx; Office of Economic Co-operation and development, OECD indicators available at https://data.oecd.org/healthres/health-spending.htm

NHS Wales

www.prudenthealthcare.wales

A Healthier Wales: our Plan for Health and Social Care (2018) The Quadruple Aim (4): “increase the value achieved from funding of health and care through improvement, innovation, use of best practice, and eliminating waste”. Ten Design Principles (7): “ Higher Value – achieving better outcomes and a better experience for people at reduced cost; care and treatment which is designed to achieve ‘what matters’ and which is delivered by the right person at the right time; less variation and harm”.

The “origins” of Value Based Healthcare

Value Based Healthcare (VBHc) Porter M and Lee T HBR “ [Healthcare] Organizations understand that without a change in their model of doing business, they can only hope to be the last iceberg to melt….they have no choice but to improve value and be able to prove it. ” This applies to life-science industries too

Value Based Healthcare: what is it? 𝑉𝑎𝑙𝑢𝑒= 𝑂𝑢𝑡𝑐𝑜𝑚𝑒𝑠 𝑡ℎ𝑎𝑡 𝑚𝑎𝑡𝑡𝑒𝑟 𝑡𝑜 𝑝𝑎𝑡𝑖𝑒𝑛𝑡𝑠 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑦 𝑡ℎ𝑒 𝑜𝑢𝑡𝑐𝑜𝑚𝑒𝑠 𝑉𝑎𝑙𝑢𝑒= 𝑂𝑢𝑡𝑐𝑜𝑚𝑒 𝐶𝑜𝑠𝑡 Porter, M et al. Harvard Business School

Measuring outcomes (that matter) 1 Tracked via the IBD-Control 2 Tracked via the Manitoba IBD Index

NHS Wales Developments Lung Cancer Heart Failure Time Driven Activity Based Costing (TDABC) in progress

Health Boards activity Parkinson’s Disease Dementia Inflammatory Bowel Disease Cataracts Vascular Surgery Breast Surgery Endoscopy COPD Primary care MH Psoriasis Hip Arthroplasty Knee Arthroplasty General Health EQ5D Diabetes Arthritis Adult Autism Alcohol Liaison Tonsillectomy Prostate Cancer National PROM repository National PROM application Paper forms UK Registries

Value Based Healthcare Comparing outcomes

Value Based Procurement Placing Clinical and Patient Reported Outcomes at the heart of the procurement decision making process

VBHc and Health Tech Industries Key success factors Partnership and Trust between industry and NHS Shared accountability for delivering outcomes Measure outcomes at every stage Deliver value through innovation Create new business models and payment systems that align financial incentives to deliver value Stop doing things that don’t deliver value Blog http://bit.ly/2BCGFii

Outcomes and the pharmaceutical industry The European Federation of Pharmaceutical Industries and Associations (EFPIA) represents around 1,900 pharmaceutical companies in Europe and is dedicated to improving health outcomes for patients and making European healthcare systems more sustainable through outcomes-based models based on measuring, comparing and incentivizing health outcomes. Pharma partnering with ICHOM to understand outcomes from their technologies better Pfizer investing in School of Management, Swansea University