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I have been an advocate of competition in health care because I believe it promises to improve health care value (outcomes delivered per dollar spent). In fact, Warren Sandberg and I described one pathway to advancing the concept in a blog that appeared in Health Affairs in September 2013. In it, we cited events (e.g. publication of ratings of heart bypass surgery) that might have stimulated competition on outcomes but didn’t. We went on to propose a solution, which we call Facilitated Quality Competition, and a trial of our proposal. In the special case of heart bypass surgery, we proposed that state regulators steer heart bypass patients to services that had been awarded two or three stars for that procedure from the Society of Thoracic Surgeons.
Early this year, I decided to get the ball rolling: I contacted the regulator in one state to propose the trial. Surprise! Surprise! I was told that all hospitals that perform heart bypass surgery in that state had received either two or three stars. Now, I’m waiting to hear whether this gratifying response is the result of policy or accident. And there the matter stands.
While awaiting the response, I discovered that the Boston Consulting Group (BCG) had published a white paper advocating competition based on outcomes. It cites instances of authorities’ steering patients to higher performing providers and an example of an institution that has prospered as a result of advertising its credible outcomes data. However, the authors admit that “[a]s of yet, no national health system is explicitly designed for competing on outcomes.”
Nevertheless, some progress is worth celebrating. So, in the following, I summarize two examples presented in the BCG white paper in which patients are steered to high-quality services and one example of an institution that posts its outcomes, which have been reported in the peer-reviewed literature.
In Sweden, the Stockholm county council is steering patients with ST-elevated acute myocardial infarctions from a well-known and highly regarded hospital to a different institution because data had shown that patients at the latter had a higher survival rate. Several years ago the council instituted a system of bundled payments, with a bonus for superior performance, for hip and knee replacement surgery. The policy resulted in a 20% reduction in complications and revisions compared to a control group, and the cost per patient of these surgeries has declined “by an equivalent amount.” Now, other counties in Sweden are planning to adopt the practice pioneered by the Stockholm county council. In effect, some of Sweden’s payers are experimenting with outcomes-based competition, and learning that they and the patients benefit.
In Germany, the Martini-Klinik, a private hospital specializing in the treatment of prostate cancer, has used detailed data to achieve superior results on two important outcome measures: severe erectile dysfunction and urinary incontinence. As a consequence, its volume of prostate cancer surgeries has grown by about 16% per year for the past eight years, and it now performs the highest number prostate cancer surgeries in the world. The Martini-Klinik posts its outcomes data on its web site. However, this is not just any data: It has passed the test of being published in The Journal of Urology.
In the U.S., Walmart is steering employees requiring transplants or heart or spine surgery to six leading institutions rather than to the patients’ local hospitals. According to the New York Times article that reported the adoption of this policy, Walmart believes that its employees will receive better care at these centers on account of their patient volumes, and it will benefit from lower costs. The BCG paper and the Times article do not describe the data accessed by Walmart in selecting the six centers.
The three examples suggest that health care value is improved when credible data are publicly available and are used to steer or attract patients to the centers delivering the best outcomes.
What’s still needed in the U.S. is (1) a policy of encouraging outcomes-based competition and (2) publicly available outcomes metrics for common procedures, developed, published and and supported by medical societies. Let’s hope that influential and courageous health care leaders will take a stand on this very pragmatic pathway to improve health care quality.