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How to implement VBHC in LatAm
Future Trends LatAm 2016
13 October 2016, Panama

LatAm Future trends-BCG-12Oct16 - 30Sep draft.pptx
Copyright©2016byTheBostonConsultingGroup,Inc.Allrightsreserved.
Voting question
What do you believe is your biggest barrier to implement Value-Based Health Care?
1 Lack of agreed outcome measures and transparency
2 Lack of cross-stakeholder trust and agreement to move to VBHC
3 Policies that prohibit move to VBHC and / or lack of policies to promote move to VBHC
4 Poor data and IT infrastructure to support VBHC
5 Lack of leadership to drive move to VBHC

Difficulty making decisions about best health care
Where's the patient?
Pharma/Medtech
Maximize
product sales
Pharma/Medtech
Maximize
product sales
Payers
Minimize medical
loss ratio
Payers
Minimize medical
loss ratio
Providers
Maximize
procedures
Providers
Maximize
procedures
Academia
Maximize
publications
Academia
Maximize
publications
Regulator
Protect public
health
Regulator
Protect public
health
Confounding factors
Large variation in outcomes
generates "noise", making evaluation
of all treatments, especially
innovations, difficult
No commonly agreed definition of
health "quality" (nor of outcomes)
Limited transparent, outcomes
data available to evaluate treatment
options
Misaligned incentives and market
inefficiencies skew treatment
choices, worsening outcomes
Highly regulated market with misaligned incentives
+

Perverse incentives in healthcare
Key findings of research
Surgical patients with 1 or more complication
generated greater contribution margin than patients
without a complication
• Privately insured patients with 1+ complication
generated 330% greater contribution margin ($39K
more per patient)
• Medicare patients with 1+ complication generated
190% greater contribution margin ($2K more per
patient)
Journal of the American Medical Association is a major peer-reviewed academic journal that is widely ranked within
Top 3 medical journals, with The Lancet and New England Journal of Medicine
Typical US hospitals lose revenue and contribution margin
when they improve surgical quality!

Releasing the powers of staff engagement and innovation
Discipline
Motivation
Demand compliance with
clinical practice guidelines
Manage health care on
production volume and
process efficiency
Stimulate competition on
outcomes, enable innovation
Facilitate sharing of good
clinical practice and peer
recognition

VBHC is changing entire HC ecosystem now
Payers
Providers
HC system
& policy
Patient
• Experimentation with value-based
reimbursement, value-based
payment schemes
• Outcome based competition,
value-based purchasing
• Transparency of outcomes data
• More focus on patient-reported
outcome data
• Better informed from transparency
Maximize value for patients and HC payers—and
supplier capture fair share
Outcome
Cost
= Value
Holistic approach
PatientHealth
information
Drugs
Care
management
Care delivery
MedTech
Change of overall perspective ... ... and for individual stakeholders
Source: BCG

Why this is important to you - competing on outcomes
Value
Continuous improvement
& engaged staff
Engage staff in improvement efforts
Economic stabilityEliminate costs that do not improve outcomes
Centers of excellenceDeliver superior outcomes that attract larger patient volumes
Innovation and
translational research
Bedside pull for scientific breakthroughs and innovations
Feedback
and
learning
Analyze
variation
Identify
current
best
practicesChange
behavior
Transparent outcomes data
Value
Outcomes
=
Cost
Source: BCG

Outcome measurement and transparency change the game
Silo optimization
Control
Component
management
Holistic
leadership
Engagement
Cooperation
Source: BCG

Value in Healthcare - core framework
ENABLERS
Focus on defined
population-segments
Population
interventions along
full cycle of care
Continuous
improvement
Measuring value:
Outcomes and costs
Incentives and
payments aligned
to value
VBHC
building
blocks
Policy/regulation
Organizational context
driving behaviors
Data/IT systems
Note: Builds on accountable care framework presented by McClellan, et al in "Accountable Care Around the World: A Framework to Guide Reform Strategies," Health Affairs, 2014
Source: McClellan, et al; BCG

Table discussions
Identify the top five barriers and brainstorm potential paths forward for implementing Value-Based
Health Care in your market.
1
2
3
4
5
Barriers Path forward

Voting question
What is your first priority locally to implement Value-Based Health Care?
1 Policy changes to remove existing barriers and/or to promote outcome measurement and transparency
2 Investment in Data and IT systems and infrastructure
3 Creating a pilot across stakeholders of transparent outcome measurement
4 Working with physician and patient associations to define and agree outcome measures
5 Drive buy-in within own organization for move to value-based health care

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