Value-Based Healthcare: state of play in the European Union and its implementation in the Member States

Europuls – the Centre of European Expertise is organizing a panel of discussion at Eurosfat 2018, the sixth edition of the largest forum of European affairs in Romania, focused on the subject of Shifting to Value for Patients. In this post we  would like to offer you a broad presentation of the Value-Based Healthcare concept and useful insights on its state of play and implementation at the EU level and the Member States. A second part of this article will be published soon with conclusions and recommendations following the discussions at Eurosfat 2018.

Conceptualisation: history, definition, measurement, indicators, benefits and examples of good practice

History

New demographic challenges and changing lifestyles are significantly contributing to change in the health of the world population, with citizens benefiting from a longer lifespan that triggers with it a rise of more complex chronic conditions. In countries all over the world, the cost of healthcare is rising faster than their economic development, with the US, France, and Japan spending more than 10% of their GDP on healthcare.

Healthcare spending is therefore expected to climb up exponentially in the years to come in the context of an ageing population and growing public expectations on the accessibility and quality of care. Given the context, value, more than volume, should become a key element in health care systems across the world and the shift to an explicit cost-benefit approach should become mandatory.

Thus, in this new context, a link between healthcare costs and outcomes needs to be established and become mandatory in order deliver high quality care for patients and eventually help healthcare providers manage cost increases.

Definition

Value-Based Healthcare (VBHC) is a healthcare model in which providers, including hospitals and doctors, are paid based on patient health outcomes. From a value-based system’s perspective, providers are recompensed for helping patients improve their health and reduce the consequences and incidence of chronic diseases in an evidence-based way. Value-based care differs from the current fee-for-service approach, in which providers are paid based on the amount of healthcare services they deliver. The key element in value-based healthcare means “explicitly prioritising health outcomes that matter to patients relative to the cost of achieving those outcomes”.

Implementing the VBHC model requires a paradigm shift from a supply-driven model to a more patient-centred system and implies a complete re-thinking of deeply-rooted policies and practices. This also triggers a radical shift in culture for all stakeholders. Taking into account the culture of fee-for-service and supply-driven models, in which payments are made for every consultation or treatment, introducing the VBHC will take time.

Measurement and indicators/ or how do we define and measure value?

In a study made by The Economist Intelligence Unit (EIU) to define the standard of evaluation for value-based healthcare systems and establish the key components of the right environment for VBHC, they identified 4 key elements of VBHC and 17 qualitative indicators of this specific system. In this study they evaluate the presence of the infrastructure, outcome measurement and payment systems that support value-based care. However, they also include priorities such as improving quality and increasing access to basic health services, often specific for lower income and developing countries.

The 4 identified components of VBHC which we believe should also be endorsed in Romania and other EU MS while implementing the VBHC system are the following:

1. An enabling context, policies and institutions for value in healthcare (8 indicators);

Countries need institutional and policy structures to support value-based approaches. This includes ensuring the healthcare system covers the vast majority of the population, and having the buy-in of suitably driven healthcare professionals;

2. Measuring outcomes and costs (5 indicators);

The ability to conduct cost-benefit analyses and to implement and have access to patient outcomes data are a key element to a successful adoption of VBHC. Disease registries represent an important component in this schema in order to create patient outcomes data.

*In the US, for example, a number of applications and websites now allow patients to compare costs for different treatments. In the UK, the NHS Choices website publishes reviews and ratings on health and social care services. Meanwhile, the pressure to develop interoperable electronic health records is rising as they enable healthcare to become more patient-focused and track outcomes and costs to allows countries to gain more comprehensive views of how their health systems are delivering value to individual patients.

3. Integrated and patient-focused care (2 indicators);

Instead of the medical fee-for-services, the focus should be shifted towards overall/general health outcomes, as they can reduce duplication, cut costs and provide better care to patients. Thus, systems that have long paid for each consultation and treatment need to be reconstructed to create financial incentives for coordinated approaches.

4. Outcome-based payment approach (2 indicators).

Incentive structures that pay providers based on outcomes achieved, and mechanisms to identify and stop funding low value interventions.

*For example, bundled payments cover end-to-end procedures, such as one payment for all treatments that takes place in a hip replacement, from consultations and the procedure to rehabilitation, as opposed to paying for each intervention. Countries also need mechanisms for withdrawing resources from treatments, drugs or other interventions that are not proving cost-effective.

Indicators

Benefits of a value-based healthcare system

Firstly, through a well-implemented VBHC system, patients spend less money to achieve better health: patients recover from illnesses or avoid chronic diseases in the first place, face fewer doctor’s visits, medical tests, and procedures, and spend less money on prescription medication.

Providers achieve greater efficiency and patient satisfaction: while the time needed on prevention-based patient services increases, providers will spend less time on chronic disease management.

Payers control costs and reduce risk: “risk is reduced by spreading it across a larger patient population. A healthier population with fewer claims translates into less drain on payers’ premium pools and investments”.

Suppliers align prices with patient outcomes: suppliers benefit from being able to align their products with positive patient outcomes and reduced cost.

Lastly, society becomes healthier while reducing overall healthcare spending: “Less money is spent helping people manage chronic diseases and costly hospitalizations and medical emergencies”.

Examples of VBHC good practice

Value-Based Care Models: Medical Homes and Accountable Care Organisations

The Patient-centered medical home (PCMH) are not real homes but consist of a integrated approach to patient care, coordinated by a patient’s primary doctor who directs the entire care team of the patient. PCMHs rely on sharing of electronic medical records (EMRs) among all providers on the coordinated care team, to put patient information at each each other’s disposal, allowing individual providers to see results of tests performed by other clinicians on the team. This data sharing has the potential to reduce redundant care and associated costs.

Like PCMH, in an Accountable Care Organization (ACO), doctors, hospitals, and other healthcare providers work as a networked team to provide the best possible integrated and coordinated care at the lowest possible cost. According to the study “each member of the team shares both risk and reward, with incentives to improve access to care, quality of care, and patient health outcomes while reducing costs”. This approach differs from fee-for-service healthcare, in which individual providers are encouraged to order more tests and procedures and manage more patients in order to get paid more, regardless of patient outcomes. ACOs encourage coordination and data sharing among team members to help achieve these goals among their entire patient population. Clinical and claims data are also shared with payers to demonstrate improvements in outcomes such as adverse events r patient engagement.

Value-based Healthcare at European level: state of play and implementation

Just like in Japan, the healthcare systems of EU member states are under huge pressure to meet the growing demand for care and simultaneously support innovation in the sector. Europe’s current approach towards health care systems is still focused on cost-containment in order save its affected public health system and the fragmentation of EU healthcare is risking its long-term sustainability. In this context, a people-centric and integrated healthcare approach would be more auspicious and welcomed on the European continent – one that emphasizes on return on investment, specifically on the improvement in patient-relevant outcomes and one that thinks differently, in a more collaborative way.

However, there are signs of progress. The European Cooperation on Health Technology Assessment (HTA) – a Member States initiative that measures the added value of a new health technology compared to existing ones (medicinal products, medical equipment, diagnostic and treatment methods, rehabilitation, and prevention methods), lies among the promising initiatives to push for a shift in health system approaches. From 21/10/2016 to 20/01/2017 HTA was under review by the EC through public consultation on strengthening cooperation at EU level. The traditional of HTA is to inform national decision-making in health care, however recently HTAs have been given a different role, one to rethink the way health systems function and provide access to innovations valuable for the patient.

In 2016, the EC started work on strengthening EU cooperation through a Health Technology Assessment in response to calls from EU MS countries, the European Parliament, and interested parties, to ensure its sustainability beyond 2020. In its 2017 Work Programme, the European Commission announced that this would extend to improving the functioning of the single market for health technologies.

A legislative proposal was adopted by the EC on 31 January 2018 that amended directive 2011/24/EU/ and has been sent to the European Parliament and the Council with the aim of adoption by 2019. It is expected that once it is adopted and enters into force, it will become applicable three years later. Following the date of application, a further three-year period is envisaged to allow for a phase-in approach for Member States to adapt to the new system.

This proposal emphasizes on greater transparency that would give patients access to information on the added clinical value of a new technology. For national authorities, this would trigger the possibility to be able to formulate policies for their health systems based on more robust evidence. Furthermore, manufacturers will no longer have to adapt to different national procedures.

Member States will be able to use common HTA tools, methodologies and procedures across the EU, working together in four main areas: 1) on joint clinical assessments focusing on the most innovative health technologies with the most potential impact for patients; 2) on joint scientific consultations whereby developers can seek advice from HTA authorities; 3) on identification of emerging health technologies to identify promising technologies early; and 4) on continuing voluntary cooperation in other areas.

The proposal was presented after 20 years of voluntary cooperation in this area: “following the adoption of the Cross-border Healthcare Directive (2011/24/EU), a voluntary EU-wide network on HTA composed of national HTA bodies and agencies was established in 2013 to provide strategic guidance to the scientific and technical cooperation at EU level. This work, complemented by three consecutive Joint Actions[1] on HTA, has enabled the Commission and Member States to build a solid knowledge base on methodologies and information exchange with regards to the assessment of health technology”.

The ongoing EU cooperation on HTA is implemented through the EU co-funded Joint Action EUnetHTA, which is unlikely to be funded and continued after 2020. To facilitate the way forward, the European Commission has launched the above mentioned initiative that envisages five possible scenarios:

1. The status quo; (Non-legislative / voluntary)
2. Long-term voluntary cooperation; (Non-legislative / voluntary)
3. Cooperation on collection, sharing and use of common tools and data; (Legislative / voluntary + mandatory)
4. Cooperation on production of joint REA reports; (Legislative / voluntary + mandatory)
5. Cooperation on production of joint full HTA reports. (Legislative / voluntary + mandatory)

If the legislative proposal would come into force, joint clinical assessments, economies of scale, greater business predictability would be achieved, triggering with it other desired types of VBHC approaches consisting of increased quality and improved transparency for patients.

However, some questions are still pending among the actors involved whether HTAs would fit in the effort to make public health systems future-proof and whether the different interpretations of value would prevent Europe from effectively deploying value-based health care.

For the moment, in the context of the overall health deficit in the health sector, which severely affects the capacity of most Member States, especially those of Central and Eastern European countries, the issues can be addressed more effectively by increasing voluntary cooperation to improve the availability of skills and resources throughout the European Union and to bring better outcomes for patients and health professionals, towards a more value-based healthcare system.

A short introduction to the Romanian healthcare system

Moving towards a concrete example of VBHC implementation in a MS, we will focus on the Romanian case. To shed light on the VBHC system in Romania, we will give a short introduction to the Romanian healthcare system.

According to the 2017 health profile of Romania, developed by the OECD and the European Observatory on Health Systems and Policies, in cooperation with the European Commission and as part of a larger study consisting of a in-depth analysis of health systems in Member States, Romania recorded the following findings:

• Romania registers the lowest healthcare expenditure among MSs, with the lowest per capita spending as a share for the GDP in the EU;
• The healthcare system in Romania registers low funding and inefficient use of public resources;
• Access to services by the population in rural and urban areas is disproportionate, and for vulnerable groups, the inequality is even bigger. Recent proposals include the creation of community care centers to improve access for these groups, such as the Roma population;
• Personal spending, out of pocket, represents a fifth part of total patient spending and includes direct and unofficial payments. The latter are widespread but difficult to estimate because of their informal character, thus preventing calculations to be used in order to assess the real cost of private health spending.
• The shift from hospitalization nursing services and hospital care to ambulatory and primary care is significantly delayed, which limits the efficiency of the health care system. Primary care services are still insufficient and under-utilized and inadequate use of hospitalization nursing services and specialized ambulatory care services, including emergency care in hospitals, continues to exist.
• Lack of information makes it harder to improve the system: there is not enough data to assess the quality of assistance, and the assessment of medical technology is still at an early stage.
• There are no clear criteria for allocating resources and there is insufficient evidence available to improve the cost-effectiveness ratio. There is also no system in place to ensure a fair distribution of health institutions and human resources across the country to overcome inequalities between rural and urban areas.

However, there seems to be a number of initiatives to improve the health system in Romania: the National Health Strategy which sets strategic objectives in the field of public health and healthcare services. It aims to reorganize medical services and direct investments to disadvantaged areas and promotes the voluntary exchanges programs in Member States to discuss best practices.

Overall, Romania presents a health profile of a developing country where the main priorities remain improving quality and increasing access to basic health services.

Value-based Healthcare in Romania/how to implement VBHC in Romania

The concept of VBHC in Romania is relatively new both in terms of stage of implementation and studies conducted so far. Based on the Economist Intelligence Unit (EIU) Healthcare briefing from 2017 on VBHC in Romania, it was noted that the health system shows signs of willingness to change, although numerous elements are still missing entirely. To cite only a few, the processes to support integrated care or systems to measure costs and outcomes are missing from the schema.

The findings underline that “Romania has an active Health Technology Assessment (HTA) programme that however needs to develop new methodologies which will allow it to focus more on national needs and priorities, notably economic conditions”. At the moment it relies on foreign HTA mechanisms and findings made in countries such as France, Germany or the UK. Thus, the system would be more productive if it were to estimate the impact of technologies based on local data – rather than on decisions taken elsewhere. Additionally, the system relies on very little academic collaboration compared to its peers and is under-resourced. On a positive note, training in health economics and HTA concepts is provided to medical students.

On the negative side, the lack of national level disease registries and the system limitation of its ability to measure outcomes and costs as data are fragmented, becomes an even higher burden on the system. While there are efforts to implement integrated care, there is only a small number of therapy areas, such as diabetes.

The Romanian Health Observatory released a study in 2018 regarding a small branch of VBHC approach, specifically patients’ satisfaction regarding public hospitals in Romania in 2017.

The Romanian state judges and rewards financially the performance of public hospitals, especially in terms of quantity (number and complexity of treated cases), but not qualitatively (patient satisfaction or quality of life after hospital treatment). Patient satisfaction with the quality of healthcare received is one of the most important indicators that show the true performance of a hospital. By the end of 2016, this indicator was deeply flawed in Romania due to its data collection and assessment methods. With the introduction of the electronic questionnaire, the results were arguably closer to reality. This report analyzed the 122,423 satisfaction questionnaires completed by Romanian patients through SMS and web form, between December 2016 and January 2018, via the feedback mechanism from the Ministry of Health.

The number of hospitals which entered patient contact data in the National Health Insurance House’s electronic platform for patients to receive the satisfaction questionnaire via SMS was worryingly low. More than 20% of healthcare facilities have not introduced a single patient into the system, and 82% has introduced contact data for less than 5% of their patients.

Therefore, an adoption of value-based healthcare in Romania where the main healthcare priorities remain improving quality and increasing access to basic health services, would involve changes for all stakeholders in the wider healthcare system. While most patients and payers will embrace the move towards value, “providers and suppliers may find some aspects of its implementation challenging – such as changes in pricing pathways, market access constraints and the investment needed to build the necessary data infrastructure”. Nevertheless, the value from the point of view of the patient needs to be taken into account. It is important that payers, providers and professionals realize that increased value needs to be put into patients’ healthcare.

What should Romania do to speed up the alignment of its health system with this new approach?
For starters, the authorities need to take into account and endorse the 4 key component of VBHC identified by EIU listed and explained above.

The transition from a volume-based system to one that recognises value requires the Romanian healthcare system to put these elements in place, while continuing to improve quality and access to basic health services and cross-border voluntary exchanges.

Conclusion

In the context of the overall health deficit in the EU health sector, which severely affects the capacity of most Member States, especially those of Central and Eastern European countries, and with Europe’s current approach toward health care systems focused on cost-containment, value-based care has the promise to significantly reduce overall costs spent on healthcare and improve the health of patients in an evidence-based way.Transforming our current models into value-based healthcare is far from easy, and we are still in the early stages of putting together the enabling context, policies and institutions. Nonetheless, the case for countries to align their health systems with value-based approaches has never been stronger and we must build on the current momentum.