2019 LeapfrogToValue PDF
2019 LeapfrogToValue PDF
2019 LeapfrogToValue PDF
to Value
How nations can adopt value-based care on
the path to universal health coverage
Steering Committee
Chintan Maru, Founder and Executive Director, Leapfrog to Value
Amy Lin, Technical Lead, Center for Innovation and Impact, United States Agency for International Development
Jean Kagubare, Deputy Director, Integrated Delivery, Bill & Melinda Gates Foundation
Amy Pollack, Director, Maternal, Neonatal, and Child Health, Bill & Melinda Gates Foundation
Andrew Stern, Founder and CEO, Global Development Incubator
Naveen Rao, Managing Director, Health, Rockefeller Foundation
Jeff Walker, Co-Chair, Community Health Acceleration Partnership, Hosted by WHO Ambassador for Global
Strategy
Leapfrog
to Value
Acknowledgments
The following individuals made significant contributions to the development of this report
David Milestone, Former Director, CII, USAID
Monisha Ashok, Market Access Advisor, CII, USAID
Danielle Dobos, Former Consultant, Dalberg
Foreword
Underperformance of health systems for people in low- and middle-income countries is a source
of lost lives (nearly 9 million per year), lost trust, and lost investment. The Lancet Commission
on High Quality Health Systems, 30 global experts and practitioners from 18 countries support-
ed by eight national Commissions and citizen representatives, concluded that the transformation
from the current low equilibrium to high quality health systems cannot be accomplished through
incremental approaches. Instead structural reforms in how health care is governed, where and by
whom services are provided, how providers are trained and supported, and, critically, how people’s
experiences, outcomes, and feedback are harnessed are key.
The Leapfrog to Value report provides useful ways forward for several of these structural changes.
It notes that neither the volume- and profit-based approach pursued by private providers nor the
access-first strategy embraced by the public sector responds to the health needs of patients nor
maximizes population health. This is a huge waste of public and family funds. The alternative
proposed is value-based care, defined here as using outcome and cost data to direct providers to
improve delivery through performance-linked payment.
The report makes several important suggestions. Track outcomes that matter to people, ideally over
time since cure is rarely accomplished in one visit, then organize care around the patient’s preferred
pathway and his or her needs. Make the data easy to understand and compare. Incorporate infor-
mation about people’s social environment in care plans. Revise service delivery so that all care is
right-placed: provided in settings that can assure sufficient quality to actually improve health. Help
providers do the right thing by sharing outcome and cost data and by arranging payment to incentiv-
ize actions in the best interest of the patient.
Value-based care requires local specificity and, once validated in the local setting, implementation at
scale to truly transform systems. Some payment innovations, for example, results-based financing,
have had modest impact on outcomes in high and low-income countries and consumed large shares
of scarce policy attention to implement. Technology, while clearly an underused asset in 21st centu-
ry health systems, cannot compensate for fundamental gaps in provider training and system compe-
tence—just as flight safety checklists cannot compensate for poorly trained pilots. The evidence for
many innovative approaches remains weak or is too far removed from the ground realities of any one
country. The report calls for local experimentation to fill this evidence gap.
While many questions remain, there is no question that departing from the status quo is needed
to improve health and reduce waste of health care resources. And today, when governments seek
to insure their populations, to meet ever expanding health needs, and to do it all without breaking
the bank, the moment is ripe for a focus on value-based care. The report makes a strong case that
compels innovation and action.
Margaret E. Kruk
Chair, Lancet Global Health Commission on High Quality Health Systems in the SDG Era
Associate Professor of Global Health, Harvard T.H. Chan School of Public Health
3
Executive Summary
For decades, low- and middle-income countries (LMICs) viewed increasing
access to healthcare as a top priority, and for good reason. Increasing access to
evidence-based interventions like skilled birth attendance and immunizations
saved millions of lives. Success was largely based on volume—delivering more
services would lead to better outcomes. Given that priority, health systems have
been designed to maximize the quantity of services delivered, to track and maxi-
mize coverage rates, and to finance inputs and outputs.
4
MEASURE value in terms of outcomes and costs MEASURE
1 Track outcomes that matter to patients: clinical
outcomes, quality of life, and patient experience
2 Aggregate data longitudinally, to understand how
costs and outcomes accrue throughout the patient
journey
3 Make data insightful and actionable by
standardizing, benchmarking, and risk-adjusting
4 Integrate medical and non-biomedical data
(social, environmental, behavioral) to
understand the root causes of disease
DELIVER PAY
DELIVER value by using data to learn
and improve performance
1 Design care pathways around the patient journey
2 Establish iterative loops of learning and improvement that
involve frontline providers and senior decision-makers
3 Emphasize preventive care in community and primary care settings when
possible, providing access to hospital-based treatment when necessary
5
Value-based care innovation is emerging in LMICs, too. Innovators featured in
this report push the boundaries of what seems possible in settings with limited
infrastructure and capabilities. In Kenya, for example, PharmAccess’s MomCare
offers a package of care for pregnant women in Nairobi. They track not only clin-
ical outcomes like pregnancy complications, but also patient-reported outcomes
such as birth experience and success with breastfeeding. These data are used to
improve and incentivize provider behaviors. PharmAccess’s mobile health plat-
form, MTIBA, facilitates data capture and payments to providers. Examples like
MomCare shine a light on the advantages of experimenting in systems unbur-
dened by mature, legacy systems—the leapfrog potential of LMICs. With further
experimentation and a paradigm shift toward value-based care, innovators such as
these can achieve their full potential, in terms of effectiveness and scale.
Value-based care models can help address 9 of the 16 million avertable deaths per
year in LMICs3. They can achieve this by bolstering quality initiatives, by making
care more patient-centered and thereby improving demand, and by systematically
steering more resources to address social, environmental, and behavioral deter-
minants of health. Value-based care models can also optimize costs by rewarding
providers for being stewards of resources. This increases utilization of appropriate
preventive care and reduces the provision of unnecessary drugs and procedures.
By doing so, value-based care models can help reduce the USD 250 billion per year
of waste that exists in the health systems of LMICs.4
There are immediate opportunities for governments and donors to hasten a value-
based care transformation.
Apply a value lens. Governments and donors should apply a value lens to
near-term decisions that have long-term implications. Three categories are
most important: 1) Digital health strategies should plan for data systems that
can longitudinally track outcomes and costs at the patient level and can relay
that data to payers and providers. 2) Investment in healthcare infrastructure
6
and capabilities should balance resources across care settings, recognizing
that health systems with strong primary and preventive services achieve higher
value than those that lean too heavily on hospital care. 3) Health sector lead-
ers should communicate a long-term vision for value. This will help providers
prepare for new payment models, build public support for policy changes, and
encourage innovators to experiment with value-based care.
7
Table of Contents
CHALLENGE.............................................................................................................. 10
OPPORTUNITY......................................................................................................... 18
Measure.............................................................................................................. 22
Deliver................................................................................................................ 27
Pay....................................................................................................................... 31
Tailwinds of change................................................................................................. 39
STRATEGY.................................................................................................................. 43
Leapfrog to value..................................................................................................... 51
8
Acronyms
ACA Affordable Care Act
ACO Accountable care organization
AI Artificial intelligence
ANC Antenatal care
B2B Business to business
BMI Body mass index
CDA Clinicas del Azucar
CHW Community health worker
CMMI Center for Medicare and Medicaid Innovation
DHIS District Health Information Software
DRG Diagnosis-related group
EHR Electronic health record
ICHOM International Consortium for Health Outcomes Measurement
IHME Institute for Health Metrics and Evaluation
LMIC Low- and middle-income country
MDG Millennium Development Goal
MSSP Medicare Shared Savings Program
NCD Non-communicable disease
NGO Non-governmental organization
NICU Neonatal intensive care unit
PM-JAY Pradhan Mantri Jan Arogya Yojana
PROM Patient-reported outcome measure
RBF Results-based financing
RGV Rio Grande Valley
ROI Return on investment
SDG Sustainable Development Goal
TB Tuberculosis
UHC Universal Health Coverage
USAID United States Agency for International Development
USD United States Dollar
WHO World Health Organization
9
CHALLENGE
Low- and middle-income countries are
replicating structural flaws we see in
high-income countries that increase
health spending, without delivering
proportional results
Consequences of volume-based health systems
Health systems in low- and middle-income countries (LMICs) from India to
Nigeria suffer from a crisis of distrust. Patients question the quality of govern-
ment-run clinics. Newspapers expose private hospitals for peddling unnecessary
procedures. These are symptoms of volume-based health systems that tend to
focus on the quantity of care delivered and that have less capacity to track quality
or outcomes.
Private sector profits from volume can be distorted. Hospital administrators, for exam-
A volume orientation typifies the private sector which ple, seek to maximize the number of patients who
consumes half of the health spending in LMICs.5 present to the hospital, the percent of those patients
Households pay directly out-of-pocket for discrete they admit to an inpatient bed, their average length of
clinical consultations, diagnostics, and medicines. stay as an inpatient, and the profitability per bed per
Nearly all private providers—whether the informal night. Some hospitals set revenue targets for physi-
drug-seller in a Lagos slum or a surgeon in a hospital cians, often putting the clinician’s interests at odds
in Delhi—profit when they can sell more healthcare with the patient’s. By measuring and managing against
products and services. volume-oriented performance metrics like these,
private providers drive up costs without commensu-
A volume-oriented, fee-for-service business model can rate impact on health outcomes.
be an advantage in supply-constrained health systems,
increasing productivity and access. Indeed, many Public sector has pursued an access-first
health system planners consider private providers an strategy
important ally in the aspiration to achieve universal A volume-orientation also characterizes public sector
health coverage. However, that same profit motive delivery, even in the absence of a profit motive. For
also has adverse implications by driving unnecessary, most LMICs, public healthcare has been rooted in
sometimes harmful care. In India, for example, the the control of infectious diseases and the provision of
c-section rate in the private sector is three times higher maternal and neonatal healthcare. In many countries,
than that in public facilities.6 While consumers are not the government’s role focused on extending cover-
oblivious to the potential conflict of interest in the age of immunizations and other critical public health
private sector business model, they are often unable interventions. While the mandate of these systems
to compare prices or to know whether a prescribed has grown with rising incomes, donor investments,
treatment is appropriate. and shifting epidemiological priorities, the historical
health system paradigm prevails.
Private providers are not motivated by profit alone.
Many are revered community members, provide char- That access-first strategy is reflected in the metrics
ity care to those who can’t pay, and operate in locales that public healthcare systems track. They have
where the public sector has not reached. Further, emphasized coverage rates: the number of children
patient often prefer private clinics providers over immunized; the number of deliveries conducted by
government-run ones. In many instances, even the a skilled birth attendant; the number of households
poor opt to pay for private care when public facilities with an insecticide treated bed-net. There’s a strong
are free.7 Yet it is evident in how the private sector basis to this strategy. Maximizing the reach of these
measures performance that even the best intentions evidence-based interventions is a practical approach
FIGURE 1
Low-value in critical care pathways
Primary care
Patients receive poor attention, communication, and respect from the primary
care system
• Five minute visits are commonplace
• Half of all diagnoses are never communicated to patients
• Large gaps in measuring quality of primary care. Even when measured,
large variation in quality across facilities
Maternity care
Maternity care remains a leading cause of early, preventable death for women
in LMICs
• Over half of all amenable maternal deaths were due to poor quality health services
• Only two in five women who delivered at a facility were examined within 1 hour
after birth, a critical time period
• In Africa, health care providers performed only ~60% of the eight recommended
antenatal care actions and only ~50% of nine sick-child care actions in
observed visits
”
disease pathways such as tuberculosis (TB), where to lack of access.
fewer than half of all cases are correctly diagnosed and
managed.10 Compounding this reality are demograph-
ic and epidemiologic trends. As populations age and
are burdened with more non-communicable diseases,
such as diabetes and hypertension, they require more Risk of path dependency
complex services and care that are more susceptible
Despite increasing global recognition of these chal-
to poor quality. The Lancet Quality Commission deliv-
lenges, the health systems of LMICs seem to be accel-
ered a decisive reckoning last year: quality has eclipsed
erating on a volume-based trajectory (figure 2). These
access as a driver of survival. Their analysis showed
danger signs are evident even in countries that have
that of the mortality amenable to healthcare, 60% is
made impressive strides toward the goal of universal
due to poor quality of care, compared to 40% due to
health coverage.
lack of access.11
Concern
ACCESS
QUALITY
COSTS
Overarching challenge
Limited availability and Growing investments High-growth private Progress on achieving
access to basic levels in public-sector health sector has helped universal health coverage
of providers, services, care delivery has extend access, but has (UHC) is hindered by
and infrastructure expanded access, but resulted in low trust unsustainably high
poor quality of care and inconsistent health costs
remains a challenge quality of care
Country example
Malawi, where infectious Kenya, where the public India, where 60-70% Indonesia, which has
diseases like HIV, TB, and UHC plan is aiming to access private sector implemented robust UHC
malaria are dominant drivers reach 100% coverage by providers: coverage since 2014:
of mortality and morbidity 2022:
• Private providers in India • In 2015, the claim ratio of
• There is 1 surgeon per 100K, • 2 in 10 clinicians were not perform nearly 4x the average medical cost to
1 physician per 50K, and 1 able to offer correct c-sections recommended average premium collection
nurse per 3.5K people, well diagnosis of relatively by WHO guidelines or was 115%, and is projected to
below WHO standards common conditions such 900,000 unplanned or reach ~125% by 2019 in the
• 40% of community health as acute diarrhea, medically unjustified absence of contribution
workers report limited pneumonia and diabetes caesarean deliveries per adjustment and cost
supply of essential drugs • Only ~20% of the mothers year, driven mainly by containment
• Districts report 2-5 months received minimally financial incentives (a • Without change, the budget
of delay in transfer of funds adequate quality of caesarean pays 55% more will fall 25% short of costs
from the central govt. for delivery care and only on average than a natural annually by 2020
health ~10% received effective birth)
• Donors fund 74% of health ANC • Private providers prescribe
services, often in disease • 60% of patients were not an average of 50%
specific verticals, rather than told the side effects of the additional medicines as
primary care drugs that they were compared to public
prescribed providers, often due to
financial incentives
FIGURE 3
Will the private sector in India be a threat or an ally of value?
India’s private healthcare providers have both Inappropriate care is not only costly, but also an
detracted from and improved the value of the additional health risk. Furthermore, it contributes
health system. to patients’ distrust of the health system.
Profit-seeking private providers often inflate On the other hand, India’s private healthcare
prices and prescribe unnecessary medicines providers also include a cadre of frugal
and procedures. The Times of India and other innovators.
top newspapers have reported on “price
gouging” by private providers. The National Organizations like Aravind Eye Care, Care
Pharmaceutical Pricing Authority (NPPA) has Hospitals, LifeSpring, and Narayana are well
documented profit margins of 300% - 1,500% known as value leaders. They deliver world
for common medical devices. A recent study class healthcare at low cost, and even offer
of maternal care in India reported that 40% of free or subsidized services for the lowest
births in the private sector are delivered by income. They are early proof-points that
c-section, while the WHO estimates 10% of delivering value to patients can be a winning
births require the procedure. business strategy.
Singapore
Japan
United Kingdom
Thailand
70 Mexico
Brazil
Bangladesh
Indonesia
Russia
60
Kenya
Pakistan
Ethiopia
India
South Africa
Tanzania
50 Malawi
Democratic Republic of the Congo
Nigeria
Leapfrog Follow
FIGURE 5
A narrow window of opportunity
Status of health
systems development LMIC health systems have a choice whether to follow or leapfrog
NASCENT
FOLLOW LEAPFROG
Point of feasibility
• Track inputs and • Track outcomes and
Data systems outputs true costs of care, in
• Account for charges addition to inputs and
outputs
MATURE
FIGURE 6
Volume and value
LMICs need to increase both value and volume to achieve universal health coverage
FIGURE 7
Best practices in value-based care
MEASURE
value in terms of
outcomes and costs
DELIVER PAY
value by using data to for value to incentivize
learn and improve continued
performance improvement
MEASURE
What a health system chooses to measure is its north star. It guides how it learns,
improves, and innovates. It is the basis for how success is defined and how resources
flow. If the goal is to maximize value—outcomes achieved for resources spent—
measuring value is imperative.
Innovator example:
MomCare has adapted ICHOM’s standard set for maternity care to the Kenyan context. The patients—
primarily pregnant women in the informal settlements surrounding Nairobi—report measures such
as birth experience, success with breastfeeding, and confidence in their new role as a mother. It is
the first time many of these women have been asked about their subjective wellbeing in the health
system before. Providers currently capture this data via SMS and patient surveys, but if successful,
patient reporting could become an automated feature in the MTiba mobile platform. Patients would
then contribute to their own health history by self-reporting outcomes. With over 4 million MTiba
subscribers to date, it could become one of the first examples of PROMs being captured at scale in
any country, high- or low-income. 18
Innovator example:
Using Meso, a new member can enroll within minutes and receive a health insurance card that
follows patients along every step in the healthcare journey. When the member visits a health
facility, her card is scanned using Meso’s mobile application, which brings up her medical record.
The same application is used to document labs, drugs, and services that she receives, which can
be submitted by the health facility and reviewed by the health insurance administrator in nearly
real time.
Meso surfaces data to administrators at all levels of the health insurance system. At the facility and
district levels, providers can use Meso to track expecting mothers from first visit to delivery, as well
as referrals to other levels of the health system. By following patients across their patient journey,
Meso is able to track cost data longitudinally.19
Health systems that embrace value-based measure- Provider performance can be heavily influenced by
ment principles will begin to track data they haven’t the makeup of their patients, making it difficult to
tracked before. To draw insight from this new data and fairly compare providers. Without accounting for this
to use it to inform decision-making, they must stan- variation, providers may be inclined to cherry-pick
dardize, benchmark, and risk-adjust it. patients who are more likely to have good outcomes
and to avoid more vulnerable patients. Strong value-
Standardization of value measurement is the first based health systems prevent that gamesmanship by
step to comparing performance across providers and risk-adjusting data according to common risk factors.
payers. This should be done at the level of a care path- For example, the expected outcomes and costs for
way, defining a set of patient-centered outcomes and a pregnancies of women who have high blood pressure
costing method for each pathway. ICHOM has defined or HIV would be different for a woman without those
“standard sets” of metrics for several care pathways, risk factors. Risk adjustment can be achieved either
primarily with high-income countries in mind. There is by defining separate patient segments (e.g. separating
an opportunity to build on that work and begin defin- high-risk pregnancies) or by developing algorithms to
ing standard sets for the highest priority care pathways adjust provider performance based on the risk profile
in LMICs. Once measurement standards have been set, of their patient panels.
Innovator example:
Medical Mobile configures the toolkit for each health system. It collaborates with stakeholders to
standardize metrics that track coverage, speed, quality, and equity of services provided. Community
health workers contribute to the approach using principles of human-centered design, strengthen-
ing the link between data collection and data use. CHWs report metrics through SMS or the app
interface. Supervisors can review this data by individual health worker, or in aggregate. The dash-
board compares this data against historical averages and high-performing peers, and can stratify
the data by different risk groups. This enables supervisors to anticipate outbreaks, support overbur-
dened health workers, and identify and resolve problems in the care model.
Innovator example:
Clínicas del Azúcar (CDA) is a “one-stop shop” for diabetes care in Mexico that
emphasizes the importance of lifestyle interventions to improve outcomes. CDA
follows in the footsteps of other frugal innovators in healthcare to offer low-cost
annual diabetes management plans for its primarily low-income client base.
When a CDA patient enters the clinic’s doors, he passes through a series of stations designed to
meet his holistic health needs. After capturing basic demographic data at the front desk, the nurse
checks his blood sugar levels and examines his feet for signs of nerve damage. His A1c comes back
at 6% – his blood sugar is controlled. He’s been walking two times a day and cut out sugary drinks,
in line with the personalized wellness plan he and a nutritionist wrote together. Instead of seeing
the physician, he moves on to the nutritionist, who congratulates him on the progress and lets him
know the discounts he has received on membership fees for the hard work. He walks across the
room to the psychologist station next, where he describes how hard it is to change his habits amid
the pressure from his wife and children. The counselor urges him to bring in his family next time for
a group session. He ends his visit at the retail pharmacy on-site with a prescription for metformin.
The visit takes less than two hours, and along the way nurses have captured data that will inform
improvements in future treatment. Over the course of the year, CDA captures more than 2,000
variables per patient that influence both treatment decisions and cost analyses. They estimate that
each patient who joins the clinic lowers his or her chance of developing diabetes-related compli-
cations by 50%, demonstrating the value of looking beyond biomedical interventions, to address
social and behavioral determinants of health.21
Value-based delivery is built from patient-centered care pathways. For each path-
way, providers routinely review value-based data and use that insight to continu-
ously improve care. The end result is a well-balanced provider system, one that is
as capable of treating the sick as keeping the population healthy.
1 Design care pathways around the for accompanying a patient on their full care journey.
patient journey One provider may offer antenatal care for an expect-
ing mother, another may be responsible for delivery,
Current management frameworks in health face two and another may be involved if a complication occurs.
challenges. First, care is supply-driven, organized Yet health outcomes are generated across that full
around provider activities rather than around patient patient journey. So, when providers don’t partici-
needs. Second, there is a focus on productivity and pate in the full care pathway, they aren’t able to see
process compliance that often compromises learning how their effort contributes to overall outcomes.
and innovation. Value-based delivery offers an alter- For example, ANC nurses may not screen for mater-
nate organizational strategy for delivery, organizing nal syphilis, because they don’t see the impact their
care around patient-centered clinical pathways and inaction has on stillbirth and congenital infection.
equipping providers with the data insight, capabilities, Furthermore, patient experience suffers when they
and flexibility to optimize the value of those pathways. have to piece together components of healthcare
for themselves.
Why should care be organized into pathways around
the patient? Today, providers are rarely responsible
Innovator Example:
Jacaranda provides this type of patient-centered, integrated care at a price point below most private
competitors and with a 60% lower complication rate than peer hospitals. Other private hospitals in
the local market have lowered prices to remain competitive with Jacaranda’s costs. It is an example
of the ripple effects of high value providers. Now Jacaranda is working on a round of investment to
expand to two more hospitals.
Innovator example:
Supervisors triangulate the dashboard results by shadowing CHWs and conducting follow-up home
visits to understand patient satisfaction with care. They then meet with health workers one-on-one
to discuss the results and complete the feedback loop. Muso studied the results of the model via
randomized-controlled trial and found that supervision with the dashboard significantly increased
coverage without sacrificing either the quality or speed of care. The study also documented signif-
icant increases in quantity, speed, and quality of care by CHWs while they were receiving 360°
Supervision with real-time feedback and personal action plans for improvement from a dedicated
supervisor. The government of Mali plans to implement the 360° Supervision model for all CHWs
nationwide. If successful, Mali’s system could become a model for real-time feedback and improve-
ment at scale.22
Innovator example:
Sevamob’s model is B2B. Its customers include employers, schools, NGOs, corporates, and local
government that purchase care for a population. Care covers general health, vision, dental, nutri-
tion, and infectious disease. Depending on the outcomes specified in the contract, the patients
receive weekly, monthly, or quarterly pop-up clinic visits and access to telehealth between onsite
visits.
On clinic day, a Sevamob team (including a general physician, nurse, and data collector) arrives on
site with tablet computers, rapid diagnostic kits, microscopes, and other equipment on hand. The
data collector onboards the patient and captures demographic information while the nurse uses
Sevamob’s AI-based point-of-care diagnostics. The physician performs the consultation and writes
prescriptions or dispenses generic medicines for common diseases. Between the pop-up clinic
visits, patients have access to phone-, web- or video-based telehealth. Sevamob and its payer
clients use online dashboards to track performance.
Sevamob has committed to improving health outcomes via these interventions by reducing malnu-
trition, infectious disease, dental complications, and vision defects in high-risk groups. The success
of its model lies in its ability to triage patients in the community setting, and to deliver early and
ongoing preventative care. By reimagining the setting of care, Sevamob is improving access and
quality to primary care services, while reducing costs.25
3 Reward caring for the sickest and most remote to ensure all
patients benefit from value-based care
How resources flow in a system can act as the invisible hand that shapes how and
where care is delivered, how the health sector recruits talent, and which facilities
and infrastructure attract investment. Given these far-reaching implications, it is
important payment design reflects a health system’s priorities.
Value-based payments present an opportunity to to seek care in a cost-effective way. Results-based
shift away from prevailing resourcing models in the financing and pay-for-performance models draw on
private and public sectors. Fee-for-service payments, these approaches. Value-based care has the potential
which dominate the private sector and some new to add to the arsenal of strategic purchasing models
public insurance schemes, can be useful in generating that more tightly align payments with the objectives
productivity. However, they can also induce provid- of achieving outcomes and efficiency.
ers to deliver unnecessary care that drives costs and
can even be harmful. Budgeting systems in the public There is no single payment model to increase value.
sector, while simple to operationalize, typically don’t Like delivery models, payment models require ongo-
encourage resource stewardship and performance ing experimentation and adaptation to fit local
accountability. contexts. That experimentation can help systems
understand how payment models influence productiv-
Health systems have begun to adopt a variety of ity, quality of care, cost efficiency, and innovation. So
strategic purchasing mechanisms to address those instead of asserting a single payment framework, it is
challenges.26 These mechanisms can determine what instead useful to heed a few principles that can guide
services are purchased, from which providers. And experimentation.
they can use financial incentives to encourage provid-
ers to deliver high quality care and to prompt patients
Innovator example:
Providers who work for the health system agree to receive a set salary and forego kickback arrange-
ments for referrals and prescriptions. This removes incentives to deliver unnecessary procedures
and medications. Moreover, Swasth offers a clear pricing structure for procedures to patients. For
some services, prices include service guarantees. If a patient experiences a complication following
a dental procedure, for example, Swasth provides corrective care at no extra cost. This redistributes
financial risk following a procedure from patient to Swasth and realigns incentive structures to focus
on high-quality care.27
Innovator example:
Thailand was one of the first middle-income countries to expand health coverage to
all citizens. Its experience with payment transformation illustrates the complexity that
goes into designing appropriate incentive structures.
As early as 2001, the country adopted a capitated system to finance primary care and diagnosis
related group (DRG) reimbursement for hospital care. The shift was a success from patients’ and
payers’ perspectives. Health coverage improved greatly, with nearly 100% of the population receiv-
ing coverage for essential services. Costs for the average citizen also dropped, catastrophic health
spending more than halved, alleviating poverty for an estimated one million citizens, and overall
health expenditure remained relatively constant. By most measures, Thailand was well on its way
to high-value care.
However, providers were increasingly dissatisfied, forcing the health system to reexamine its
payment scheme regarding provider motivation, productivity, and cost efficiency. Private primary
care providers were overburdened by the demand for health services at below-cost capitation,
causing them to compromise on quality, or pass patients on to higher levels of care. The health
ministry increased capitation rates and implemented a provider pay-for-performance program to
reward quality to respond to these challenges. It is still experimenting with payment structures today.
Thailand’s experience shows how a commitment to learning and experimentation with payment
models can lead to continuous improvement. 28
Innovator example:
Einstein Hospital in Brazil has designed a value-based care system that works to
incentivize care for high-risk groups. Einstein is testing a risk-adjusted bundled
payment model for several conditions, beginning with diabetes and coronary heart disease, that spans
primary and secondary care.
These payments are the product of a three-year pilot which tracked patient health outcomes and costs
longitudinally across different episodes of care. Patients were sorted into three risk groups based on
demographic variables correlated with overall health status (e.g., income, education level, BMI, history
of preexisting conditions). Costs were calculated by risk group, allowing the health system to calibrate
its bundled payments based on patients’ personal risk profiles and reimburse provides appropriately for
sicker patients’ more intensive healthcare needs.29
Innovator Example:
The United States has experimented with accountable care organizations (ACOs)
as one example of value-based care that integrates measurement, delivery, and
payment best practices. ACOs are networks of provider and payer organizations
that enter into a risk-sharing arrangement. Providers agree to oversee the health of a given popu-
lation. If they lower costs while maintaining quality, they share in the cost savings that accrue to
insurers. In this manner ACOs align provider and payer interests. Through the Medicare Shared
Savings Program (MSSP), roughly 11 million Americans receive care through an ACO model.
Some ACOs have seen great success using the core principles of value-based care. The Rio Grande
Valley (RGV) ACO is one such example that faces many of the same challenges common to patient
populations in LMICs. Located on the border of Texas and Mexico, RGV oversees primarily low-income
and rural enrollees with a high disease burden and high cost of care (~40% above national average).
RGV’s approach to diabetes care illustrates how it employs value-based care best practices. On
intake, RGV identifies patients who have diabetes—roughly 45% of their membership. Physicians
proactively engage these patients to enroll them into a diabetes care management. Once enrolled,
RGV tracks patient-centered outcomes in a diabetes registry and regularly solicits patient feedback.
Each of the 13 practices in the ACO are able to visualize its performance on outcomes relative
to peers. This data informs a monthly Quality Assessment Process Improvement meeting which
provides an opportunity for interdisciplinary teams to contribute to delivery improvements. In addi-
tion, high-performing clinicians routinely coach new staff.
For ACOs that achieve a threshold performance on quality metrics, MSSP shares cost savings rela-
tive to a baseline performance. To motivate staff, RGV distributes some of its shared savings in the
form of performance-based pay. This system of financial incentives reinforces RGV’s value-based
care approach.
RGV’s performance has reduced per capita costs of care by 14% primarily through reductions in
hospital utilization, all while achieving top-notch health outcomes for a particularly underserved
population in the United States.30
FIGURE 8
The equation for value
OUTCOMES
VALUE = COSTS
6
5M Improve environmental /
5
metabolic determinants
(~60%) (e.g. air quality)
4 3.6M
3
Improve care quality
Improve access / supply
(~5M lives)
2 of care (~70%)
Improve behavioral
determinants, e.g. smoking
1 (~40% or ~3M)
Improve demand for care
(~30% or ~1M lives)
0
quality non utilization
The third lever is improving the demand for care. In assessment of mortality due to non-utilization and
reorienting care around the patient and aligning the estimate demand-side factors account for 1 million
health system around outcomes that matter to the deaths per year. Supply-side constraints (e.g. lack
patients, value-based care can improve how patients of facilities and healthcare providers in rural areas)
seek care. Review of literature and expert interviews remain important drivers of non-utilization of health-
suggests that approximately 20 to 40% of non-utili- care services. By incenting efficient use of resources,
zation can be attributed to demand-side factors. We value-based care may improve the supply of care, too,
apply this fraction to the Lancet Quality Commission’s but we do not include this potential in our estimate.
FIGURE 10
VBC’s potential to impact costs Governments struggling with financial solvency
of health coverage schemes
Total health expenditure in LMICs ($) (2015)
Households pushed into poverty due to health
spending (~100M people per year globally)
850B Donor funds declining as portion of total health
expenditures
WHO estimates 20-40% of
health spending is wasted A snapshot of
through inefficiency, per capita spending by actor
representing ~$250B of ~250B ($PPP per capita)
waste in LMICs.
97
This places unsustainable
pressure on governments,
households, and donors 50 19 28
already overburdened by
healthcare costs.
Low
600B 258
168 82 8
Lower-middle
TOTAL
There are trends in LMICs that support the core Three kindred movements will help countries achieve
principles of value-based care. They include policy, value on the path to UHC: primary and community
technology, and societal tailwinds that, if harnessed, care, quality of care, and strategic purchasing.
can help countries capture the leapfrog opportunity
(figure 12). First, the movement for primary and community
care has made an investment case for strengthen-
Policy ing the highest value healthcare settings. While the
The movement to achieve UHC presents an opportu- public health community has recognized the value of
nity to steer health systems toward value. Numerous primary and community care for years, donors and
countries and development partners have signed on to country governments have recently doubled down
the Global Compact to expand UHC to all citizens by on their efforts. The Global Financing Facility, the
2030. Regardless of the specific approach to coverage Primary Health Care Performance Initiative, and the
(e.g. insurance or direct public delivery), risk-pooling Community Health Impact Coalition, for example,
and shifting away from out-of-pocket payments create partner directly with countries to improve these
an opportunity to redesign measurement, delivery, systems.
and payment systems. Countries face a choice: they
can expand coverage under the status quo or use the Second is the quality of care movement. The Lancet
momentum of UHC to explore higher-value alternatives. Quality Commission’s landscape report in 2019
showed that healthcare quality has surpassed access as
FIGURE 12
Tailwinds of Change
TAILWINDS HEADWINDS
• The move toward UHC and the rise of risk pooling give Policy
citizens the collective power to demand better care UHC systems continue to
• The primary and community care movement refocuses measure and reimburse
healthcare on the highest value care settings volume, with care
• The quality of care movement draws more centered in hospital
resources to ongoing efforts to strengthen how we settings
measure, deliver, and pay for quality
• The strategic purchasing movement pushes for
measurable impact for every dollar spent
FIGURE 13
The path forward Leapfrog
Experiment
Scale what works
Integrate value into
digital health strategies
Build the enabling
environment
Define a focus
Balance provider infrastructure
and capabilities
Spark a global
Launch and support movement
experimentation
Communicate a
long-term vision
Generate evidence to
inform next steps
Activities
i. Outcomes. Selecting experiments based on ii. Providers. Value-based care cannot make up
health ouctomes may (1) align with a country’s for severe deficiencies in provider capacity.
progress toward SDG targets, such as reducing Having essential staff, medicine, and equip-
maternal and neonatal mortality; (2) address ment is a prerequisite to value-based care.
high growth care pathways, such as diabetes Experimentation should therefore target care
or other NCDs; (3) or respond to persistent settings that are challenged by quality and
threats to public health, such as TB. cost-effectiveness, rather than access.
i. Costs. Countries may also direct experimen- iii. Provider and payer alignment. Experimen-
tation to address cost saving opportunities. tation offers the most potential in contexts
Hospital care has been a key driver of costs where providers are accountable to payers
in many countries that have pursued UHC. for delivering value. There are a few common
To address these costs, countries may direct archetypes of this situation: 1) A public delivery
experimentation toward patient segments system where the government (as a payer) has
who contribute most to hospital costs. the management capacity to motivate frontline
FIGURE 15
Successful innovation platforms
10B
The Center for Medicare and Medicaid Innovation
(CMMI) designs and tests new value-based care
pilots in the United States. It is funded and in funding
managed by the country’s national public insurance
scheme, and a clear example of how value-based
innovation can scale in the public sector 40+ pilots
launched
1 2 3
Define a strategic focus Launch and support experimentation Decide next steps
Invest in key focus areas Call for Grant period of ~3 Ongoing monitoring If pilot meets
• Value based payment applications via years for providers and evaluation from objective, secretary
models a competitive to test and refine CMS to determine if has power to scale
• Primary care tendering model pilot meets primary program nationally
transformation process for objective: decrease via Medicare
• Priority patient experiments in costs while
populations focus areas maintaining or If pilot is not
• Accelerating best improving health successful, it can
practices outcomes be discontinued or
extended for
Focus areas informed by… further testing
Congressional Public ‘listening
mandate to test sessions’ with
new payment thousands of
models innovators
53
28 Thaiprayoon & Wibulpoprasert, Observer Research Foundation, “Political and policy lessons from Thailand’s
UHC experience” 2017; Hanvoravongchai, World Bank, “Health financing reform in Thailand: toward universal
coverage under fiscal constraints” 2013.
29 Medtronic “Einstein hospital case study: aligning value.”
30 McClellan et al., World Innovation Summit for Health, “Implementing accountable care to achieve better
health at a lower cost” 2016; Brookings Center for Health Policy “Enhancing diabetes care through personal-
ized, high-touch case management” 2016.
31 Kruk et al., 2018.
32 IHME “Global burden of disease” 2017.
33 Xu et al., WHO, “Public spending on health: a closer look at global trends” 2018.
34 Augustina et al.; Lancet, “Universal health coverage in Indonesia: concept, progress, and challenges”; 2018.
35 WHO, “The world health report-health system financing the path to universal coverage” 2010.
36 Albejaidi et al, American International Journal of Research in Humanities, “Cost of waste and inefficiency – a
health system perspective” 2017.
37 Hostetter, The Commonwealth Fund, “Profile: Rio Grande Valley ACO Health Providers” 2014.
38 Business Wire, Texas ACO Generates $14 Million in Savings and Achieves Perfect Quality Score” 2017.
39 Global Expected Health Spending 2017-2050. IHME 2019.
40 Spring 2018 Global attitudes survey. Pew Research Center, 2018.
41 Constable, Financial Review, “India’s rapid rise and growing middle class creates hunger for commodities”
2018.
42 ChenMed: PatientCentered Care for Medicare Advantage Patients. Better Medicare Alliance spotlight, 2018.
43 CareMore: Improving Outcomes and Controlling. Health Care Spending for High-Needs Patients. Common-
wealth Fund, 2017.
44 Interview, National Health Authority, 2019. The grand challenge model is a call for proposals to solve major
social problems. See, for example, https://grandchallenges.org.
45 CMS Innovation Center 2018 Report to Congress. https://innovation.cms.gov/Files/reports/rtc-2018.pdf.
46 Global Digital Health Index. http://index.digitalhealthindex.org.
47 Prequin Private Equity in Healthcare report, 2015.
48 WHO Resolution on Digital Health, 2018 http://apps.who.int/gb/ebwha/pdf_files/WHA71/A71_R7-en.pdf.
49 The Principles of Donor Alignment for Digital Health: https://digitalinvestmentprinciples.org/.
50 E-Estonia Interoperability Services, 2019 https://e-estonia.com/solutions/interoperability-services/.
51 Ringel, Scientific American “Electronic Health Records and Doctor Burnout” 2019.
52 Starfield et al, Milbank Quarterly “Contribution of primary care to health systems and health” 2005.
53 Glassman et al, Center for Global Development “What’s in, What’s out” 2017.
54 Public Private Partnerships in Health, International Finance Corporation, 2019 www.ifc.org/wps/wcm/connect/
Industry_EXT_Content/IFC_External_Corporate_Site/PPP/Priorities/Health.
55 Lin, Sharma, USAID Center for Impact and Innovation “Greater than the Sum of its Parts. Blended Finance
Roadmap for Global Health” 2019.
56 Drobac et al. AMA Journal of Ethics, “Medical Education and Global Health Equity” 2016; https://amphealth.
org/.
54
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56
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