A Model to Determine Value of Care Delivered at the Level of Individual Providers in an Organization

Abstract

Introduction

Value in health care has been defined as health outcomes achieved per dollar spent. The concept of value is a shift from the traditional volume-based health delivery system. The implementation of value-based health care has generally been at an institutional level. The objective of our study was to calculate and compare the value of health care delivered by nine individual surgeons at a single institution for laparoscopic cholecystectomies, at the level of the provider.

Methods

Data were collected for laparoscopic cholecystectomies performed over 2 years from January 1, 2016, to December 31, 2017. Only elective cholecystectomies performed for noninflamed gall bladder were included in the analysis. Any patients admitted through the emergency department were excluded. Patients who had comorbidities requiring further workup after admission were also excluded. To the best of our knowledge, there is no published model for determining value at the level of the provider. Hence, we devised a formula to determine the value of health care provided by individual surgeons based on outcome 30 days after laparoscopic cholecystectomy: Value = Positive outcome score/Cost of care.

Results

A total of 1840 cholecystectomies were performed by nine surgeons in the study period, out of which 1402 met the selection criteria. There was a significant variation in the value provided by different surgeons according to our model.

Conclusion

Our proposed model differentiated the value provided by individual surgeons. Validation of the model on prospectively collected data is the way forward. The key points are: (1) There is a shift from volume-based healthcare to value-based healthcare (VBHC). (2) There is paucity of data about value provided by individual providers. (3) We propose a method of calculating and differentiating value provided by individual providers.

INTRODUCTION

Value-based health care (VBHC) is a relatively recent concept introduced by Porter and Teisberg in 2006.[1] They defined health care value as outcomes relative to costs. This was in contrast to the traditional health delivery system focused on volume. Porter and Teisberg theorized that the volume of health delivery does not necessarily lead to improved outcomes. However, it does lead to drastically increased health costs. The VBHC model was based on the theories dealing with competition and business strategies. VBHC is based on three main principles: creating value for the patients, basing medical practice and billing on medical conditions rather than paying for discrete services, and the measurement of outcomes relative to cost.[2–4]

VBHC has been implemented at multiple centers in the Western Hemisphere and research is ongoing regarding measuring health outcomes.[5] In the United States, the Centers for Medicare and Medicaid Services committed that 90% of Medicare payments would reward value by 2018, and insurance companies are starting to follow suit. In 2016, the Centers for Medicare and Medicaid Services made bundled payments for hip and knee arthroplasties mandatory in 67 regions.[6,7] This represents a trend that, soon, hospitals will be required to implement bundled payment plans for more and more ailments and interventions.[8]

VBHC implementation has shown some impressive results. Lee et al.[9] reported improved clinical outcomes with an 11% decline in costs for total joint replacements.

The VBHC framework has the potential to be implemented for evaluating the performance of individual health care providers to objectify the process of feedback. This has the potential of improving outcomes and reducing cost at the provider level. There is paucity of research about determining value in health care at the level of the provider. Our study aims to test a model for evaluating value based on individualized outcomes and costs.

MATERIALS AND METHODS

We conducted a retrospective cross-sectional study at the Aga Khan University Hospital (AKUH) in Karachi, Pakistan. AKUH is 550-bed tertiary care hospital. There are nine general surgeons who perform laparoscopic cholecystectomies.

Financial Model

There are three levels of service provided to patients: general, semi-private, and private. Clinical care provided across these types is the same, but cost varies due to other facilities provided in the rooms. The cost of care comprises all the expenses incurred per hospital admission, and consultant operation fees are part of it. The consultant operation fee is determined by the complexity of the case performed, as reported by the primary surgeon. The cost of treatment of any complications, including revisits or readmissions, is charged to the patient.

We conducted a retrospective review of our data for laparoscopic cholecystectomies for 2 years, from January 1, 2016, to December 31, 2017. Only elective cholecystectomies performed for noninflamed gall bladders were included in the analysis. We included both male and female adult patients of age 18 years and older. Patients who had comorbidities requiring further workup after admission were excluded.

To the best of our knowledge, there is no published formula to calculate and compare the value provided by individual surgeons. For this reason, we devised the following formula for determining the value of health care provided by individual surgeons per operative case:

The individual components are defined as follows.

Positive Outcome Score

The positive outcome score is determined using the occurrence of any minor or major postoperative issues, as follows.

Minor postoperative issue:

• Hospital stay more than 24 hours but less than 5 days

• More than one clinic follow-up visit within 30 days of operation

Major postoperative issues:

• Stay more than 5 days

• Emergency room visit or readmission within 30 days of operation due to issues related to cholecystectomy

The positive outcome score for any individual case was 100 if no major or minor issues occurred; it was given a score of 50 if any minor issue occurred and 0 if any major issue was encountered.

Cost of Care

The cost of care was the total cost incurred due to the patient's care, divided by the average cost of cholecystectomies performed at AKUH during the study period.

As cost varied according to the level of service requested, the cost of semi-private and private rooms was adjusted to the level of a general room by multiplying the cost of these rooms by 0.85 and 0.65, respectively.

Average Value Provided by the Individual Surgeon

The average value of laparoscopic cholecystectomies performed by each surgeon over the study period, along with 95% and 99% confidence limits for the number of cases, was calculated for the duration of the study using the proposed formula. Means of the value provided with confidence limits were calculated using statistical software (SPSS ver. 22; IBM Corp., Armonk, NY, USA). This average value was then plotted in a funnel chart.

Approval was sought from the institutional ethical review committee before the start of study. The approval number is 5179-SUR-ERC-18.

RESULTS

A total of 1840 cholecystectomies were performed by nine surgeons during the study period, out of which 1402 met the selection criteria. Excluded were 310 cases as they were admitted through the emergency room; 38 cases were excluded as they required additional workup, and 90 cases were excluded as those patients required additional procedures.

Out of 1402 cases included in the study, 817 patients (58.27%) went home on either the day of surgery or within 24 hours of surgery, while 16 patients (1.14%) stayed more than 5 days due to various reasons. One hundred thirty-one patients (9.34 %) had to follow-up in clinic more than once after being discharged from the hospital. Sixty-two patients (4.42%) had either an emergency room visit or were readmitted within 30 days of admission due to complications related to their operation.

The mean ± standard deviation of the total value provided by the surgeons was 83.95 ± 43.07. The number of cholecystectomies performed by individual surgeons along with average value provided is given in Table 1. Figure 1 shows a funnel plot with 95% and 99% confidence limits. The value provided by surgeons F and D was greater than the 99% confidence limit, while the value provided by surgeon C was below 99% confidence limit.

Table 1.

Number of cholecystectomies performed and value provided by individual surgeons

Surgeon Label	Number of Cholecystectomies Performed	Average Outcome Score	Average Relative Cost	Value
A	180	72.778	1.024	113.16
B	102	78.43	1.016	88.30
C	119	65.97	1.544	48.31
D	256	76.17	0.887	93.00
E	203	69.95	1.01	78.35
F	209	75.6	0.885	93.70
G	46	83.7	0.937	96.03
H	285	75.26	0.941	88.08
I	2	75	0.849	88.27

Bold numbers indicate poor scores; bold italic numbers indicate best scores.

Figure 1.

Funnel plot depicting value provided by individual surgeon for laparoscopic cholecystectomy along with 95% and 99% confidence limits.

DISCUSSION

Health care costs have been on the rise constantly. In the United States, health care costs are the highest in the world at an average of more than $10,000 per person per annum in 2016.[10]

The model of VBHC delivery by Porter and Teisberg^[2] is a paradigm shift from the fee-for-service volume-based model and claims to improve outcomes while cutting costs at the same time. This model is being adopted at hospitals around the world.[11] Aravind Eye Care System, a network of hospitals in India that provides high-value care to patients needing cataract surgery reported outcomes comparable to the world's best providers at only 10% of the cost of the same surgery performed in the United States.[12]

Our study is, to our knowledge, the first to not only introduce the concept of value in health care in Pakistan, but to the best of our knowledge it is also the first to introduce a model of evaluating individual providers based on the value and not solely the cost of health care they deliver. Although there are systems in place, in Sweden for example, of tracking outcomes at the provider level, our study takes it a step further and attempts to adjust those outcomes with cost to derive the value provided by each provider.[13] This model can help identify with higher accuracy where value provided is not up to the mark and help formulate a plan of action to improve value at the provider and institutional level.

Our results show a remarkable difference in the value provided to patients by different consultants. Our rationale of determining value provided at the provider level stems from the concept put forward by Porter and Teisberg^[3] that competition in health care, operating at the right level, drives improvement in efficiency and quality of health care. Thus, overall, it improves the value of health care being delivered.[1] As a primary health care system is not well established, some fraction of patients stay in the hospital for a day and, on rare occasions, more than a day after laparoscopic cholecystectomy. But with preoperative counseling about the procedure and expectations after the operation, we have seen a trend toward day surgery.

We recognize that our study has a few limitations. Validation of the formula on prospectively collected data is suggested. Moreover, there are multiple factors that determine the cost of each individual cholecystectomy; hence, outcome score could be correlated with cost of care. Standardizing the cost of the procedure according to the complexity of operation based on objective criteria and adjustment of outcome with respect to age, gender, and comorbidities of the participants is a step forward.

CONCLUSION

A model is proposed that differentiates value provided by individual surgeons. Further validation on prospectively collected data is the way forward.

Funding Statement

Source of Support: None.