TRANSITIONING TO VALUE-BASED HEALTHCARE IS WELL WORTH THE EFFORT PERSPECTIVES
An article from the Insights Series
An article from the Insights Series
Suppliers and providers are successfully collaborating to bring more value to patients and the healthcare system.
Mike Coyle, Executive Vice President and President of the Cardiac and Vascular Group, Medtronic
As healthcare providers prepare for an evolving environment that’s shifting away from a fee-for-service model, they’re embracing new ways — and establishing new partnerships — to drive better value and patient outcomes. Mike Coyle of the Medtronic Cardiac and Vascular Group has overseen the development of six commercialized Value-Based Healthcare (VBHC) programs and knows a thing or two about the complexities of implementing VBHC. He shares his personal insights, as well as what he’s heard firsthand from customers.
MC: I’ve gleaned from our customers that transitioning to VBHC is not an easy task, and it takes time. They’re learning that VBHC requires investing in data and talent to prepare for new payment models and regulations. With that said, providers see the changing landscape — one moving away from fee-for-service — with clarity. VBHC programs provide them the opportunity to adjust to these changes in a tangible way.
Medtronic is changing too, and VBHC is a big part of our transformation. In addition to developing products that deliver strong patient outcomes and economic value to the healthcare system, our goal is to help our customers make the most informed decision about the value of this technology.
MC: Foundational to any successful VBHC program is a deep knowledge of the clinical and economic outcomes that a solution brings to a patient cohort. In fact, our risk-share programs hinge on our ability to deliver superior clinical outcomes and economic value. Offerings like our TYRX and SmartShock risk-share programs are designed to put our money where our mouth is — if the expected patient outcome isn’t achieved, we pay the provider.
When developing VBHC strategies, we first rely on strong clinical data to baseline the clinical outcomes we expect for a patient population. Then, we study these patients in claims data to understand the economic impact this clinical benefit could have on a real-world population. This process helps us determine where and when to implement new risk-share programs. Alongside these strategies, we’ve invested in data assets from many sources, including Optum, to have a better longitudinal understanding of the cost of our therapies.
MC: Our customers are beginning to integrate their operational costs together with patient claims costs to create a robust view of where opportunities lie for improving patient outcomes. But as they do this, I’ve heard a common issue around hospital data systems; systems that weren’t originally designed to generate the analytics needed for VBHC. Working with imperfect and siloed data to follow patients along an entire care pathway can be arduous. Sharing information externally can also be a challenge, given much of it is patient health information (PHI).
While it hasn’t been an easy transition, integrating data is a necessary step to understanding the clinical and economic outcomes associated with a VBHC program.
I’ve seen more customers building their data warehouse capabilities and successfully leveraging that data to identify areas for care improvement. These organizations’ ability to create broad solutions for data connectivity will have a positive effect on the acceleration of VBHC.
MC: When you can reduce the number of patient interventions and reduce a patient’s visits to the hospital, that decreases costs while creating a more patient-centric experience. That’s what VBHC is all about.
To give a real-world example, we have a risk-share program for our TYRX absorbable envelope — a product that can help reduce the infection rate for patients receiving an implantable device, like a pacemaker. We know that every time a device-related infection is avoided, the patient is happier, and the payer saves around $57,000. That’s a significant impact on overall costs.
The adoption of VBHC has also increased awareness around the long-term clinical and economic benefits of products and therapies, which I believe results in a better overall accounting of the financial implications that medical decisions place on the healthcare system.
All of our therapies play a role in alleviating pain, restoring health, and extending life. VBHC combines this with actionable clinical data that demonstrates how these therapies can drive more effective, efficient care. That’s a winning recipe.
Mike Coyle of the Medtronic Cardiac and Vascular Group has overseen the development of six commercialized Value-Based Healthcare (VBHC) programs and knows a thing or two about the complexities of implementing VBHC. He shares his personal insights, as well as what he’s heard firsthand from customers.