“Activist payers” and the global drive for sustainable health systems Mark Britnell Chairman and Partner Global Health Practice KPMG Member of the World Economic Forum Global Agenda Council 60 countries, 180+ occasions. © 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 1 World Economic Forum, Davos 2012: “The financing of health systems has increasingly burdened developed economies, which has been exacerbated by the fiscal crisis. Participants agreed on the drivers of the expenditure growth and, since many of these factors are unlikely to recede (e.g. ageing, lifestyles, public expectations), there is a clear need to develop a more sustainable way of managing health systems. The magnitude of health financing challenges suggests that incremental solutions may not be enough; however, a shared vision of new models for health systems does not yet exist.” Source: The Great Transformation: Shaping New Models – World Economic Forum Annual Meeting Davos 2012 Consensus on major trends. 1 2 3 4 5 Payers are becoming ‘activist’. Some hospitals are transforming into health systems. Patients becoming active partners. High growth health systems, providing new perspectives on health reform. Innovative integration and partnership. © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. 3 Passive funder to activist payer. Make the organisation capable of contracting for outcomes and value. Find new ways to connect with – and empower – patients. Increase focus on the management of overall population health, ‘moving care upstream’. Information, segmentation and stratification. Delivery must be integrated and coordinated. Payment reform is key; from volume to value. © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. 4 65 senior healthcare leaders from 30 countries Vektis Mr. Herman Bennema General Director Discovery Health Dr Jonny Broomberg CEO All-Party Parliamentary Group on Global Health Lord Nigel Crisp Co-Chair Fundaçâo Antonio Prudente Mr. Irlau Machado Filho CEO Monitor Dr David Behan CEO Hospital Sirio Libanes Dr. Paulo Chapchap Strategy Director Médica Sur Mr. Antonio Crosswell CEO Institute Gustave Roussy Mr. Charles Guepratte Deputy CEO Institute for Healthcare Improvement (IHI) Ms. Maureen Bisognano President and CEO Karolinska University Hospital Dr. Soki Choi Project Leader of “Nya Karolinska” Salford Royal Hospitals Foundation Trust Sir David Dalton CEO National Voices Mr Jeremy Hughes Chair West/North West Hospitals Group Mr. Noel Daly Chairman Virginia Mason Medical Centre Dr. Andrew Jacobs Medical Director Alberta Ministry of Health Ms. Janet Davidson Deputy Minister Wiener Krankenanstalt-enverbund Prof. Dr. med. Udo Janßen CFO Nuffield Trust Mr Nigel Edwards CEO Keiju Healthcare Systems Dr. Masahiro Kanno CEO Unfallkrankenhaus Berlin Prof. Dr. Med. Axel Ekkernkamp, CEO Royal Liverpool and Broadgreen Uni. Hosp. Mr. Aidan Kehoe CEO The Society for Family Health Sir Bright Ekweremadu Managing Director NHS England Mr. Tim Kelsey National Director for patients and information Swiss Medical Group Mr. Miguel Carlos Blanco CEO Buurtzorg Netherlands Mr Jos de Blok Director Health and Social Care Northern Ireland Mr. John Compton CEO Queensland DoH, Health Services Division Dr. Michael Cleary Deputy Director-General South Metropolitan Health Service Prof. Robyn Collins Adj. Associate Professor Menzis Mr. Roger van Boxtel CEO Centers for Medicare & Medicaid Services (CMS) Ms. Julie Boughn, Former Deputy Director, Center for Medicaid and CHIP Services Former CIO Memorial Sloan Kettering Dr. Murray Brennan VP, International Programmes Access Health Connecticut Kevin Counihan CEO © 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 5 65 senior healthcare leaders from 30 countries Achmea Mr. Roelof Konterman CEO Faculty Hospital Brno Dr. Roman Kraus CEO Foundation Hospital St Joseph Mr. Jean-Patrick Lajonchere, CEO Hygeia Group Ms. Fola Laoye Chairwoman Yonsei Univ. Health System Severance University Hospital Dr. Chul Lee President and CEO Myong-Ji Hospital M. Wang-Jun Lee CEO and Chairman Department of Health of the Canton Zurich Mr. Hansjörg Lehmann Head of Health Planning and Control Peking University Prof. Ling Li Professor United Family Healthcare Ms. Roberta Lipson Chairwoman NHS Leadership Academy Ms. Karen Lynas Deputy Managing Director Health and Social Care Board Northern Ireland Pamela McCreedy Director The Economist Ms. Anne McElvoy Editor Health Service Journal Mr. Alastair McClellan Editor Espria Mr. Marco Meerdink CEO CZ Mr. Wim van der Meeren CEO Life Healthcare South Africa Mr. Andre Meyer, CEO Birmingham University Hospitals NHS FT Dame Julie Moore CEO UCL Hospitals NHS FT Sir Robert Naylor CEO Singapore Health Services Prof. Ivy Ng Group CEO NHS England Sir David Nicholson Former CEO Department of Health Ms Una O’Brien Permanent Secretary The Royal Marsden NHS Foundation Trust Ms Cally Palmer CEO Narayana Health Dr. Ashutosh Raghuvanshi Vice Chair, Group CEO Humanitas Mr. Luciano Ravera CEO Public Health Foundation of India Prof. K. Srinath Reddy President © 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The Investment Fund for Healthcare in Africa Mr. Onno Schellekens Managing Director Apollo Hospitals Lt. Gen. Dr. M. Singh Director Medical Services KPJ Healthcare Berhad Siti Sa’diah Sheikh Bakir Corporate Advisor St Joseph’s Healthcare, Hamilton Dr. Kevin Smith President and CEO Geisinger Health System Dr. Glenn Steele President and CEO National Voices Mr. Jeremy Taylor CEO Assuta Medical Centres Mr. Pinhas Tsruya CEO Ministry of Health Prof. Josef Vymazal First Deputy Minister NSW Ministry of Health Mr. Ken Whelan Deputy Director General 6 #1 Organisations and health systems are not aligned for sustainable transformation 72% think existing hospital business models are sustainable but 98% expect moderate or major change to their health systems Do they believe change starts with someone else? “The current business models operated by hospitals in my system are...” How much change do you expect in the shape of the provider system and their business models in the next 5 years? Rome 2012 60% London 2014 53% 61% 60% 50% 41% 40% 30% 30% 20% 16% 52% 50% 37% 40% 10% 70% 19% 13% 37% 30% 16% 20% 11% 4% 3% 0% 10% 4% 0% 0% 0% 4% 3% 0% Not at all Not very Somewhat sustainable sustainable sustainable Very Extremely sustainable sustainable Source: KPMG pre-conference surveys: Rome 2012 and London 2014 Not sure No signif icant change Minor change Moderate changes Major changes #1 Organisations and health systems are not aligned for sustainable transformation Our crowd sourcing community revealed a major disconnect between their organisation and health system Twice as many thought the wider system required fundamental change What is the scale of change required in your organisation? Fundamental 35% Moderate 36% Incremental What is the scale of change required in the healthcare sector in your country? 73% 19% 7% 16% Very little 6% 1% No change is required 6% 1% 0% 20% 40% 60% Sources: KPMG What Works Healthcare Insights global crowd sourcing community 80% 0% 20% 40% 60% 80% #1 Organisations and health systems are not aligned for sustainable transformation While most strategic effort is focused on transactional – not transformative – changes, integration is much more prominent. 93% 85% 85% 81% 85% 81% 74% 74% 85% 78% 63% 52% 41% 44% 33% 30% Source: KPMG pre-conference surveys: Rome 2012 and London 2014 Entry into new markets in the country Vertical integration Acquisitions of other provider types Acquisitions of other hospitals Mergers Income growth f rom existing payers Developing new workf orce models 22% 30% 19% Investment in health IT 52% 56% Focus & specialization 50% 56% Expansion into overseas markets 44% Lean or other improvement methods 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Major cost reduction % of responses: 'Likely' or 'Very Likely' Which strategies are providers likely to adopt to respond to these changes? #2 People believe that integration is critical for improved health system sustainability 82% of global respondents believed their health system will become more integrated over the next 5 years "My health system is planning to redesign care within the next 5 years to create more integrated delivery" 60% 52% 50% 40% 30% 30% 20% 11% 7% 10% 0% 0% Strongly disagree Disagree Neither agree nor disagree Sources: KPMG Global Healthcare Conference 2014, pre-conference survey Agree Strongly agree #2 People believe that integration is critical for improved health system sustainability 80% of global respondents agreed that fragmented care hampered clinical effectiveness and operational efficiency "Fragmented patient pathways – within my organisation and across my health system – compromise clinical effectiveness and operational efficiency" 70% 58% 60% 50% 40% 30% 22% 19% 20% 10% 0% 0% Strongly disagree Disagree 0% Neither agree nor disagree Sources: KPMG Global Healthcare Conference 2014, pre-conference survey Agree Strongly agree #2 People believe that integration is critical for improved health system sustainability 71% of global respondents believed that greater primary and secondary care integration was beneficial "Bringing primary and secondary care together into the same organisation does not create sufficient additional value to justify the difficulty of doing so" 60% 56% 50% 40% 30% 20% 19% 15% 11% 10% 0% 0% Strongly disagree Disagree Neither agree nor disagree Agree Sources: KPMG Global Healthcare Conference 2014, pre-conference survey Strongly agree #3 Patients, when empowered, will create more value 72% of global leaders believe empowered patients create better value care "With the right support and empowerment patients actively managing their own care creates better value care" 50% 44% 45% 40% 35% 28% 30% 25% 17% 20% 15% 11% 10% 5% 0% 0% Strongly disagree Disagree Neither agree nor disagree Agree Sources: KPMG Global Healthcare Conference 2014, pre-conference survey Strongly agree #3 Patients, when empowered, will create more value However, 89% of leaders believe their health systems are designed around organisations’ – not patients’ – priorities and they are not very satisfied they are meeting patients’ needs “The delivery of healthcare is currently structured more according to organisational structures and boundaries than the needs of the patient" 70% How satisfied are you that your organisation is truly meeting the aspirations of your patients? 80% 70% 58% 60% 70% 60% 50% 50% 40% 31% 40% 30% 30% 20% 19% 20% 10% 8% 4% 0% 0% Strongly Disagree Neither Agree Strongly disagree agree agree nor disagree 10% 7% 4% 0% Very satisfied Somewhat Somewhat Very satisfied dissatisfied dissatisfied Source: KPMG Global Healthcare Conference 2014, pre-conference survey #3 Patients, when empowered, will create more value 79% of our crowd sourcing community believed patient experience indicators are being more widely used; only 14% of global leaders thought their patients were becoming ‘active’ Is patient experience a key performance indicator for your organisation? “In my organisation patients actively participate in managing their own care” 50% 46% 90% 45% 79% 80% 40% 70% 35% 60% 29% 30% 50% 25% 40% 20% 30% 14% 15% 17% 20% 10% 4% 10% 5% 3% 0% 0% 0% Yes No Don't know Sources: KPMG Global Healthcare Conference 2014, pre-conference survey KPMG What Works Healthcare Insights global crowd sourcing community Strongly Disagree Neither disagree agree nor disagree Agree Strongly agree #4 There is some distance between what patients want and what they get Unique global insights from patient support and advocacy groups, representing millions of patients across 6 countries Federação Brasileira de Instituições Filantrópicas de Apoio à Saúde da Mama ABRA SUS ABCD: Associacao Brasileira de Colite Ulcerativa e Doenca de Crohn Canadian Cancer Survivor Network Canadian Diabetes Association Canadian Breast Cancer Network / Reseau healthexperiences.ca Canadien du Cancer du Sein Hong Kong Breast Cancer National Childbirth Diabetes Hong Foundation Trust Kong Macmillan Cancer Support Hong Kong Alliance of Patients’ Organizations National Voices Source: KPMG-commissioned global survey of patient representative and advocacy groups American Cancer Society Childbirth connection Crohn’s & Colitis Foundation of America Dutch Patients & Consumers Organisation European Patients Forum Families USA Nederlandse Diabetes Vereniging Crohn en Colitis Ulcerosa Vereniging Nederland #4 There is some distance between what patients want and what they get Our global research suggests 5 dominant themes: 1 “See me – and support me – as a person, not a condition or an intervention site” 2 Patients want to be informed partners in care 3 Fragmented care is harmful and wasteful care. Patients can feel “abandoned” (especially after discharge) 4 Patients want to be empowered partners in care 5 In some countries securing responsive access to care is a fundamental priority Source: KPMG-commissioned global survey of patient representative and advocacy groups #4 There is some distance between what patients want and what they get While our crowd sourcing community overwhelmingly believed that patient experience is now a key performance indicator, more needs to be done on activation and empowerment "Measurements of patient experience impact on how my organisation delivers care" 70% Are patient experience measures used in the performance appraisal of clinical staff and managers within your organisation? 100% 62% 60% 50% 90% Clinical staff 80% Managers 70% 60% 40% 50% 30% 26% 37% 40% 42% 30% 20% 10% 46% 46% 6% 17% 20% 5% 12% 10% 0% 0% Strongly Somewhat Somewhat Strongly agree agree disagree disagree / Agree / Disagree Yes No Don't know Sources: KPMG What Works Healthcare Insights global crowd sourcing community #5 What Works. There is an evidence base for patients creating value Many studies show that activated’ patients have better health outcomes at lower costs. Patients with lower activation scores cost 8% to 21% more. 2010 patient activation level Predicted per Ratio of predicted costs capita billed relative to level 4 Patient costs ($) Activation Measure (PAM) Level 1 (lowest) 966 1.21 Level 2 840 1.05 Level 3 783 0.97 Level 4 (highest) 799 1.00 www.kpmg.com/whatworks Source: Hibbard J H, Greene J, Overton V (2013) ‘Patients with lower activation associated with higher costs; delivery systems should know their patients’ “scores”.’ Health Affairs, 32, no (2013): 216-22. (Quoted in KPMG, ‘Creating new value with patients, carers and communities’) #5 There is an evidence base for patients creating value We have developed a 9-point maturity matrix to help assess 1. Work to create a progress: new culture Are there measurement systems to support this? 5 maturity level Patient experience and outcome data embedded in all performance management & governance 4 Patient experience and outcome data embedded in performance management of medical staff 2. Patient input into service design centreed on the patient culture 9. Are there measurement 5 systems to support this? 4 3 2 1 3. Systems to support shared decision making 4. Models support selfcare and help professionals adapt 3 Real time collection data used at front line for improvement 2 Systematic collection of data reported to boards 1 Recognition that the collection of data on patient experience and outcomes will provide a basis for understanding progress and analysis 5. Are patients’ assets mobilized? 8. Are the assets that communities can contribute mobilized? 7. Are patients involved in teaching and research? 6. Can patients get and use information? 0 No data on patient experience or outcome data collected Source: KPMG, ‘Creating new value with patients, carers and communities’ 2014 #5 There is an evidence base for patients creating value Source: All-Party Parliamentary Group on Global Health, ‘Patient empowerment: for better quality, more sustainable health services globally’ 2014 #6 The activist payer is emerging and pursuing value (but has some way to go) Global leaders expect payment systems to become more bundled and focused on value (with downward pressure on prices) “I expect to see...” 100% 93% 85% 90% Agree 80% Disagree 70% 60% 50% 40% 30% 20% 10% 7% 15% 0% Payment systems more bundled and focussed on value Price reductions and capping of volumes Sources: KPMG Global Healthcare Conference 2014, pre-conference survey #6 The activist payer is emerging and pursuing value (but has some way to go) But a majority agree that a short-term focus on costs is too transactional and not consistent with value and sustainable care “The pursuit of short-term cost reductions compromises clinical and operational effectiveness:” 42% 45% “My negotiations with my main payer / provider are focussed (mainly) on ...” 45% 40% 40% 35% 35% 28% 30% 38% 30% 25% 25% 17% 20% 20% 15% 11% 10% 5% 41% 15% 9% 10% 3% 13% 5% 0% 0% Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree Source: KPMG Global Healthcare Conference 2014, pre-conference survey Immediate concerns Short-to-medium-term for financial improvements to sustainability patient care Long-term considerations of higher-value Sustainable patient care Conclusions 1 Organisations and health systems are not aligned for sustainable transformation 2 People believe that integration is critical for improved health system sustainability 3 Patients, when empowered, will create more value 4 There is some distance between what patients want and what they get 5 There is an evidence base for patients creating value 6 The activist payer is emerging and pursuing value (but has some way to go) 7 Workforce is a worry. Optimism around leadership and technology. 10 global trends in healthcare reform Health Promotion Quality control and process flow Workforce Primary care & Accountable and value-based care care closer to home © 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25 10 global trends in healthcare reform Patient power Adapting to ageing Partnership, collaboration & consolidation eHealth transformation Staying Power © 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 26 10 global trends: (1) Health promotion - Nordics 9.6% GDP spend on health. 81 years life expectancy. Better outcomes Strengths of a long-term, comprehensive, regional approach and public/private balance Strong quality registries, joined up care, health promotion and local authority commissioning ‘Statist individualism’ approach has led to halving in smoking rates since 1980s, now one of lowest in the world Still, not perfect: 4% of Swedes and 6% Norwegians have problems paying copayments, and fragmentation an issue © 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 27 10 global trends: (2) Ensuring safe, reliable care Drive to ensure safe effective care and high reliability organisations Healthcare lacks industry-wide standards, as other global sectors that risk human life do. Four features of high reliability organisations Example: Geisinger’s ProvenCare model has transformed it and failing neighbouring providers into some of the best in the world 10 global trends: (3) Workforce 29% shortage of health professionals predicted by 2022 Five successful habits for improving workforce motivation and productivity: Strategic focus on value for patients Empowered professionals given responsibility Use of process redesign Steering on outcomes Active management of staff performance New types of services and new kinds of professionals are emerging Example: Buurtzorg provides community care through 8,000 nurses, no managers and a decentralized small-team structure 10 global trends: (4) Accountable and value-based care Systems around the world trying to shift from paying for activity/cost to paying for value/outcomes What it requires: Patients as partners: if you don’t have their outcomes in mind you’ll get lost Visible outcomes can be improved. Invisible ones can’t Define your position in the pathway and leverage performance through partners Centralize authority and decentralize decision making Your purchaser or contractor is your partner, not your enemy. Example: USA has a target to move 75% of care to value based payment by 2020 10 global trends: (5) Primary care & care closer to home Primary care is a critical part of transformation, yet its weakness means its capacity to do so is limited To better support changing patterns of disease and patient expectations, systems are: Looking to new models that support scale Increasing specialisms within primary care Investing in technology Trying to increase speed of access Four principles driving reform: access, patientcentredness, information and accountability Example: Clalit is a self-contained primary care-led system in Israel. Major investments in patient data systems and telemedicine 10 global trends: (6) Patient Power Low patient empowerment results in poorer outcomes, experience and use of resources Systems only scratching the surface in exploring potential of: Segmentation Patient and carer-led service design Shared decision making Maximising self-care and management Patient activation Community and peer delivered services ‘Activated’ patients cost 8 – 21% less Example: NHS in England introduced ‘friends and family test’ for 15% of all patients across all settings 10 global trends: (7) Adapting to ageing By 2050, number of over 60s globally will have doubled from today, to 2 billion No single breakthrough idea will address the growing ‘silver tsunami’ faced by developed societies Active involvement of citizens and the community in these changes will be key End of life care will be a vital area for research, innovation and improvement Breaking beyond the medical model towards integrated care and self-support Innovative ways of raising new public and private funds UK finds saving of £958 per patient for deaths at home instead of hospital Example: NUHS Singapore are developing primary, hospital and nursing home care integrated around the home 10 global trends: (8) eHealth transformation The case for eHealth is more compelling than ever, yet its performance has never been more mixed Top-down ‘push’ approaches have often resulted in expensive failures, but we are learning the importance of: ‘Pull’ strategies to encourage adoption The power of the crowd in healthcare The importance of data: the ‘I’ in IT Collaborative alignment between stakeholders Technology as a disruptor, not an add-on Meanwhile, advances in big data, telemedicine and data security. IHB is helping providers benchmark performance internationally Example: Birmingham University Hospital has developed a hospital benchmarking tool & real-time safety monitoring system 10 global trends: (9) Partnership, collaboration & consolidation Pace of mergers, acquisitions, partnerships, networks and alliances is booming Used to improve quality, build brand, coordinate care, find economies of scale and diffuse innovation A long history of failures, but quiet successes show several ways of getting it right The model is helpful but leadership is critical Requires long term strategy and planning A focus on quality works better than size or money The best alliances grow a series of wider missions Strong payer-provider alliances are a major asset Market conditions less influential than many think Example: German hospital chains Helios and Sana are expanding by strategically acquiring providers whose quality they can improve And the key ingredient for success is… Staying Power 65 healthcare leaders, 30 countries, 6 continents Factors in transformed organizations: Long term vision with sense of urgency Master tools that give them the edge Curiosity and enthusiasm for innovation Shared global themes of transformation : Empowering patients From organizations to systems of care Care in and closer to homes Out this Autumn. © 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 37 Out now: Paths to population health Eight practical steps for achieving coordinated and accountable care