Lowering Health Care Costs Is Hard Because Every Patient Is Unique

The value-based healthcare movement's effort to cut costs and improve healthcare outcomes doesn't realize that patients' conditions are rarely homogenous.

(Mike Lacon/flickr)

Perhaps a generation ago, medicine was rocked by the ascendancy of molecular biology, the idea that the answer to disease involved breaking it down to its “scraps and pieces” (to use J.S. Haldane’s phrase), its component molecular parts.

While the molecular revolution did change the way we look at health and disease, and has led to successes such as the beginnings of molecularly-targeted treatments for some cancers, progress has been far slower than most anticipated. The brash confidence of the early pioneers of molecular medicine has been replaced in most quarters by humility derived from years of frustration and disappointment.

“If we’re discovering drugs, the problem is that we just don’t know enough,” Roger Perlmutter, the newly-minted head of research and development at pharma giant Merck, told Forbes last week. “We really understand very little about human physiology. We don’t know how the machine works, so it’s not a surprise that when it’s broken, we don’t know how to fix it. The fact that we ever make a drug that gives favorable effects is a bloody miracle because it’s very difficult to understand what went wrong.”

Today, it feels like we’re on the cusp of a second, equally important revolution, driven by the same mixture of confidence and reductionism as the molecular revolution we’ve recently experienced: the effort to bring value to healthcare.

Troubled by the burden of healthcare expenditure in much the same way their predecessors were consumed by the fear of dreaded disease, many of today’s healthcare leaders are desperately seeking to bend the cost curve, primarily by trying to understand the ever-rising costs of care and the highly variable, cost-independent outcomes for patients.

Today, “value” in healthcare—the ratio of outcome to cost—is a focus of significant academic scholarship, featured in leading medical journals, and discussed routinely in departmental conferences and medical meetings.

Underneath this shift seems to be the near universal consensus that healthcare must eventually transition from a fee-for-service mindset, which rewards providers based on volume, to a value-based-care system, prizing high quality care, efficiently delivered. The challenge is getting there.

As Harvard Business School strategy professor Michael Porter and former chief medical officer of Partners Healthcare Thomas Lee—two influential leaders of the healthcare value movement—explain, “no participant in the system has good information about patient outcomes and the cost of care,” and without this information, it’s hard to improve.

In the same way lab scientists emphasize the challenge of treating disease without fully understanding its molecular underpinnings, today’s cost scientists highlight the need to better characterize what is driving healthcare value.

“The shocking truth,” Porter and Lee assert, “is that there are few data on the actual outcomes that matter to patients with specific conditions. Instead of recognizing that quality is determine by outcomes, providers tend to define quality on the basis of compliance with guidelines…and patient status as measured by a limited number of clinical indicators…which are incomplete predictors of outcomes but not actual outcomes themselves.”

Health information technology, according to Porter and Lee, has been of surprisingly little help thus far, focusing more on scheduling and revenue cycle management than tracking patients over the full care cycle and providing caregivers with comprehensive patient information. Not surprisingly, “automating broken service-delivery processes only gets you more efficient broken processes.”

The question now is whether the approach offered by the healthcare value movement—essentially, the granular dissection of inputs and outputs—will achieve the transformative change its leaders envision. or whether it will yield reams of publications and promising hypotheses, but struggle to impact real world patient care.

The conceptual approach advocated by Porter and Lee, for instance, suggests that healthcare providers should focus on the specific medical condition experienced by a patient. Care would be provided by “integrated practice units” (IPUs) consisting of clinical and non-clinical personnel who are interested not only in the disease itself but also “related conditions, complications, and circumstances that commonly occur along with it.” Care is both delivered and (importantly) evaluated based on the specific medical condition, permitting care teams to develop real expertise, and incentivizing them to pursue best practices.

Some patients clearly have a single predominant ailment, and for them this care approach seems to makes sense, and may already be showing results. Virginia Mason’s approach to back pain patients, for example, has apparently resulted in improved quality and reduced costs, and has actually produced greater revenue (at lower per-patient cost) through increased volume, a route to competitive advantage Porter and Lee believe can be replicated and motivate system-wide change.

Perhaps the hints of progress achieved by institutions like Virgina Mason will prove generalizable. However, it’s also hard not to wonder if the initial success stories may end up like some of molecular medicine’s early wins, where the ability to identify a specific genetic defect, for example, emboldened researchers to contemplate the possibility that human disease might soon yield to the force and logic of molecular biology. But that, obviously, didn’t happen.

Value scientists might be in for a rude awakening of their own. In their well-intentioned effort to make all of medicine measurable and quantifiable, to develop detailed metrics for outcome, to pursue the twin gods of productivity and efficiency, and to assign a dollar value to each square foot of clinic space and each minute of provider time, will value scientists ultimately capture or obscure what most patients seek from their physicians?

On the one hand, Porter and Lee clearly appreciate the primacy of the patient, observing “the only true measures of quality are the outcomes that matter to patients.” Yet, just how well will patients be served by the parsing of medicine into condition-focused IPUs? In the same way that disease is more than a collection of discrete molecular defects, patient care should involve more than just the integrative treatment of discrete medical conditions—as important a step as this is.

Who will be there to provide integrative care for the patient herself—the patient who has an array of medical conditions? What about the many patients who won’t sort neatly into a pre-specified category?

Many value experts are frustrated by these concerns, noting that “health care often gets paralyzed by concerns about meeting the needs of exceptions, thereby losing the opportunity to implement systems that meet the needs for the majority of patients, including patients with exceptional needs.”

Much as geneticists had originally, and incorrectly, hypothesized that most common diseases would be caused by a relatively small number of relatively common mutations, rather than by a large number of rare ones, value scientists working in medicine may similarly discover just how common “exceptional” patients can be. Even patients with ostensibly similar medical conditions are rarely as homogenous or as typical as textbooks, technologists, and management consultants tend to suggest.

Moreover, since the majority of healthcare costs are attributable to a tiny fraction of patients—patients who are often the most complex, and who may not suffer from a single condition—you could argue that the key to controlling costs is to focus on the exceptions, rather than deprioritize them.

Without question, today’s value scientists, like molecular biologists before them, bring an urgently needed perspective to medicine and to healthcare. But success will require more than the ambition and courage the value scientists have already demonstrated by their choice of problem; it will also require the ability to embrace the messiness of disease and the complexity of patients, rather than providing idealized solutions that impress in the boardroom but flop in the examination room.