Making value-based care happen in Canada
There is much we can learn from our peers, but a lot needs to change to shift our focus from volume to value
“Value is defined as the health outcomes achieved that matter to patients relative to the cost of achieving those outcomes.”
When Michael Porter and Elizabeth Olmsted Teisberg authored what is effectively the bible of value-based care back in 2006, a new and necessary lens was applied to how we deliver and fund healthcare services.
Since then, we’ve seen a lot of action in the broadly-defined area of value-based care. It has by no means been a purely smooth and positive journey — in fact, some would argue it has thus far been a large and expensive distraction — but there have been pockets of excellence that keep us all (or maybe just the CMS Innovation Centre) coming back for more.
I am a huge believer in the concept of value-based care because, in theory, it reinforces much of what I think is critical to designing, delivering, and funding a high-quality health system:
It forces you to explicitly identify what metrics matter most to patients, and rigorously build a culture around doing well against those metrics;
It moves systems away from pure fee-for-service (FFS) models and properly aligns financial incentives for all parties — patients, providers, payers, and even vendors; and
It requires the effective and sustainable deployment of technology to support information sharing across organizational borders and the achievement of clinical goals.
I don’t always read about healthcare, but when I do, I find myself gravitating towards articles on the promises and pitfalls of value-based care. And as part of this weird and nerdy hobby, there are definitely some commonalities amongst the models/programs that have found some semblance of success. Unfortunately for us, these examples largely come from outside of Canada, and doubly unfortunate for us, our Canadian health systems are heavily lacking across these commonalities.
Below is a semi-deep-dive into some noteworthy ingredients that seemingly make for a successful value-based program/system, and what the delta looks like when compared to what we currently practice in the Great White North.
1. Patient-centred and provider-led
Successful value-based programs put the patient at the middle and design everything around patient goals and priorities. A truly patient-centric value-based program will establish performance metrics at the very beginning that are jointly created alongside patient representatives so that the behaviours being measured, evaluated, and incentivized are built around what is important to the patient, not just the system.
Once you have established patient-centric goals, it is essential that providers have a leadership role in how a program is delivered and governed. A 2019 analysis of a large value-based program in the US looked at over 500 accountable care organizations (ACOs) and found that ACOs that were physician-led produced almost 7x the amount of savings per patient when compared to ACOs that were hospital-led. This is not an insignificant number, and although this is only from one program, I think it shines light on a broader trend that you need to look beyond the walls of a hospital (or government agency) for system-level leadership, and if you equip providers with the tools and autonomy to sit at this type of table in a meaningful way, everyone wins.
Canada’s Grade: D+
We have been preaching patient-centricity in this country for years, but at best, we practice a patient-informed system. Lots of patient/family advisory councils have been formed to incorporate more of the patient’s voice into strategic planning discussions, but this is still largely performative and when you look at how care pathways and clinical programs are developed, they are largely made in a top-down, medicalized way.
When it comes to being provider-led, we are a system that is becoming increasingly driven by administration, and non-clinical administration at that. I don’t mean to shit on hospital CEOs or other senior leaders that don’t have a clinical background, but it is a bit rich to constantly hear about our shortage of physicians and nurses due to burnout, while Ontario Health seems to be creating a new high-paying Director/Sr. Director/VP administration job every week. If you need concrete evidence of bureaucratic bloat in this country, between February 2020 and July 2022, net job creation in Canada was only 0.4% in the private sector, compared to 9.4% in the government sector.
Some provinces do a better job than others, but we need a culture that creates more opportunity and empowers providers to play a strategic system-level role, as opposed to their current role where they are largely helpless recipients of whatever policy-du-jour is coming from the government in power.
2. Alternative payment models for providers
We’ve long known that FFS is a flawed way to pay providers and in hopes of slowly moving folks away from it, successful value-based programs always include some form of alternative payment. To state the obvious, a thoroughbred FFS model will never be value-based, because payment is retroactive and based on the delivery of a service, not the outcome; so volume is incentivized, not value.
At a minimum, successful value-based programs layer some pay-for-performance elements on top of FFS, but some shift the paradigm entirely and move to a prospective payment methodology. Kaiser Permanente (KP) is often cited as an exemplary model of an integrated health system and when you look at how they are structured, all of their physicians are salaried with the opportunity for some pay-for-performance bonuses. Not to say this is the ideal model, but if one of the highest performing health systems on earth (that happens to exist in the most competitive, market-oriented jurisdiction on earth as well) can leverage a prospective payment model for primary care providers and specialists, why can’t we?
Dr. Bob Bell, former UHN CEO and Deputy Minister of Health in Ontario, wrote a great article on KP a few years ago evaluating the feasibility of adapting some of what they do to the Ontario context. I agree with much of his analysis, but at one point, he writes the following:
It is unlikely that doctors in Ontario would readily agree to a Kaiser model of capitation without substantial increases in pay and benefits possibly including pension benefits. It is not clear whether physicians would generally accept a Kaiser compensation model … and very unlikely that the province could afford the model.
Why wouldn’t Ontario (or other Canadian) doctors agree to this? Maybe aside from a few specialists that are making absolute BANK, physicians I’ve spoken to are almost universally against our current FFS system and would welcome a model that has more predictability to it.
And why couldn’t we afford the model? Dr. Bell calls out that the KP model is too expensive ($6,533 USD per capita in KP versus $3,264 USD per capita in Ontario at the time of his post). Yes, at face value, KP’s system is way more expensive, however, I think the more important takeaway is that according to his own numbers, KP’s health system is actually significantly less expensive when compared to the rest of the US (per capita costs in the US were just under $12,000 USD in 2020). To me, that says KP has potentially found a way to deliver high-quality care at a lower cost in a jurisdiction where this is next to impossible. And they have moved away from a volume-driven system and physician payment model in the process.
Canada Grade: C
We have some capitated primary care providers and salaried physicians throughout the country, but FFS is still the overwhelming majority and as such, we are still a volume-driven system. I’m going to do a whole other post on reimagining provider reimbursement because it fascinates me, but the crux of the problem in Canada is this: if Doctor A does surgeries on 10 patients and 5 of them end up with life-threatening complications, they will get paid the exact same as Doctor B who also did 10 surgeries, but with zero complications. At least to me, that is problematic.
I’m not saying FFS needs to be fully abolished in Canada as I think there is validity to incentivizing a base level of activity, but it can’t be the primary (and in many cases, only) driver of provider payment — and I think that stance holds true regardless of the speciality.
3. Integrated health record
If you were to run a million simulations on how the EMR market would evolve from its inception to today, it wouldn’t be a hot take to say our current state would be amongst the worst-case scenarios. The major players in today’s market were initially built to optimize billings, not patient care (and we are still dealing with the pains associated with that today); they are constantly cited as a major cause for burnout amongst clinical and administrative users; they are prohibitively expensive; and the different systems don’t talk to each other unless they are absolutely forced to. Put that all together and it is no wonder why we still heavily rely upon fax machines and our healthcare siloes are as strong as ever.
However, in spite of these fundamental flaws, it is still possible to cobble together a serviceable integrated health record with enough top-to-bottom buy-in and political will. There are a few ways of doing this, but at a high-level, there are two main avenues:
Using a single system/vendor across the entire continuum of care within a jurisdiction/health system; or
Allowing different organizations to use whatever system they want, as long as they adhere to a robust set of standards that enable information to seamlessly and securely flow between them.
Our aforementioned friends over at KP have opted for #1, through their Epic-based KP HealthConnect. To their credit, they have seen great benefits with this system, but a major lesson learned from their implementation isn’t necessarily the vendor or single-solution route they went, but the fact that they fully committed to its implementation for over half a decade, and have stayed fully committed to constantly improving it since its initial go-live was completed in 2005. From day one through to today, KP HealthConnect has never been an IT initiative; it has been positioned as a transformational platform to better position KP to pursue its clinical, operational, and financial goals, which is why it has had such a positive impact across the enterprise.
Having an integrated health record — like KP HealthConnect — allows you to create and work from a standard data model, which in turn enables streamlined workflows and transitions of care, exceptional reporting and analytical capabilities, and better ways to engage and manage patients remotely — all of which are absolutely critical for delivering effective value-based programming.
Canada Grade: F
Although some political folk may say otherwise, there are no examples of a working, fully integrated health record at scale in our country. Alberta might be the closest as they are currently in the pursuit of option #1 from above, creating their own KP HealthConnect-esque integrated health record with a provincial deployment of Epic called Care Connect; however, Care Connect already has a major gap as it doesn’t include primary care due to the Primary Care Networks in Alberta not being part of Alberta Health Service’s portfolio. As such, even when Care Connect is fully rolled out, all of the primary care practices across the province will still be operating with whatever EMR system they have (for now), which could create major holes in the vision for a truly integrated health record.
In a definitely not-by-design way, many other provinces have opted for option #2, letting healthcare organizations procure what they want for years and are now trying to insert connective tissue across organizations to create some semblance of integration. To put it gently, this is very much so a work in progress.
Collectively as a country, we are unfortunately still very far away from realizing any of the potential that is unlocked via a well-designed, well-utilized integrated health record.
4. A continuous willingness to challenge norms
Beyond the realm of value-based care (or healthcare in general), a common trait of any high-performing organization is an ethos of innovation. Even in the good times, the most successful team or organization is always looking to find a better way of doing things. At a system-level, this mindset is generally absent in healthcare, as “because that’s how we’ve always done it” is a response that we all hear far-too-often.
Shifting to value-based care requires a culture that is built on constantly challenging the status quo, which goes against the historical make-up of healthcare. Although challenging and awkward, some organizations are successfully making this shift.
In 2010, Cleveland Clinic started implementing team-based care. Still fairly novel today, 10+ years ago, the idea of incorporating roles like primary care coordinators, transitional care management hub caregivers, and population health medical assistants into your core primary care delivery model was virtually unheard of, and as a result, risky. How would patients respond to not always talking with a physician? How would physicians respond to a significant change in practice style? How is Cleveland Clinic going to pay for all these extra people? With some bumps along the way, Cleveland Clinic found out that patients care more about how they are treated versus who is treating them, physicians want to focus more on the parts of the job they enjoy most, and team-based care increases productivity and reduces burnout and turnover, making the model financially advantageous as well.
Since then, Cleveland Clinic has rolled out their “team of teams” culture to a number of clinical areas, and it also has formed the base of the value-based programs they are enrolled in, namely the Medicare Shared Savings Program where they currently participate in a two-sided risk model (an advanced value-based model where providers can both earn and lose money based on performance). Had they never challenged the status quo, they would’ve never deployed a care model that has allowed them to achieve industry-leading quality scores, improvements in patient and provider experience, and millions of dollars in savings.
Canada Grade: F
Unfortunately, and as I called out in my last post, people in Canadian healthcare are great at writing about what’s wrong, but terrible at changing what’s wrong. We love to talk about challenging the norms, as long as someone else is cool with actually doing it. Since I started my career, I’ve heard a lot about what needs to change (i.e., less FFS, less hospital-centric, more team-based care, better technology) and quite frankly, none of it has. Aside from virtual care — which we have a global pandemic to thank for, not our own volition — our healthcare system at its core has remained largely unchanged since the early 2000s, and if anything it has gotten notably worse in several areas. A willingness to challenge norms needs to come from the top, be encouraged at all levels of the system, and persist beyond our election cycles; none of this is happening today.
As evidenced by my incredibly rigorous, detailed, and evidence-based report card (sarcasm), a lot needs to change.
The good news for us: value-based care is still in its relative infancy everywhere.
The bad news for us: we are still somehow very far behind.
But our delayed development in this area gives us the advantage of being able to learn from the experiences of our peers to avoid some growing pains in our own value-based care journey.
The common success factors I outlined above are definitely starting to regularly emerge in the literature, and I think with the overwhelming amount of criticism being thrown at our health system on a daily basis, there has never been more universal buy-in and need to shake things up in a big way; a meaningful pivot towards value-based care requires just that, and might be the big shake we all need.