Healthcare’s Path Forward: Delivering Value-Based Health Systems

Personally, the most interesting talk at the 90th HealthAchieve Conference in Toronto was Professor Michael E. Porter‘s session on delivering value-based health systems.

Porter argues that first and foremost, there needs to be a common understanding of what constitutes as success, and that Value for Patients needs to become the common denominator for all stakeholders across the care continuum. He defines Value for Patients as the following mathematical equation:

Value = Health outcomes that matter for patient/cost of delivering outcomes

The above formula is patient-centric right off the bat. The numerator will necessitate incorporating patient reported outcome measures (PROMs) as part of the value measurement (i.e. outcomes that matter to a patient).

Porter stated that there is a clear and evidence-based path to move forward in healthcare, which will address the challenges such as rising costs, better quality, and better results for patients. Porter lists the following six essential steps to deliver value-based health systems:

  • Integrated Practice Units (IPUs)
  • Measuring value
  • Bundled Payments for care cycles
  • Integrating care delivery systems
  • Expanding geographic reach
  • Need for the right IT platform

In this post, I’ll touch up on IPUs and share with you some resources I found online.

Integrated Practice Units (IPUs)

Porter argues that it is impossible to achieve value with the current way that healthcare structured. The current model is a matrix-model where patients move from one care setting to the next . He argues that this “ping-pong” approach to providing health care doesn’t lend itself to obtaining value, because it is a sequential process rather than a parallel process. In a sequential model, administrative tasks can become hurdles in delivering “value”. He further argues that this disjointed model doesn’t connect the patient with the right person. What does he mean? Let’s say for example that the condition in question is severe migraines. While neurologists are very skilled in dealing with multiple issues, migraines may not be every clinician’s interest. He argues that getting the right conditions matched with the “interested” clinicians can allow for clinicians and other allied health professionals to develop a high value care delivery model.


Image Source: Porter, Michael E., Clemens Guth, and Elisa Dannemiller, The West German Headache Center: Integrated Migraine Care, Harvard Business School Case 9-707-559, September 13, 2007

He argues that the shift needs to move from clinical specialty to condition-based treatment. Also, an IPU would take ownership of the condition across the full cycle of care (inpatient + outpatient). If this is not possible due to limited resources, it can be accomplished by the means of having affiliations with partner-sites that complement provided services, which revolve around the condition and not speciality. Having IPUs in place lends itself to having higher volume of patients, which is a critical component for the possibility of attaining value.

Here are some additional articles for your reading pleasure: The Big Idea: How to Solve the Cost Crisis in Health Care & The Strategy That Will Fix Health Care. I also found a recent copy of a slide deck used by Professor Porter.

Happy reading!