Looking forward – March 2019

David B. Hoyt, MD, FACS

David B. Hoyt, MD, FACS

For a number of years, thought leaders in health care policy have been focused on the concept of value-based care, and the American College of Surgeons (ACS) has continually contributed to these discussions. In January, Frank G. Opelka, MD, FACS, Medical Director, Quality and Health Policy, ACS Division of Advocacy and Health Policy; Clifford Y. Ko, MD, MS, MSHS, Director, ACS Division of Research and Optimal Patient Care; and I had the opportunity to participate in a program at Harvard Business School’s Institute for Strategy and Competitiveness, Boston, MA. Leading the course was Michael E. Porter, PhD, who, with co-author Elizabeth Olmstead Teisberg, first brought forth the concept of value-based care in Redefining Health Care: Value-based Competition on Results.*

During the program, Dr. Porter offered several examples of how value-based care is already being applied in U.S. health care models. Interestingly, most of the case studies involved surgery, indicating that we as surgeons and the College as your representative organization already are on the leading edge of this movement. Implementing value-based health care will take a culture change across the entire health care system, but it is an achievable goal.

Creating value-based care

The reality is that most health care delivery models, not only in the U.S. but across high-income countries, have continued to make incremental changes to their payment and care delivery structures. The tendency over the last two decades has been to rely on siloed organizational structures, traditional management practices, and volume-based payment systems. Meanwhile, these practices and policies have failed to keep pace with advances in medical science and technology. In fact, value-based care has gotten lost in the complexity of the system and the pursuit of multiple goals, such as patient experience, safety, efficacy, access, research, and education and training. To transform health care, we need a single unifying goal that aligns all stakeholders.

That fundamental goal is to deliver high-value care to patients. Under the model that Dr. Porter has developed, value equals health outcomes that matter to patients divided by the costs of delivering these outcomes. The challenge before us, therefore, is to design a health care delivery system that substantially improves patient outcomes, both clinically and experientially, and that shifts competition to offering evidence that a course of treatment improves value.

Too often, we have focused on producing better outcomes at the hospital, care site, specialty, intervention, or broad patient population level. Dr. Porter posits that value is created in caring for each patient’s condition (acute or chronic) over the full cycle of care. His strategic agenda for creating value-based health care delivery comprises the following six interwoven components:

  • Reorganize care around integrated practice units (IPUs) tailored to specific patient conditions, such as congenital heart disease, breast cancer, obesity, and so on
  • Measure outcomes and costs for every patient
  • Move to value-based payment models with bundled payments for conditions
  • Integrate multi-site care delivery systems
  • Integrate care across geography to improve value
  • Build an enabling information technology platform

The ACS and our Fellows have been developing the processes and resources surgeons can use to implement the value agenda throughout the course of the organization’s 105-year history, guided by the ideal of serving all with skill and fidelity. We have been committed to the mission of safeguarding the care of the surgical patient and ensuring that surgical patients receive quality care in an optimal environment.


With respect to implementing the model that Dr. Porter and his colleagues have proposed, the College has long advocated that surgical patients should receive care from dedicated, multidisciplinary teams organized around a medical condition or group of closely related conditions over the full cycle of care. This approach is a cornerstone of the IPUs, which are really the building blocks of value-driven care. We take steps to ensure that patients receive the right care at the right location from the right health care professionals at the right time. We have a Patient Education Program that surgeons can use to help patients prepare for their operations and their postdischarge care. These tool kits, our Strong for Surgery program, and our collaboration with the Agency for Healthcare Research and Quality to develop pathways for Improving Surgical Care and Recovery encourage patients and their loved ones to be actively engaged members of the surgical care team—from the time of diagnosis to recovery.

At present, the ACS has standards for IPU-like programs in trauma, cancer, breast disease, bariatrics, pediatric surgery, and geriatric surgery. Others in development include vascular, thoracic, complex gastrointestinal, emergency, and rural surgery.

Outcome measurement

Another hallmark of value-based care is measuring outcomes. The College has endorsed this concept since its inception. To this end, we developed four guiding principles of continuous quality improvement:

  • Set standards of care that can be individualized by patient and that are backed by research
  • Establish the right infrastructure with appropriate staffing levels, mix of specialists, equipment, and use of checklists
  • Collect and analyze rigorous data that is drawn from medical charts, backed by research, derived from postdischarge outcomes, and continuously updated
  • Verify that quality care is being delivered through external peer review

In 2017, we pulled all of these pieces together in one book, Optimal Resources for Surgical Quality and Safety(also known as the Red Book), which walks providers through the five stages of surgical care, peer review, credentialing, team-based care and the factors that affect it, data collection and analysis, and much more. It also points surgeons and their institutions toward the resources that the ACS, government agencies, and other stakeholders offer to help ensure they are delivering highly reliable, patient-centered care. Perhaps the most well-known and farthest reaching ACS outcome measurement program is the ACS National Surgical Quality Improvement Program, which departments of surgery use to determine their greatest strengths and weaknesses and to arrive at solutions that lead to better outcomes.

It is important in building a value-based system to measure outcome from not only the clinical perspective, but also from the patient’s point of view. Did the outcome improve function and quality of life, eliminate pain, and enhance productivity? Did it meet the patient’s expectations? Patient Reported Outcomes Measures (PROMs) are being integrated into data collection for the College’s registries, which are being combined into a single platform for simplified use and better data amalgamation.

Cost measurement

In addition to measuring outcomes, Dr. Porter calls for measuring the actual costs of care for each patient—not just the sum of charges billed or collected. More specifically, cost should be measured over the full cycle of care for the individual patient and should account for the use of resources involved in a patient’s care (personnel, facilities, supplies, support services, and so on). Ultimately, Dr. Porter recommends the use of bundled payments—a concept familiar to most surgeons. Using the bundled payment model, a single risk-adjustment payment is provided for the overall care of a condition, covering the full set of services needed over an acute care cycle or a defined period of time and using real cost data and appropriate margins to determine price. This alternative payment model gives the individual surgeon control over downside risk and any potential upside margin. The College is developing and proposing payment bundles for surgical services not yet covered under the 60-day and 90-day global fee.

Other elements of value-based care

Delivery of value-based care also will be dependent on shifting from a confederation of standalone units and facilities to a clinically integrated system that concentrates, allocates, and integrates care across appropriate sites. More specifically, in mature, integrated health care institutions, each care delivery site focuses on providing a defined scope of services, partnering with sites—often on the same campus or at least nearby—to provide other services. The idea is to deliver the right service in the right location based on acuity level and resources while easing patient access to repetitive services. Care would be integrated across sites using an IPU structure.

Under the traditional care geography model, care is organized around specialties and interventions for each site, resulting in duplication of services. Value-based care geography models organize care by condition in IPUs, which serve as the hubs of service delivery, building systems for teams to direct patients to the most appropriate site.

For these elements to work effectively, we will need to create what Dr. Porter calls an enabling information technology platform that combines all types of data for each patient across the full care cycle. Electronic health records (EHRs) would need to be fully interoperable within and across networks, referring clinicians, and health plans, and make cost data shared and transparent.

Our responsibility

As surgeons, we are familiar with leading multidisciplinary teams and are becoming increasingly aware of our role in each phase of surgical care, from diagnosis with a chronic or acute condition that requires surgical care through postdischarge recovery.

As your representative organization, the ACS has developed sound processes for measuring and benchmarking outcomes for individual surgeons and health care institutions and is looking at ways to incorporate PROMs into registries. The ACS has worked with payors to develop payment structures that focus on outcomes over the cycle of care rather than volume and that use clinical rather than administrative records to determine merit-based pay. The ACS and its members are working with leaders of our health care institutions and systems, as well as policymakers and lawmakers, to advocate for restructuring how and where health care is delivered to integrate services and add value. The ACS also is working with businesses and the government to improve the interoperability of the EHR.

The ACS views creating a value-based health care system as a key objective in fulfilling the organization’s overarching mission. We are taking this message to thought leaders like Dr. Porter and his colleagues, to policymakers and lawmakers, and to the leaders of our health care institutions. We are communicating this message through a new initiative that launched with a video in fall 2018, Through the Eyes of a Surgeon. We want to hear and share your success stories in providing value-based care to your patients. With your insights, we will find a better way to deliver health care services to those whom we value most—our patients.

If you have comments or suggestions about this or other issues, please send them to Dr. Hoyt at lookingforward@facs.org.

*Porter ME, Teisberg EO. Redefining Healthcare: Value-based Competition on Results. Boston, MA: Harvard Business School Press; 2006.

American College of Surgeons. Optimal Resources for Surgical Quality and Safety. Available at: www.facs.org/quality-programs/about/optimal-resources-manual. Accessed February 7, 2019.


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