Patient power

Industry Report Health Care Providers

By William N. Higbie

Few industries are as fragmented and in need ofreform as health care. But with their emphasis on connected health care, a small group of high-performance providers is revolutionizing the wayquality health care can be delivered.

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Health care spending already con-sumes nearly 10 percent of the GDPof most rich nations—and thispercentage, by all projections, willcontinue to grow. While there havebeen many improvements during thepast 30 years—including increasinglife expectancy and decreasinginfant mortality—health care costscontinue to outpace inflation. We’reall living longer, and over-65s costthree to four times as much to treatas younger patients. What’s more,the disparity in medical costsbetween the older, health care-consuming public and youngertaxpayers is widening as babyboomers approach old age.

But skyrocketing costs are only partof the picture. Access to health careis suboptimal from Boston to Bris-bane. In Western Europe, despiterecord amounts of governmenthealth care funding, waiting lists for some types of nonemergencysurgery—hip and knee replacementsand cataract removals, for example—stubbornly refuse to shrink. In partsof Asia, the number of patients inemergency rooms who experiencelong waits for admission has swelledsignificantly. In the United States,where 45 million people are unin-sured, more than half of low-wageearners lack health insurance

because they fall into the gapbetween a private system that pri-marily covers corporate employeesand a public system focused on the elderly and the indigent.

The funding and delivery models of developed countries’ health caresystems vary enormously. TheUnited States is, for the most part,a private market. Elsewhere, healthcare services are largely publiclyowned and funded, primarilythrough taxation (in countries likeCanada, Britain and Sweden, forinstance) or compulsory contribu-tions (in Germany, France andthe Netherlands).

Yet the quality of care in almost allmodern health systems is declining.Historically, modern medical carehas been organized and delivered insilos based on profession, specialtyand location. Look under the coversof most modern hospitals today andyou will find byzantine complexi-ties. For example, in one Australianhospital it takes 107 separate stepsand 11 different people to book andmanage an outpatient consultation,and 65 steps and 10 people toconduct a routine chest X-ray.

Funding models based on individualpatient-clinician interactions only

Industry Report Health Care Providers

Pick up a newspaper or magazine almost anywhere in thedeveloped world and the message is the same: Health carecosts are soaring while the quality of care and access to services is moving in the opposite direction. The situation isindeed alarming—but not everywhere. Through Accenture’scontinuing research into the industry-specific attributes ofhigh-performance business, we have uncovered some healthcare providers that significantly outperform their peers. Theirapproach to health care delivery may offer some lessons toother providers—and, if adopted, it could eventually helpease the looming crisis.

“Outcomes” are a weighted basket of quality, accessand satisfaction indicators measured across six key

delivery channels to deliver social or patient value:

PreventionPre-emptionAcute illnessTransitionChronic and continuing careInsight

Lower-performingproviders

Higher-performingproviders

Cost effectiveness = (annual expenditures + depreciation - capital expenditures) / admission

Hypothesis: Greater value is created throughgenerating improved social/patient outcomesin a more cost-effective manner

Cost-effectiveness

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The Accenture Health Care Provider Value Model

About the research

Defining high performance for health care providers is fraught with difficulty. Differingfunding regimes and delivery models make international comparisons a significantchallenge (see story).

However, an extensive survey of leaders in the Accenture Providers & GovernmentHealth operating group in North America, Europe and Asia has helped us isolatesome key market trends. On the basis of these findings, we have developed an eval-uation model that cross-references health outcomes (factors such as quality, accessand satisfaction) with cost-effectiveness, and provides the basis for comparison and tracking over time. We are now pursuing a more extensive global study of highperformers using this model.

Health systems that provide better patient outcomes (in terms of quality access andservice) in a more cost-effective manner create value in this industry. Overall out-comes are a weighted basket of indicators. Cost-effectiveness is defined as annualexpenditures plus depreciation, minus capital expenditures.

serve to reinforce the complexity.Services are poorly integrated, andpatient information is not widelyshared. Breakdowns in communica-tion are common, particularly whena patient is handed from one caresetting to the next. The upshot:confusion, frustration and delaysfor both patients and care providers.

Indeed, few industries are so frag-mented. And reform remains elusive,which makes the handful of providersthat Accenture characterizes as highperformers all the more noteworthy.

Because of all these factors, identify-ing the high performers in this sectoris also an exercise in complexity.Health care is one of the few indus-tries that defy Accenture’s standardperformance measurement metrics,which in the past we have succes-sively applied to industries as diverseas banking, utilities, chemicals andretail hypermarkets. The health careindustry varies so much from coun-try to country that it is not easy to

make international comparisons,although we have created some met-rics that offer meaningful insights(see “About the research,” page 11).Thus far, our research strongly sug-gests that high performance in thissector is best defined in terms ofhow well providers handle theintricate handoffs of an extended“patient journey.”

That journey begins, of course, withdisease prevention and staying well.But it also encompasses the provi-sion of primary care services, themanagement of acute illness and the transition through rehabilitationto recovery. While the concept of“patient-centricity” is not new, rela-tively few provider organizations—Vanderbilt University Medical Centerin the United States, NSW Health in Australia and LBK in Europe arenotable exceptions (see case stud-ies)—have successfully adopted thisholistic approach to health care provision, an approach with thepatient at its core.

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NSW Health: Unblocking access

Australia’s NSW Health, one of the world’s largest health careproviders, serves more than 6.6 million people in New SouthWales, the country’s most populous state. NSW Health has abudget of nearly $10 billion, and it employs about 90,000 people.

Until recently, however, this health care giant was suffering aserious case of so-called access block. The percentage of patientsadmitted through emergency who then had to wait longer thaneight hours for a hospital bed was steadily increasing. In some ofNSW Health’s Sydney hospitals, access block exceeded 50 per-cent—well above the state department of health’s target of 20percent. And the swelling numbers were affecting other metrics,like ambulance to emergency handover times, elective surgerycancellations and inpatient bed utilization.

In May 2004, NSW Health embarked on an aggressive reformprogram designed to reengineer the flow of patients acrossthe entire system: from the community through emergencydepartments, inpatient wards, transitional care facilities andback to the community.

Organizational excellence and end-to-end patient flow manage-

ment—both core capabilities that distinguish high performers (seestory)—drove NSW Health’s success in this reform endeavor. Theprovider’s strengths in program governance, performance man-agement and accountability, coupled with a broad and participa-tory approach to solutions development, created sustainableapproaches that boosted patient flow management and signifi-cantly improved patient access.

Among other measures, NSW Health has set up special patientflow units that are supported by time management benchmarksto drive accountability. It has also introduced key performanceindicator “dashboards” to provide immediate views of such crit-ical patient flow data as bed availability, planned admissionsand patients waiting in emergency. By adopting regular bed andservice reconfiguration planning, it has better aligned deliveryresources with demand. And a new focus on individual patientjourneys means specific protocols or models of care for specificpatient populations.

The upshot: Access block already has been reduced in 7 of the 10hospitals targeted. So has the average length of inpatient stayacross a range of sites and clinical specialties.

Too often, reform efforts focus onspecific episodes or professionalspecialties, reinforcing fragmenta-tion within the system. The chal-lenge is to systematize the entirepatient journey, creating a frame-work for “connected health care.”New business and technology sys-tems can better connect the overallflow, enabling innovative patientcare models that pre-emptively target disease. In addition, these models can provide a level of management insight that betterinforms operating decisions, serviceintegration and strategic investment.Within this framework we see theemergence of high-performancecharacteristics that are shapingsolutions for the future.

High performers’ commitment topatient-centric health care rests on their mastery of four core capabilities. These capabilities areclearly interconnected, and theywork together to support the variousstages of the patient journey.

Pre-emptive care models aredesigned, in the first instance, to pro-mote wellness and self-management,reducing the demand for more costlyacute services. Key target populationsare typically, but not exclusively, thechronically ill. Pre-emption involvesproactively identifying high-riskpatient sectors and customizing pre-emptive interventions and support to help patients and their familiesself-manage treatment at home or in a low-cost environment. The UKNational Health Service, for exam-ple, runs breast and cervical cancerscreening services and vaccinationand smoking cessation programs that are administered and deliveredlocally, in the community.

High performers distinguish them-selves through the sophisticated use of analytical profiling forchronically ill and at-risk popula-tions, supported by coordinatedcare teams, contact centers andcase management tools. They havefound ways to shape their organi-

Outlook 2005, Number 3 13

LBK: Systematizing the patient journey

Landesbetrieb Krankenhäuser Hamburg (LBK) is one of thelargest public health providers in Germany. It owns sevenhospitals with a total of more than 5,000 beds. Within itsjurisdiction—the city and state of Hamburg—it controls abouthalf the market for acute care. (The company was recentlyacquired by Asklepios, which currently owns 49 percent and is providing management, with an option to increase up to 75percent. LBK is now incorporated, although not publicly traded.)

Yet like the users of so many health services worldwide, LBK’s patients have suffered the consequences of a frag-mented, silo-driven system of care provision, characterized by poorly integrated services and uncoordinated access toinformation (see story). Large numbers of different depart-ments and medical specialties, coupled with the prevalence of an “it’s not my job” mentality, have meant lengthy waitingtimes for medical appointments, hospital admissions and labtest results. No longer.

LBK has embarked on a systemwide transformation processthat has involved establishing patient-focused care centers,reengineering clinical processes and teams, and setting up

performance management principles that make the staffaccountable for results.

The transformation is still under way, but already LBK hasrealized savings, improved bed and operating theater utilization and significantly reduced patient waiting times. In specific areas like logistics and finance, it has alreadyreduced costs by 20 percent to 25 percent. As a result ofthese successes, it has moved into the next phase of itstransformation and is becoming one of the first public hospital groups to begin privatization by merging its oper-ations with one of the biggest private hospital groups in Germany. (For more on LBK, see “LBK Hamburg meets themarket,” Outlook, January 2000.)

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zation and funding models to enableintegrated care and focused cam-paign management that delay oravoid the onset of acute illness.

Integrated clinical informationarchitectures are essential to manag-ing the patient journey effectivelyand establishing the systemwidetechnological infrastructure neces-sary for sustainable reform. Themost prominent example of thistrend is the emergence of electronichealth record (EHR) platforms thatconnect and integrate a variety of legacy systems by setting upsystemwide sources of clinical datathat can be shared across the carecontinuum. A number of countriesacross Europe, North America andAsia are undertaking countrywidehealth information infrastructureprograms, including Connecting for Health in the United Kingdom,the Canada Health Infoway, the US National Health InformationNetwork and HealthConnect in Australia.

At Vanderbilt University MedicalCenter, for instance, EHR platformsform the core of an applied informa-tion technology that supports andaccelerates frontline clinical decisionmaking. The best organizations haveextended the use of traditional clini-cal applications, like results report-ing and order management, intomore sophisticated approaches thatstandardize care and eliminate thesignificant variations in clinicalpractice. High performers have usedchange management methodologiesto develop technologies that clini-cians want to use because they fitseamlessly into existing workflows.

End-to-end patient flow anddemand management, right acrossthe patient journey, is a hallmark ofhigh performance in this industry. Itdescribes the ability to integrate andcoordinate a range of clinicians andother staff, as well as communitycaregivers, across the complete carecontinuum. High-performanceproviders establish special units to

Vanderbilt University Medical Center: Integrated clinical information architectures

More than 1 million people pass through Vanderbilt UniversityMedical Center’s 95 outpatient and 36 inpatient departmentsevery year. From cancer treatment to neonatal care, its clinicsrank among the best in the United States. Until recently, how-ever, clinicians at this Nashville, Tennessee–based health careprovider were having a hard time keeping track of individualpatient journeys (see story).

Vanderbilt’s clinics relied on paper records, and if an individualpatient’s files went astray, no one—including that patient’s primary care physician—had access to the complete medicalhistory necessary for making frontline clinical decisions. Vander-bilt executives recognized the urgent need for more complete,integrated and, above all, accessible information about itsrapidly growing patient body.

What was required was a very special information architecturethat would aggregate data about individual patients from a multitude of sources and then align it with clinicians’ workflows.To ensure continuity of quality care, the architecture would have to integrate not only basic information about lab tests and prescriptions but also clinicians’ notes and communications

between doctors and patients. At the same time, the architectureneeded to help the clinician draw on data about the most up-to-date standards of care and best practices. What’s more,it would have to make this comprehensive electronic healthrecord accessible to doctors working in multiple locations.

It took five years to develop the right architecture, but the resultshave been so successful that Vanderbilt is now an internationalleader in applying IT to support and accelerate clinical decisionmaking. The architecture allows physicians to access informa-tion about both their individual patients and different patientgroups, from wherever the physicians may be located, and to do so with the kind of security that health care demands. Thetechnology has also saved Vanderbilt an estimated $3.5 millionannually in clerical services and transcription costs. Moreover,using decision-support tools, the system has trimmed redundantand unnecessary medical care and reduced ordering errors.

The same technology is already being used in a pilot data-sharing project to improve health care delivery across much ofthe state of Tennessee. And later this year, Vanderbilt is spinningoff a separate subsidiary to sell its technology worldwide.

manage the patient transfer processand to monitor the flow of patientsbetween the services and facilitiesthat mark the patient journey. BothLBK Hamburg and NSW Health, forinstance, have set up special patientflow units that are supported bytime management benchmarks todrive accountability.

High performers develop moresophisticated scheduling andstaffing systems that can moreclosely match health system supplywith patient demand. As a result,patients have to spend less time on waiting lists or in emergencyrooms waiting for hospital beds,they can be discharged more quicklyto post-acute services, and readmis-sion rates are reduced.

Managerial insight and organiza-tional excellence is a combination of strong change leadership, robust governance structures andperformance management principlesthat align accountability for out-comes. These capabilities underpinall the others.

High performers begin with a dedi-cation to the data and the courageto promote transparency in makingtough management decisions. Theyestablish a culture of continuousimprovement, and they support thatculture with responsive systems fortracking patient flow, clinical qual-ity and key cost indicators. Theypush this information out to front-line caregivers and empower newmanagement structures to shapemore responsive solutions.

The patient-centric approach at theheart of all these capabilities is thekey to health care reform. Patient-centered isn’t just a catchy politicalmantra. Given the scale of challengesfacing providers, it’s fast becoming

a necessity. By instituting reformsthat reshape and connect servicesaround the entire patient journey,health systems (both public and pri-vate) are providing better access andquality for a given level of invest-ment. Over time, these changes willreset the standard for health systemsglobally and guide the broader trans-formation of this industry.

About the authorWilliam N. Higbie is the lead partnerof the Accenture Health & LifeSciences industry group for the AsiaPacific region. Mr. Higbie, who has 20 years of health industry consultingexperience, has an extensive back-ground in operations reengineering, IT systems consulting and strategicplanning to major health organizationsacross Asia, Europe and the UnitedStates. He is based in Melbourne.

bill.higbie@accenture.com

Outlook 2005, Number 3 15

Satisfaction with health systems, 1999

Austria 31.4 52.0 83.4 11.9 2.2 14.1

Belgium 15.8 61.2 77.0 16.9 4.0 20.9

Denmark 30.7 45.1 75.8 20.1 3.8 23.9

Finland 18.0 56.3 74.3 22.1 2.6 24.7

France 16.0 62.2 78.2 16.7 4.4 21.1

Germany 7.4 42.5 49.9 35.5 12.2 47.7

Greece 2.9 15.7 18.6 45.7 34.1 79.8

Ireland 11.4 36.3 47.7 26.9 20.3 47.2

Italy 2.1 24.2 26.3 45.6 26.2 71.8

Luxembourg 26.0 45.6 71.6 16.8 5.1 21.9

Netherlands 19.0 54.2 73.2 21.9 4.1 26.0

Portugal 3.1 21.0 24.1 42.4 31.7 74.1

Spain 9.6 38.0 47.6 40.6 9.3 49.9

Sweden 13.5 45.2 58.7 29.6 9.3 38.9

United Kingdom 13.0 42.7 55.7 31.8 10.5 42.3

European Union + 10.6 42.2 52.8 32.5 12.7 45.2(15-country average)

All countries average ++ 14.7 42.8 57.5 28.3 12.0 40.3

Standard deviation 9.3 14.0 21.4 11.4 10.8 21.4

+ Weighted average by population++ Unweighted averageSOURCE: EUROPEAN COMMISSION EUROBAROMETER RESULTS LISTED IN KEY FIGURES ON HEALTH POCKET BOOK (2001)

By the numbers

In need of treatment

Health Care Providers II

The charts below offer a snapshot of the health care industry.

Share of population satisfied Share of population dissatisfied

Very Fairly Total Fairly Very Total satisfied satisfied satisfied dissatisfied dissatisfied dissatisfied

On average, 40 percent of respondents are actually dissatisfied with the health care system . . .

Health expenditures per capita (US$ 2001)

SOURCE: OECD HIGH PERFORMING HEALTH STUDY

Private

Public

United Kingdom

Switzerland

Spain

Norway

Italy

Denmark

Germany

France

Netherlands

Australia

United States

$1,200

2,100

1,700

2,550

2,100

1,700

1,950

2,050

1,500

1,700

1,600

$400

2,787

1,480

462

708

928

611

453

691

512

392

$1,600

1,992

2,212

2,191

2,503

4,887

3,180

3,012

2,808

2,628

2,561

. . . even though per capita spending is high–and growing as a percent of GDP.

Health spending as a percentage of GDP

SOURCE: OECD HEALTH DATA, 2003

2000

1990

United Kingdom

Switzerland

Sweden

New Zealand

Korea

Germany

Canada

Australia

United States

7.8%8.9%

8.06.9

4.85.9

9.09.2

11.913.1

6.07.3

8.28.4

8.510.7

8.510.6

Industry Report Health Care Providers II

Growth in pharmaceuticals expenditures per capita, in real terms, 1990-2001 (1990=100)

SOURCE: OECD HEALTH DATA, 2003

$117

Switzerland

Sweden

Canada

Australia

United States

Germany

Italy

Hungary

Denmark

Netherlands

Greece

Czech Republic

Ireland

France

Finland

128

133

137

147

148

151

162

163

172

175

181

190

211

199

Increases in the cost of pharmaceuticals, which are included in the total health expenditure, are helping to drive the rising costs.

Percentage of patients waiting more than four months for elective surgery

Base: Those with elective surgery in the past two yearsSOURCE: DONELAN ET AL. (1999) AND BLENDON ET AL. (2002); OECD HIGH PERFORMING HEALTH STUDY

Canada

Australia

United Kingdom

United States

New Zealand

1%5%

1723

1227

2622

3338

2001

1998

Despite more spending in health care, waiting lists for surgeries are going up,especially in publicly run systems.

Average length of stay(days) for acute care, 2000

Relative variation in health care delivery

And higher per capita expenditures do not seem to affect hospital length of stay . . .

FH

D

E

1000

2000

3000

4000

5000

6000

0 2 4 6 8 10 12

I

BG

CA

Health expenditures per capita (US$ PPP),*2001

Purchasing Power Parity (PPP) provides a means of comparing spending between countries. PPPs are the rates of currency conversion that equalize the cost of a given “basket” of goods and services in different countries.SOURCE: OECD HEALTH DATA, 2003

S

*

A AustraliaB CanadaC GermanyD KoreaE New ZealandF SwedenG SwitzerlandH UKI USA

Practicing physicians per 1 million population

Physician density and health expenditures, 2000

. . . or be related to physician density.

E

N

4

6

8

10

12

14%

0 1000 2000 3000 4000 5000

J

Health expenditures as percentageof grossdomesticproduct

S

SOURCE: OECD HUMAN RESOURCES IN HEALTH CARE PROJECT AND OECD HEALTH DATA 2003, 3RD EDITION

2

UL

D A

V

Q S

A AustraliaB AustriaC BelgiumD CanadaE SwitzerlandF DenmarkG FranceH GermanyI GreeceJ IrelandK ItalyL JapanM South KoreaN MexicoO NetherlandsP New ZealandQ NorwayR PortugalS SpainT SwedenU UKV USA

RO

GF

H

CB

IKP

M

T