Best Possible Value PRACTICE GUIDEBOOK - HFMA

Best Possible Value

PRACTICE

GUIDEBOOK

A toolkit for commissioning and providing

organisations using a value-based approach

bpv.futurefocusedfinance.nhs.uk

Best Possible Value is one of six complementary action areas of the national Future-Focused Finance programme.

Our ambition for the NHS finance function is to be leaders in delivering the maximum value to patients and the public.

We want to effect a change in mind-set where the health service uses value as the standard approach in evaluating strategic options or operational choices.

This Practice Guidebook is suitable for commissioning and providing organisations and contains:

a definition and overview of value in health systems,

practical tools and techniques that enable the delivery of value,

links to more value resources and the NHS value community.

value tools

data sources

case studies

Visit the companion website for more information and to access a database of:

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01 Introduction to Best Possible Value ..... 2

02 Value in healthcare systems ................. 4 Porter’s Value Equation

03 Identifying priorities ............................ 5 NHS Right Care

04 Making effective decisions ................... 6 Decision Effectiveness Framework

05 Measuring and demonstrating value ... 10 Value Criteria and Metrics

06 Stakeholder decision roles ................... 12 Bain’s RAPID™ Model

07 Identifying the best value option ......... 14 Evaluation Dashboard

08 Further resources ................................ 16

Contents

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01 Introduction to Best Possible Value

The health service must deliver more value as demand for services is growing faster than funding. The complex structure of the NHS further complicates this situation, often producing impasses, inefficient processes and sub-optimal results.

The finance function is ideally positioned to address these challenges and to facilitate the use of value as a common focus in healthcare.

Our aspiration is for Finance to be leaders in delivering value; we want to effect a change in mind-set where value is used as the standard currency in evaluating strategic options or operational choices.

In order to enable this vision, we’ve developed and collated tools and resources which can be used by finance professionals to help make decisions for value as effectively as possible.

This guide introduces the reader to defining value in health and provides an overview of the Best Possible Value approach.

This guide and its companion website is a repository for value tools, templates and data sources helpful to each step in the process.

Tools can be incorporated into existing organisational systems and processes and can be scaled to size suit individual circumstance.

Combine the best in financial

information and health economics

Solve biggest challenges

Leadership role as drivers of robust

decision-making based on value

Focus on value Focus on cost

Use financial metrics

Analyse challenges

Input into decisions

FINANCE TODAY FINANCE TOMORROW

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Best Possible Value performed a diagnostic survey of finance and non-finance staff which identified prominent themes around value and effective decision-making in the NHS.

In response, we worked with Bain & Company to develop a Decision Effectiveness Framework and identify other appropriate tools to address these challenges.

The Best Possible Value approach is being used at Vanguard sites and should be used by all organisations to support and assure all key decisions, and in the development of Sustainability and Transformation Plans.

NHS colleagues often experience a lack of ...

Clarity on roles and responsibilities

The right information and tools

A clear, agreed measure of value

Anyone involved in healthcare management will benefit from learning more about value and the importance of prioritising patient outcomes. Depending on your role you may wish to focus on particular sections of this guide.

Our methodology is a framework for making decisions for achieving best possible value. It does not replace the business case process, evaluate results of a decision post-hoc, or guide the user in stakeholder negotiations.

Value in healthcare systems

Identifying priorities

Decision effectiveness

Demonstrating value

Stakeholder decision roles

Identifying the best value option

Case studies and data sources

Website training and resources

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02 Value in healthcare systems

There are a number of ways to discuss the concept of value in public sector services and healthcare economies. Best Possible Value particularly builds on Michael Porter’s seminal work on transforming healthcare economies in the U.S. to a whole-system value approach.

In ‘Redefining Healthcare’, Porter demonstrates that value depends on results - not inputs - therefore value is measured primarily by the outcomes achieved. This relationship between resource inputs and clinical outcomes is illustrated in Porter’s Value Equation. Porter asserts that the best way to reduce costs is to concentrate on improving patient outcomes.

The value equation is not intended to ‘calculate’ a single numerical decision indicator. It is rather an anchor point for linking discussions between finance and clinicians to ensure that all parties are able to focus on getting the best result. It helps stakeholder groups answer identify the right issues from the start;

“What problem are we trying to solve?”

Visit the Value Library for papers on value in healthcare, including work by Porter,

The King’s Fund and NHS Confederation at bpv.futurefocusedfinance.nhs.uk/library

VALUE =

OUTCOMES

Clinical Effectiveness

e.g. population health,

survival rate, extent of

functional recovery

Patient Experience

e.g. comfort, treatment

by staff, waiting time,

ease of access

+

Safety

e.g. diagnostic error,

post-operative

complications, infections

+

RESOURCES

Revenue Costs

e.g. income, salaries,

system maintenance,

facilities

+ Capital Costs

e.g. investment in

infrastructure or

equipment

+ Non Financial

e.g. staffing resources,

capacity, systems and

infrastructure

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03 Identifying priorities

A database of other value in health organisations is available at bpv.futurefocusedfinance.nhs.uk/networks

Commissioning for Value

Commissioning for Value is a collaboration between NHS Right Care, NHS England and Public Health England. The programme is about identifying priority programmes which offer the best opportunities to improve healthcare value for local populations.

Commissioning for Value is a full process that reviews existing local health data to highlight the top priorities (opportunities) for transformation and improvement.

Data packs, case studies, online resources and facilitated workshops support CCGs in ‘where to look’ in improving value.

NHS Atlas of Variation

The NHS Atlas of Variation in Healthcare is a stimulus to start a search for unwarranted variation, and is used as a springboard to releasing resources for re-investment in higher-value healthcare for local patients and health economy populations.

The NHS Atlas series is pivotal in the interrogation of routinely available data that relate investment, activity and outcome to the whole population in need and not just those who happen to make contact with a particular service.

Versions for CCGs and Local Authorities.

Star Priority Setting

Socio-technical allocation of resources (Star) an approach to priority setting developed by The Health Foundation and the London School of Economics (LSE).

The Excel-based Star tool enables users to compare the relative value for money of healthcare interventions and enables all stakeholders to take part in structured discussions about resource allocation.

Star is suitable for anyone charged with making decisions about resource allocation as they plan services. NHS Right Care offers two casebook examples.

NHS Right Care offers various value-based processes to support the delivery of the Five Year Forward View and to help local health economies focus on tackling unwarranted variation:

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04 Making effective decisions

The Decision Effectiveness Framework can be used by all organisation types and can be incorporated into existing systems and processes, scaled according to circumstance.

Benefits of using the framework include:

Clear process to improve speed and ease of decision-making

Options are evaluated on the merits of maximising value

Good governance and accountability

Consistent and comparable approach

Clearly evaluate and evidence success

Rapidly identifying what works and ending what doesn’t work

Harnessing ideas and innovations from the front line

Enact agreed decisions sooner and with the support of all stakeholders

DECISION STYLES

Consensus

A decision is reached

when everyone agrees

Democratic

Decisions are based

on majority vote

Directive

One person has authority

for making a decision

Participative

Collaborative approach

with input from experts

The key measures of decision effectiveness are quality, speed, yield and effort. International studies of high-performing organisations show that places that are effective at making decisions have a higher return on investment and have staff that are much more likely to recommend their organisation as a place to work.

The NHS currently uses a mix of all four decision styles which can be ineffective, particularly in regard to the speed at which a decision is reached. Survey respondents thought that the NHS style should be primarily ’participative’.

Any decision style can work in the right situation but participative style has the distinct advantages of balancing a single point of accountability with collaboration by experts.

Bain & Company have developed an NHS Decision Effectiveness Framework which advocates designing effective participative decisions involving the right stakeholders from the very beginning of the decision process.

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Training in using the Decision Handbook including e-learning and worked examples is available at bpv.futurefocusedfinance.nhs.uk/learn

Decision Effectiveness Framework

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The full Decision Handbook is composed of four steps; the WHAT, WHO, HOW and WHEN and is best suited to decisions made from scratch. The essential components and templates of the framework are presented in this guidebook.

Relevant stakeholders are invited to participate in facilitated workshop events and are tasked with completing and agreeing several key templates.

Engagement from a balanced set of stakeholders is critical when working through the framework; clinicians should be involved as much as possible.

It can also be helpful to run the process by having individuals from within organisation(s) acting as:

champion - builds stakeholder commitment;

facilitator - runs the process in meetings; and

co-ordinator - runs the process between meetings.

These can be informal roles and for ‘smaller’ decisions one person can perform all three roles.

HO

W

Clarify timeline for decision &

execution, & key milestones

Consider creating a decision

calendar for ongoing

interconnected decisions

Install structured decision

approach

Design and specify:

- Interactions

- Critical meetings /

committees

- Closure and commitment

- Feedback loops

Define the decision we are

actually trying to make

Frame the decision in an

appropriate way

Split the decision into

sub-decisions if necessary

Clarify up-front who will play

what role in each decision

(e.g. decision-maker,

recommender)

WHAT WHO

HOW WHEN DECISION CHARTER

Decide how to improve value and bridge a £4M resource gap in the health economy DECISION

CONTEXT

NHS data indicate that a CCG responsible for a small northern industrial town of ~200,000 people is underperforming relative to its demographic peer group in several service areas. Their budget allocation will increase 5% next year to £210M, while projected outlays with no commissioning changes are expected to increase 7% to £214M. The CCG must decide how to improve value and bridge the £4M resource gap in the health economy, and ensure providers implement the necessary changes.

OBJECTIVES

- Improve value (cost, outcomes, safety and experience) delivered by the health system - Deliver services more efficiently to meet population’s health needs - Changes are sustainable within the broader health economy - Providers support and implement the changes

CONSTRAINTS

- Must reduce projected outlays by £4M - Manage resources within the financial framework set by NHS England - Must align with CCG strategic plan and adhere to CCG governance rules - Must be acceptable to public/political officials and regulators - Should be acceptable to clinical staff, financial staff and patients

bpv.futurefocusedfinance.nhs.uk Decision Effectiveness Framework

Make sure everyone is on the same page about the ‘known knowns’

Example allocation decision

The primary goal is to maximise value by focusing on outcomes

All stakeholders need to agree what trade-offs may be involved

WHAT WHO

HOW WHEN DECISION ARCHITECTURE


KEY SUB-DECISIONS

1 Decide the areas with the greatest opportunity for improved outcomes/cost reduction

2 Decide how to improve each opportunity area and the preferred option(s) for improvement

3 Decide the deliverability of preferred option(s)

4 Decide whether to proceed with preferred option(s) and implementation plan



Frame all decisions as statements i.e. “We need to decide...”

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05 Measuring and demonstrating value

Chapter 2 introduces Porter’s Value Equation as a common ground for clinicians and finance to discuss outcomes and financial constraints. In the workshop, the group next needs to agree what outcomes to measure and how to measure them using the Outcomes and Value Metrics template.

This stage of the process answers “how will success be measured when changes are made?”. By agreeing what outcomes to measure and how to measure them, the group can ensure a focus on value and agree that the problem has been correctly defined and key results identified.

Case study Example

Ribera Salud is a Healthcare Management Company that operates four privately run public hospitals in Spain and uses patient involvement to deliver best possible value.

Local populations are informed of changing processes, health outcomes and associated costs, and are involved in decisions and governance.

Consider each of the components of value and identify the criteria and metrics for each.

The criteria should align with the key outcomes selected in the Decision Charter.

Evidence and data for the metrics should be accessible and relevant.

Highlight the metrics which are the most important to assess the decision, and which you will focus on going forward (‘must have vs nice to have’).

Make best use of time input by focusing stakeholder attention on the appropriate components of value.

Completion of the Decision Charter and Outcomes and Value Metrics templates may aid in assessing which of a large number of projects are viable to pursue further and that need defining further before progressing.

The Outcomes and Value Metrics template aids comparability and is a key component of the options appraisal stage of the process.

The companion website contains a

repository of data sources to use as metrics

at bpv.futurefocusedfinance.nhs.uk/data

Quality indicator Ribera

Salud

Valencia

region

hospitals

Average hospital stay 4.5 days 5.8 days

Readmission within three

days (per 1,000 discharges) 4.05 6.1

Outpatient surgery rate 79% 52%

Patients’ satisfaction 9.1 7.2

External consultation delay 25 days 51 days

Average surgery delay 34 days 60-90 days

CAT delay 12 days 90-120 days

Emergency waiting time < 60 mins 131 mins

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WHAT WHO

HOW WHEN OUTCOMES AND VALUE METRICS


Value

Components Value Criteria Value Metrics

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Clinical

outcome

- Population health - Prevention - Outcome of intervention relative to patient expectations - Patient recovery - Sustainability of health

- Prevalence (e.g. hypertension prevalence relative to peer group) - Prevention (e.g. ratio hypertension v. heart failure prevalence, % CHD patients on aspirin) - Diagnosis (e.g. % of cancers detected at an early stage) - % patients treated to a pre-defined care standard (e.g. 8 Key Care Processes for Diabetics) - Recovery (e.g. % of patients discharged home) - Survival rate (e.g. 1 year net cancer survival rate) - Re-admittance rate (e.g. emergency re-admission to hospital within 28 days (%): stroke)

Patient

experience

- Access to care - Experience in care

- Distance to care (e.g. average distance for emergency admission) - Waiting times (e.g. TIA cases treated within 24 hrs) - Specialists per population (e.g. proportion of non-STEMI patients seen by member

of cardiology team) - Time between referrals (e.g. % of cancers receiving treatment within 2 months

of GP referral)

Safety - NRLS safety incidents by type (e.g. “clinical assessment”

incidents compared to peer group) - Clinical assessment incidents - Treatment/procedure incidents - Medication incidents

RESO

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Revenue

costs

- Delivery model / cost structure - Activity rates (e.g. imaging frequency) - Clinician salary - Admin staff salary - System running costs

- Activity (total) - Total programme spend relative to peer group (e.g. spend on primary care prescribing

for CHD) - Elective/Non-elective programme spend (e.g. spend on non-elective admissions

for GI cancer)

Capital

costs - Investment in facilities / equipment - Capital requirement and rate of return



What to count How to count it

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06 Stakeholder decision roles

According to our survey, the NHS generally possesses some clear strengths on which to build when considering the drivers of decision effectiveness. We have passionate employees committed to the effectiveness of the NHS and finance are seen to have a seat at the table in key decisions related to ‘best possible value’.

However, feedback suggests that - given the structural complexity of the NHS - too many parties are often involved in decisions where roles are not always entirely clear; especially for decisions with a variety of different stakeholders.

In these situations Bain’s RAPID™ collaborative decision roles tool helps improve decision quality, execution and speed. Again, stakeholders use the Decision Charter to agree on assigned roles for each sub-decision.

This approach to decision making encourages limiting complexity and combines the benefits of collaboration by experts with a single point of authority for progressing a decision.

RAPID™ Rules:

Note sub-decisions as rows and relevant stakeholders as columns.

Stakeholders may be organisations, Boards, departments, teams or individuals.

One role per stakeholder per sub-decision.

One R and one D of different stakeholders (no marking your own homework).

Locate D at the right level in the organisation. If D belongs to a group, clarify and agree beforehand how the decision will be made (see page 6 for decision styles).

Use A sparingly for extraordinary circumstances (e.g. regulatory or legal).

Can be multiple I but limit assignation to those with relevant, valuable information that could potentially change the decision.

Consider involving P up-front as I to assist with planning.

® RAPID is a registered trademark of Bain & Company Inc.

RECOMMEND

INPUT

PERFORM

AGREE

DECIDE

Performs 80% of the work to

develop a decision

recommendation to D

Has the power to veto R on

legal or regulatory grounds

Actions or executes the

decision when made by D

Must be consulted by R, views

may or may not be reflected

in final decision

Responsible for committing to

an action, usually based on

recommendation of R

WHAT WHO

HOW WHEN RAPID™ DECISION ROLES


1 Decide the areas with the greatest opportunity for improved outcomes/cost reduction

D A R A I I

2 Decide how to improve each opportunity area and the preferred option(s) for improvement

D I R I I I A I

3 Decide the deliverability of preferred option(s)

I D A R I A I

4 Decide whether to proceed with preferred option(s) and implementation plan

D R A I P


R Recommend A Agree P Perform I Input D Decide


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Decision Architecture sub-decisions

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07 Identifying the best value option

Benchmarking tools are usually externally-focused and compare between groups or organisations. The Best Possible Value approach allows for a head-to-head comparison of options to identify which will generate the most value within a group or organisation.

The New Models of Care Programme uses our value approach to compare 22 core innovative mechanisms employed to create value across each of the 50 vanguard sites.

Each of the components of value are assigned:

Importance (high, medium or low) Value generated (red, amber, green) Evidence strength (‘Harvey balls’)

Risks are also recognised and a reflection of risk appetite is incorporated into the model.

Options can then be evaluated and prioritised based on their risk-value generated profile using the Evaluation Dashboard.

Achievability of value

Quantitative evidence from this site

Quantitative evidence from national study

Quantitative evidence from international study

Anecdotal evidence or robust logic model

No evidence

Low risk High risk

Implementation risk

Strong case for change, delivery plan, governance and

risk assessment

Partially defined case for change, delivery plan, governance and risk

assessment

Lack of delivery plan with milestones; some detail

provided for other aspects

Lack of case for change, delivery plan, governance and

risk assessment

Low risk High risk

Financial risk

Breakeven by 2017 Breakeven by 2018 Breakeven by 2019

Low risk High risk

Risk tolerance exceeded

EVALUATION DASHBOARD

Importance Option 1 Option 2 Option 3

Outcomes

Clinical High ◑ ◔ ◕ Patient experience

Safety / quality Sustainability

Financial Non-financial

Resources

Capital costs (non recurring) Revenue costs (recurring)

Non-financial

Risks

Achievability of value Implementation risk

Financial Risk

Other practical considerations

Level of local contribution Replicability of model

Overall rank (or recommended investment option)

bpv.futurefocusedfinance.nhs.uk Value Assessment

Illustrative example

Confidence:

◔ Low

◑ Medium

◕ High

● 100%

Value outcome:

Low

Medium

High

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08 Further resources

Value Tools

Spend & Outcomes Tool (SPOT)

- Public Health England

Return on Investment Tool

- NICE

Programme Budgeting

- NHS England

Combined Predictive Risk Model

- Department of Health

Adopt Improve Defend

- NHS Right Care

Business Case & Project Models

bpv.futurefocusedfinance.nhs.uk

Data Sources

Health & Social Care

Information Centre

International Consortium for

Health Outcomes Measurement

(ICHOM)

NHS England

The Health Foundation

Dr Foster

Costing for Value Institute

NHS Networks

Case Studies

Liverpool CCG -

Investment decision for

population lung health

Mid-Cheshire Hospitals NHS

Foundation Trust -

Increasing elective capacity

decision

Investment decision example -

Maternity care pathway

Allocation decision example -

Bridging a resource gap in the

local health economy

Community of Practice

News updates

Online forum

Speak with the team

Ask the demonstration sites

Write your own blog

Find a nearby event

Get in touch with other

colleagues using the process

Tweet a question on #bpvFFF

and more at

Future-Focused Finance is sponsored by:

In February 2014, the six heads of the finance profession in the NHS came together to form the Finance Leadership Council (FLC) and to initiate

Future-Focused Finance. The FLC sponsors the Future-Focused Finance programme, and forms its steering group who meet on a monthly basis.

The FLC members are:

Bob Alexander Chief Executive, NHS Trust Development Authority

Paul Baumann Chief Financial Officer, NHS England

Steve Clarke Finance Director, Health Education England

Stephen Hay Managing Director of Provider Regulation, Monitor

Sue Lorimer Business Director North, NHS Trust Development Authority and President, HFMA

David Williams Director General, Strategy, Finance and NHS, Department of Health

Join the conversation www.futurefocusedfinance.nhs.uk

@nhsFFF | #futurefocusedfinance [email protected]

Future-Focused Finance is about ‘Making People Count’ by ensuring

that everyone connected with NHS finance has access to the relevant

skills, methods and opportunities to influence decision making in

support of the provision of high-quality patient services.

It offers a vision for NHS finance to aspire to over the next five years.

That includes everyone who works in finance, in every role at every

level, those we work with to deliver services and the patients and

communities that use and support those services.

v1.1 March 2016

http://www.futurefocusedfinance.nhs.uk/

Best Possible Value PRACTICE GUIDEBOOK - HFMA

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