One of the troubles with healthcare is that it’s hard to measure success. What price would you put on your life, or that of your child? Quality Adjusted Life Years are beset with problems. Hedonic adaptation plays havoc with logical ideas that major illness ruins lives, or perfect health should correlate with happiness. It’s also backwards. Most people’s ideal vision for their health involves zero spending on healthcare products and services (which would irk today’s medical industrial complex).
A April 2018 paper by the Urban Institute explores whether pay for success (PFS) models could work in healthcare, and finds further reasons to be sceptical:
- Better health outcomes often don’t mean lower costs
- A few people cost the most, making targeting expensive
- Many people don’t want to reduce costs (see the CEOs above)
- Working with the government is HARD
Despite the last point, it suggests governments are the most logical player as payer and funder, given that often benefits are captured by different groups to those paying for the beneficial interventions:
(T)he diffuse benefits of most social programs designed to reduce health care use still make state and local governments the most likely viable payers and the most viable long-term funders of successful interventions
Urban Institute – Pay for Success in Health Care, April 2018
I would add to the list that better health often requires multiple interventions working together, which is not how RCTs work.
This framework of challenges suggests criteria for what could be successful PFS in healthcare:
- Target the most expensive treatments to avoid, and develop a theory of change ahead of time that will result in cost savings. (E.g. those suffering the most expensive chronic conditions, requiring regular hospitalisations)
- Work with intermediary groups that gather particularly vulnerable patients (e.g. Diabetes association)
- Align incentives with a closed group of payor – providers (such as PACE models, Kaiser, or most European health systems)
- Identify innovative regions or cities that have their own healthcare budgets (e.g. US states vs Medicaid, Manchester in the UK)
As pressure mounts on healthcare budgets the logic for transparency and an outcomes-focus is compelling. Would be interesting to see which governments (city, regional or national) step up to this interesting opportunity; I suspect many others may follow.
Can you develop a ranking system showing which governments (city, regional or national) are providing the best and most cost effective healthcare and if so how can you get the organisations to incorporate it into their DNA? If this can be achieved surely they can be persuaded of the benefit of their rising up through the rankings to everyones mutual benefit.