From Volume to Value in Health Care: The Work Begins.

The transition of health care from volume to value is no longer theoretical, or wishful thinking.1 The work is now under way. In this issue of JAMA, the article by Lee et al2 from the University of Utah provides clear evidence that the work is doable and is worth doing. The report also points to additional steps that can take value improvement even further. The progress on value improvement reported by Lee and colleagues could not be more timely. Health care is finally entering an era of significant change, and the model for health care delivery is being redesigned from the ground up. Redesign is being accelerated by a long-needed transition in the payment system away from fee-for-service to value-based payments. The Centers for Medicare & Medicaid Services have committed that 90% of Medicare payments will reward value by 2018, and commercial payers are starting to do the same. Bundled payments, which most directly reward both better outcomes and lower cost, are an increasingly important focus for Medicare, Medicaid, private insurers, and major employers such as Walmart, General Electric, and Boeing.3 For hospitals and physicians, the period of voluntary experimentation with new payment models is coming to an end. In 2016, the Centers for Medicare & Medicaid Services have made bundled payments for total hip and knee replacement mandatory in 67 regions under its Comprehensive Care for Joint Replacement model and has announced plans to do the same for acute myocardial infarction, coronary artery bypass graft surgery, and femur fractures in even more regions in 2017.4 The clear message is that hospitals, health care centers, and clinicians should no longer be spending time discussing whether to participate in bundled payment programs but instead focusing on how to do the work necessary to succeed under them. The article by Lee and colleagues shows how to start down the path of value improvement and demonstrates the significant results attainable. This article shows that achieving better quality and lower costs is possible, and everyone can benefit: patients, hospitals and physicians, and society. However, it is also clear that value improvement is not business as usual; it is an entirely new way of managing. The University of Utah Health Care team began with 3 fundamental strategic tenets. First, value improvement became the organization’s business model, as opposed to maximizing fee-for-service revenue. This change began in 2012, and as a long-term agenda, the health care organization made substantial investments in new systems for measuring, analyzing, and reporting clinical outcomes and costs at the level of individual patients. A second key strategic choice was to organize the work around specific patient conditions. The health care leadership understood the limits of the typical approach of targeting “generic” high-cost areas that include all patients, such as reducing readmission. Instead, the real opportunity to drive major efficiencies and improvements in quality occurs through focusing on specific patient conditions and optimizing their care. Third, the organization created multidisciplinary teams to drive the improvement effort. Leadership recognized that value is created not through specialty silos but through Author Audio Interview at jama.com