Presentation given by Eric C. Schneider, MD, Senior Vice President for Policy and Research of The Commonwealth Fund at the University of Michigan Institute for Healthcare Policy and Innovation in Ann Arbor, MI on December 7, 2017.

1. Advancing Research to
Reduce Low-value Health Care
University of Michigan Institute for
Healthcare Policy and Innovation
Ann Arbor, MI
December 7, 2017
Eric C. Schneider, MD, MSc, FACP
Senior Vice President for Policy and Research
The Commonwealth Fund
@ericschneidermd

2. Agenda
2
1. US health care: the value challenge
2. How can better value in health care be achieved?
3. Thoughts about future research on value

3. Defining Value:
The good, the bad, and …
• Traditional clinical model
• Services a doctor believes could benefit
a patient
• Appropriateness model
• For clinical indications, those services
for which scientific evidence and
clinical expert opinion determines that
benefits exceed risks
• Patient-preference model
• Services a patient chooses to receive
after being adequately informed of
alternatives

4. Mirror, Mirror 2017: International Comparison
Reflects Flaws and Opportunities for Better U.S
Health Care

5. Health Care Spending as a Percentage of
GDP, 1980–2014
0
2
4
6
8
10
12
14
16
18
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
United States (16.6%)
Switzerland (11.4%)
Sweden (11.2%)
France (11.1%)
Germany (11.0%)
Netherlands (10.9%)
Canada (10.0%)
United Kingdom (9.9%)
New Zealand (9.4%)
Norway (9.3%)
Australia (9.0%)
Percent
GDP refers to gross domestic product.
Source: OECD Health Data 2016. Data are for current spending only, and exclude spending
on capital formation of health care providers.

6. Health Care System Performance Scores
of Eleven High-Income Countries
Source: Schneider et al. Mirror, Mirror 2017:
Note: See the methodology appendix for a description of how the performance score is calculated.
UK AUS
NETH
NZ NOR
SWIZ SWE GER
CAN
FRA
US
Eleven-country average
Higher performing
Lower performing

7. More Than One-Quarter of Insured Adults Were Underinsured in 2016
12 13
22 23 23
28
0
10
20
30
2003 2005 2010 2012 2014 2016
* Underinsured defined as insured all year but experienced one of the following: out-of-pocket costs, excluding premiums, equaled 10% or
more of income; out-of-pocket costs, excluding premiums, equaled 5% or more of income if low-income (<200% of poverty); or deductibles
equaled 5% or more of income. Data: Commonwealth Fund Biennial Health Insurance Surveys (2003, 2005, 2010, 2012, 2014, and 2016).
Percent adults ages 19–64 insured all year who were underinsured*
Source: S. R. Collins, M. Z. Gunja, and M. M. Doty, How Well Does Insurance Coverage Protect Consumers from Health
Care Costs? Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2016, The Commonwealth Fund,

8. Both Federal Deficit and Medicare Spending Will Nearly Double In Coming Years
(Dollars in Billions)
Note: Net Medicare spending is defined as mandatory Medicare spending minus income from premiums
and other offsetting receipts.
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Projected Net
Medicare Spending
(billions of dollars)
Projected Defict With
Tax Bill, no dynamic
scoring (billions of
dollars)
Projected Deficit
Without Tax Bill
(billions of dollars)
Source: Congressional Budget Office, Joint Committee on Taxation, and Commonwealth
Fund analysis.

9. Overuse May Cost U.S. Over
$300 Billion Annually
Colla et al. JGIM 2014

10. Defining Value:
The good, the bad, and the costly…
• Health outcomes-cost model
• “Health outcomes achieved per dollar
spent”
• Features of the model
• Numerator measures condition-specific,
multidimensional health outcomes
• Denominator is aggregate spending for a
‘cycle of care’ for the condition
• Requires longitudinal measurement
• Defined for patient groups with similar
needs
• Agnostic to process of care
• Accountability?
Porter, NEJM 2009

11. Agenda
11
1. US health care: the value challenge
2. How can better value in health care be
achieved?
3. Thoughts about future research on value

12. Options: Direct Changes to Care
Delivery
• Changing practice decisions of professionals, staff, and
organizational managers
• Improvement collaboratives, campaigns
• Cyclical process improvement
• Clinical decision support at point of care
• Challenges
• Incremental and very modest changes
• Usual focus on increasing use of evidence-based practices
rather than de-implementation of low-value care
• Difficult to spread and scale even when interventions succeed
in one place
• Resistance to change and limited sustainability because of
environment, organization, social dynamics, and individual
habit

13. Effectiveness of Published Interventions
to Reduce Low Value Care

14. Well-designed Electronic Nudges Reduced
Inappropriate Antibiotic Prescription
Linder et al. JAMA, 2017

15. Choosing Wisely: Unnecessary Tests
and Procedures Ordered because of…

16. Quality Improvement
Levels of Intervention
16
System/Environment
Institution/Organization
Group/Team
Clinician
SHARP
END OF CARE

17. What Can Other Industries Teach
Health Care about Achieving Value?
Core
Optimizing current
approaches
Transformational
New and potentially
disruptive delivery and
payment systems
Adjacent
Innovation for
existing delivery and
payment systems
Existingsystems
&stakeholders
Newsystems
&stakeholders
Existing process &
service improvement
New processes &
services

18. What is Needed for a Disruptive
Innovation?
CH Christenson. The Innovator’s Prescription 2009
A technological enabler Cellular data internet,
digital sensors, secure
messaging platforms
An innovative business
model
Intensive home-based care
for high-need, high-cost
patients
An economically
coherent value network
Medicare Advantage
Risk-sharing contracts
Coordination with primary
care, ED, and hospital

19. Could consumer-focused digital tools advance
value in health care?

20. The IT-enabled Consumer Vision:
A Digital Health Advisor (DHA)
Imagine an app designed to help people
deal with health problems, whether large
or small…
It could answer routine questions;
streamline everyday interactions with
doctors’ offices, pharmacies, therapists,
and other parts of the health care system;
and empower people to achieve their
health goals by delivering personalized
coaching on diet, exercise, and sleep.
And by informing users about health
insurance options, available local
providers, and prices for services, the app
could help people select the most
appropriate health plan, schedule visits,
shop for the least costly medications or lab
tests, arrange for home care services, and
manage deductibles…
Source: http://www.commonwealthfund.org/publications/blog/2016/may/envisioning-a-digital-health-
advisor
Image: http://www.keenan.com/2016/consumer-
healthcare-tools-can-drive-informed-decisions/

21. The Path to Value is Not Always Easy to
Discern
• The “Bankograph”1 (1961)
• The “Yes” Machine2 (1969)
• A bet and a blizzard
• Shared networking3
21
1.Staff Hc. Automated Teller Machines. 2010; http://www.history.com/topics/inventions/automated-teller-machines.
Accessed May 29, 2015.;
2. Bátiz-Lazo B. A Brief History of the ATM how automation changed retail banking. The Atlantic. Online: The Atlantic;
2015.;
3. McAndrews JJ. The Evolution of Shared ATM Networks. Business Review. 1991.

22. Agenda
22
1. US health care: the value challenge
2. What can U.S. do to increase value in health care?
3. Thoughts about future research on value

23. Research Opportunities:
Development, Testing, Evaluation
• Develop, test, and evaluate novel tools and their
implementation by care delivery organizations to
increase value
• Describe and evaluate potentially disruptive
platforms and business models not currently part
of the incumbent health care system
• Study the impact of value-enhancing innovations
on populations

24. Measuring the Effects of Value-enhancing
Interventions and Business Models: A Menu
Technology
•Feasibility
•Functionality
•Unexpected
Bugs
Workflow
•Take up
•Use Patterns
•Stickiness
•Safety
•Unintended
Consequences
•Costs
Clinical
•Adherence to
Treatment
•Use of Health
Services
•Quality of
Care
•Patient
Engagement
•Patient
Experience
•Provider
Experience
Person/Life
•Social Relationships
•Quality of Life
•Caregiver experience
•Self-Efficacy
•Functioning
•Health Status
•Emotional Status

25. Research Opportunities:
Methodologies
• Human-centered design
• Network analysis
• Measure development and validation
• Data science
• Machine learning

26. Conclusion: Two Roads to High Value
• Decision-modifying interventions implemented for
clinicians AND new potentially disruptive business
models built around technology enablers and new
payment incentives
• Evaluate more than just health outcomes and cost–
understanding business model design and
implementation are crucial

27. Thank you!
University of Michigan Institute for
Healthcare Policy and Innovation
Ann Arbor, MI
December 7, 2017
Eric C. Schneider, MD, MSc, FACP
Senior Vice President for Policy and Research
The Commonwealth Fund
@ericschneidermd