The Concept of Value in Mental Health Services

1. PsychOdyssey Presentation to the NJ Mental Health Planning Council Tom Pyle, January 9, 2013 www.psychodyssey.net The Concept of Valuein Mental Health Services

2. The Family Experience

3. From our last meeting…

4. “…Investors…”

6. “…Business Models...”

7. BizSpeak: “Investments”  ?… ROI 1. (n.) The French word for “king.” 2. Abbr. for return on investment, a way to measure the benefit of an investment. Photographer: Adam Frans van der Meulen/Getty Images

8. In other words…

9. Value in Mental Health Services

10. What is the Problem? (Kaplan & Porter, 2011) “…almost complete lack of understanding of how much it costs to deliver patient care, much less how those costs compare with the outcomes achieved.” Robert Kaplan & Michael Porter

11. What is the Goal? • Access? • Availability? • Equity? • Cost containment? VALUE for the Consumer

12. Value: Definition (Oxford English Dictionary) The regard that something is held to deserve; the importance, worth, or usefulness of something: your support is of great value • the material or monetary worth of something • the worth of something compared to the price paid or asked for it

13. Value in Health Care

14. Value: A Calculation (Porter, 2010) Value =

15. Outcomes (Porter, 2010) • Multidimensional • By steps… • Over time…

16. Outcomes Measures Hierarchy (Porter, 2010)

17. Challenges of Health Care Costing (Porter, 2010) • Complex delivery • Many resources • Each with different capabilities and costs • Fragmented delivery • “Idiosyncratic” (i.e., “Individualized”) • Highly customized “job shop”

18. Costs: How To Measure? (Kaplan & Porter, 2011) Track the… sequence and duration 0f the… clinical and administrative processes used by the… individual patient Time-Driven Activity-Based Costing (TDABC)

19. Time-Driven Activity-Based Costing(Kaplan & Porter, 2011) Patient Jones’ outpatient visit…

20. Time-Driven Activity-Based Costing(Kaplan & Porter, 2011) Capacity Cost Rate for Resourcei =

21. TDABC(Kaplan & Porter, 2011) ❶ Capacity Cost Rate for Resourcei = ❶ ❶❶❷❷❸❸

22. TDABC(Kaplan & Porter, 2011) ❶ Capacity Cost Rate for Resourcei = ❷ ❶ ❷

23. TDABC(Kaplan & Porter, 2011) ❸ ❶ Capacity Cost Rate for Resourcei = ❷ ❶ ❷ ❶❶❷❷❸❸ ❸ Nurse’s Capacity Cost Rate = $7,280 -:- 112 hrs = $65/hr

24. TDABC(Kaplan & Porter, 2011) Patient Jones’ outpatient visit… ❸

25. TDABC(Kaplan & Porter, 2011) Patient Jones’ outpatient visit… $84.50

26. Value Measurement (Porter, 2010) What is the proper unit? All services and activities that jointly determine success in meeting a set of consumer needs. “Integrated practice units”

27. Value Measurement, 2 (Porter, 2010) • Separately for each condition …with other conditions “risk adjusted”. • Not separately by department or billing unit

28. Care Needs in Mental Health…Integrated Care Resource Center(2013)

29. Care Problem in Mental Health…Integrated Care Resource Center (2013)

30. Limits of the System…(Unutzer, 2011)

31. The Experience in Washington…(Unutzer, 2011)

32. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition

33. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition • Define the care delivery value chain (CDVC)

34. 2. Care Delivery Value Chain (Kaplan & Norton, 2011)

35. 2. Care Delivery Value Chain (Kaplan & Norton, 2011)

36. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition • Define the care delivery value chain (CDVC) • Map each activity

37. 3. Map the Process (Kaplan & Porter, 2011)

38. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition • Define the care delivery value chain (CDVC) • Map each activity • Obtain time estimates

39. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition • Define the care delivery value chain (CDVC) • Map each activity • Obtain time estimates • Estimate resource supply cost

40. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition • Define the care delivery value chain (CDVC) • Map each activity • Obtain time estimates • Estimate resource supply cost • Estimate resource capacity; calculate capacity cost rate

41. 5. Capacity Cost Rate(Kaplan & Porter, 2011) ❸ ❶ Capacity Cost Rate for Resourcei = ❷ ❶ ❷ ❶❶❷❷❸❸ ❸ Nurse’s Capacity Cost Rate = $7,280 -:- 112 hrs = $65/hr

42. Costing: The Whole Process (Kaplan & Porter, 2011) • Select the condition • Define the care delivery value chain (CDVC) • Map each activity • Obtain time estimates • Estimate resource supply cost • Estimate resource capacity; calculate capacity cost rate • Calculate total cost

43. 6 Strategic Objectives (Porter, 2012) • Organize system around patient • Measure outcomes and costs • Pay in “bundles” • Affiliate better(less all-service stand-alone) • Expand beyond narrow geographies • Build IT, but not for a broken system

44. Obj. 1: Organize around patient…(Porter,2012)

45. … Throughout Continuum of Care (Porter, 2012)

46. Obj. 2: Measure…the whole chain… (Porter, 2012)

47. …and up and down the hierarchy (Porter, 2012)

48. Obj. 3: Pay in bundles(Porter, 2012) NB 

49. Obj. 4: Affiliate better (Porter, 2012)

50. Obj. 5: Expand… (Porter, 2012)