Ideas that change health and care | The King's Fund ......CEO, Ramsay Health Care Dr. Claudio Luiz Lottenberg Chairman & President, Hospital Israelita Albert Einstein Prof. Axel Ekkernkamp

Something to Teach, Something to Learn.

Dr Mark Britnell Chairman and Partner Global Health Practice KPMG

1 © 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. This document is confidential and its circulation is restricted. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative, a Swiss entity.

Mark Britnell – 54 countries, 160 occasions.

World Economic Forum, Davos 2012: “The financing of health systems

has increasingly burdened developed economies, which has

been exacerbated by the fiscal crisis. Participants agreed on the drivers of the expenditure growth and, since many of these factors

are unlikely to recede (e.g. ageing, lifestyles, public expectations),

there is a clear need to develop a more sustainable way of

managing health systems. The magnitude of health financing

challenges suggests that incremental solutions may not be enough; however, a shared vision of new models for health systems

does not yet exist.”

Source: The Great Transformation: Shaping New Models – World Economic Forum Annual Meeting Davos 2012

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Changing business operations to realize cost efficiencies

Improving cash and working capital management

Exploiting growth opportunities through successful transactions

Preparing your organization for major business model changes

Managing and retaining the right people within the organization

Addressing risk throughout the organization

Looking for growth in emerging markets

Innovation through product development

Adapting to take into account changing customer and stakeholder behavior

Using information to forecast response to uncertain times

Refinancing or seeking capital

Using technology as a strategic enabler, not just an operational facilitator

Embedding sustainability in the business model

Responding to regulatory change

Seizing opportunities offered by increasing public/private sector interaction

43%

32%

30%

25%

24%

21%

21%

20%

18%

15%

13%

12%

10%

10%

6%

KPMG research: Transaction trumps transformation.

Note: (a) Due to rounding up and down total figure may vary from 300% Source: KPMG ‘Succeeding in a Changing World’ 2012

Total adds up to 300% all respondents had three votes(a)

3,000 CEOs from all industries see the importance of transformational change but focus their attention on short term transactional efficiency.


27%

50%

15%

33%

15%

18%

18%

17%

20%

10%

12%

27%

17%

17%

5%

32%

43%

21%

30%

15%

25%

4%

21%

18%

12%

10%

24%

13%

20%

10% Healthcare Total

Healthcare leaders are even more focused on the urgent issues of today and less on the important ones of tomorrow.

Note: (a) Due to rounding up and down total figure may vary from 300% Source: KPMG ‘Succeeding in a Changing World’ 2012

Total adds up to 300% all respondents had three votes(a)

Healthcare

Improving cash and working capital management

Changing business operations to realize cost efficiencies

Addressing risk throughout the organization

Exploiting growth opportunities through successful transactions

Using information to forecast response to uncertain times

Preparing your organization for major business model changes

Seizing opportunities offered by increasing public/private sector interaction

Looking for growth in emerging markets

Adapting to take into account changing customer and stakeholder behavior

Using technology as a strategic enabler, not just an operational facilitator

Embedding sustainability in the business model

Managing and retaining the right people within the organization

Refinancing or seeking capital

Innovation through product development

Responding to regulatory change


KPMG in Rome, 2012. Over 40 senior executives and clinicians from 22 countries debated major global challenges of today.

Frances Diver Executive Director, Victorian Department of Health

Chris Rex CEO, Ramsay Health Care

Dr. Claudio Luiz Lottenberg Chairman & President, Hospital Israelita Albert Einstein

Prof. Axel Ekkernkamp CEO, Unfallkrankenhaus, Berlin

Glenna Raymond President and CEO Ontario Shores Centre for Mental Health Sciences

Dr. Kevin Smith President and CEO, St. Joseph's Health System

Prof. Shan Wang CEO, Peking University Peoples Hospital

Christian Boel Vice Healthcare President in Region Midtjylland

Filippo Monteleone Managing Director, General de Santé

Prof. Dr. Udo Janssen Chairman, German Hospital Institute

Prof. Anupam Sibal Medical Director, Apollo Hospital

Dr. Terry McWade Deputy CEO, Royal College of Surgeons in Ireland

Carlo Perucci Head of the National Outcomes Programme, National Healthcare Agency

Dr. Giancarlo Ruscitti CEO Fondazione "Opera San Camillo"

Paolo Rolleri Director General IRCCS San Raffaele Pisana – Istituto di Ricovero e Cura a Carattere Scientifico

Dr. Masami Sakoi Planning Policy Director, Ministry of Health, Labour and Welfare

Dr. Chul Lee CEO, Yonsei University Health System

Prof. Dr. Hans Büller CEO, Erasmus Medical Centre

Prof. Dr. Bastiaan Bloem Medical Director, Radboud University Nijmegen Medical Center

Dr. Pieter Hasekamp CEO, Dutch Health Insurers Association (ZN)

Unni Hembre President, European Federation of Nurses Associations (EFN)

Isabel Vaz CEO, Espírito Santo Saúde

Bala Krishnan Director of Development Office of Chairman, Aspetar Scientific Advisory Board

Orsida Gjebrea Senior Policy Advisor, Supreme Council of Health

Prof. Benjamin Ong CEO, National University Health System

Dr Brian Ruff Head of Risk Intelligence and Access Innovating Divisions, Discovery health

Martin Gerber CFO, Universitätsspital Basel

Dr. Jennifer Dixon Director, Nuffield Trust

Sir Ian Carruthers CEO, NHS South of England

Sir Jonathan Michael CEO, Oxford University Hospitals NHS trust

Sir Robert Naylor CEO, University College London Hospitals NHS Foundation Trust

Valerie Michie Global Head of Health, SERCO

Tim Harford Senior Columnist at the FT and Author of Adapt: Why Success Always Starts with Failure

Sir Bruce Keogh Medical Director of the NHS and NHS Commissioning Board

Gary Kaplan CEO, Virginia Mason Medical Center

Dr. Arthur Southam Executive Vice President, Kaiser Permanente

Ron Williams Former Chair & CEO of Aetna Inc. and member of President Obama’s Management Advisory Board

Anne McElvoy Public Policy Editor, The Economist

Paul Cummings Director of Finance, Northern Ireland Health and Social Care Board

Lord Nigel Crisp Independent Crossbench Member of the House of Lords


The paradox.

Most people believe that their health sectors need substantial change but think their own organisational plans are robust.

They can’t all be right. Transformational changes requires the majority to have a new vision. That's why change is hard.

Focus remains on transactional change not transformational reforms.

Leading hospitals, health plans and life sciences executives believe their

business models are ‘somewhat sustainable’

Source: Transforming Healthcare: From Volume to Value – New Research on Emerging Business Models KPMG 2012

8% 8% 17%

25% 20% 19%

40% 53% 43%

18% 18% 20%

9% 2% 2%

HC Systems (104) Health Plans (51) Pharma (54) Not at all sustainable Not very sustainable Somewhat sustainable Very sustainable Extremely sustainable

Sustainability of current business models over next 5 years:

From volume to value (USA):

But they don’t feel their industries will stay the same…

…with moderate to major change coming in their

sectors

65%

41% 24%

33%

53%

63%

2% 4% 13%

HC Systems (104) Health Plans (51) Pharma (54) Minor changes Moderate changes Major changes

Extent of changes to your industry over next 5 years:

Source: Transforming Healthcare: From Volume to Value – New Research on Emerging Business Models KPMG 2012


Healthcare leaders in Rome also demonstrate the paradox.

‘Most (75%) think that current business models are somewhat sustainable but almost all (95%) expect moderate (30%) or major (65%) business model change in the sector’

Question – The current business models operated by hospitals are:

Somewhat sustainable

Question – How much change do you expect to see in the shape of the

provider system and in their business models in the next 5 years?

Major changes

Source: Pre-conference survey Something to teach, Something to learn, KPMG Rome 2012


Active strategies to manage are transactional.

Question – Which strategies are

providers likely to adopt to respond to

these changes?

Major cost reduction

Lean and improvement methods

More focus and specialisation

Investment in Health IT

New workforce models

Extra income from existing payers

85%

81%

82%

78%

74%

44%



…..but they expect payment systems to focus more on quality, value and risk.

Question – I expect payment systems to:

Become more integrated

Contain more quality incentives

Focus more on patient value

Share more risk with providers

Reduce prices & cap volumes

Remain largely the same

78%

78%

74%

74%

55%

11%


They do believe integrated care will..

Source: Pre-conference survey Something to teach, something to learn, KPMG Rome 2012

…offer new possibilities for quality and cost

Reduce costs (75%)

Improve outcomes

(90%)


Consensus on major trends.

Payers are becoming ‘activist’.

Some hospitals are transforming into health systems.

Patients becoming active partners.

High growth health systems, providing new perspectives on health reform.

Innovative integration and partnership.

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2

3

4

5


Passive funder to activist payer.

Make the organisation capable of contracting for outcomes and value.

Find new ways to connect with – and empower – patients.

Increase focus on the management of overall population health, ‘moving care upstream’.

Information, segmentation and stratification.

Delivery must be integrated and coordinated.

Payment reform is key; from volume to value.


Providers: Transact or transform?

In spite of fiscal crisis, many providers are still healthy and solvent. Uneven momentum for change.

All face big strategic question – ‘do things better or do better things?’

Much to be done operationally: Lean, workforce, care system re-design, clinical informatics and quality improvement at scale e.g.

Intermountain, Virginia Mason, Buurtzorg, Salford.

Some hospitals are transforming into ‘health systems’ through integration or acquisition e.g. Geisinger, Apollo, Saskatchewan (Canada), Albert Einstein, Brazil.

Some become narrow and focus using Lean, e.g. Aravind, Narayana Hrudayalaya, Fortis and Coxa in Finland.

For some M&A and new international markets offer growth e.g. Ramsay, Fortis, SECOM, Netcare.


Patients as partners:

Patients are no longer passive recipients and new systems and ways of working are required to

manage this change.

It has taken a decade for us to realize that better care is usually less expensive care.

It will take another decade for us to realize that patients are partners – either creating or compromising value.

Techniques that allow patients to create more value include: shared decision making; Al Mulley’s ‘preference misdiagnosis’; amplified patient voice; informed care and (internet) coaching.

End of life care and chronic care are the most important immediate areas to create better value.

Tools that patients need to control and secure better value include: pathways, records, decision aids, social networks and technology e.g.

PatientsLikeMe.


From God to Guide – ParkinsonNet:

5 design criteria:

Helping to create an active patient able to manage their care and take key decisions

Defining what value based care would look like from the perspective of the patient

Changing the way that doctors and other clinicians work with patients by shifting to a

partnership approach with patients

Creating a network of experts

Linking all of these together with information technology tools

Bas Bloem created ParkinsonNet: a revolutionary partnership approach involving Parkinson’s patients in the Netherlands, has led to a 50% reduction in associated hip fractures and €20 million worth of savings.


High growth countries.

‘Something to teach, something to learn’’ isn’t a new form of Western Imperialism.

High growth countries and emerging markets can be characterised by 3 words: speed, buzz and leapfrog.

Many still have under-developed primary care platforms but entrepreneurs see this as ‘white space’.

Much greater reliance on technology, smart operational processes and public-private partnerships.

Growing middle class with increase in NCDs demands leap-frog over 20th century care models.

Asia, Africa and South-America all developing low-cost delivery models and point-of-care diagnostics. Reverse innovation.


Leaders in Rome identified 10 characteristics:

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2

3

4

5

6

7

8

9

10

Enduring Values

Shared purpose

Consistent and stable leadership

Deep engagement with clinical staff

Strong focus on front-line

Set culture, hold professionals to account

Align individual, team and organisational objectives

Information transparency – internal and external

Curiosity about high performance

Authentic partnership

Coming soon...

Global perspectives on clinical governance

This document is CONFIDENTIAL and its circulation and use are RESTRICTED. © 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Printed in the United Kingdom.

The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).

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Ideas that change health and care | The King's Fund ......CEO, Ramsay Health Care Dr. Claudio Luiz Lottenberg Chairman & President, Hospital Israelita Albert Einstein Prof. Axel Ekkernkamp