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TED@BCG Singapore

Stefan Larsson: What doctors can learn from each other

October 10, 2013

Different hospitals produce different results on different procedures. Only, patients don’t know that data, making choosing a surgeon a high-stakes guessing game. Stefan Larsson looks at what happens when doctors measure and share their outcomes on hip replacement surgery, for example, to see which techniques are proving the most effective. Could health care get better -- and cheaper -- if doctors learn from each other in a continuous feedback loop?

Stefan Larsson - Value-based health care advocate
A doctor by training, Stefan Larsson of BCG researches how transparency of medical outcomes and costs could radically transform the healthcare industry. Full bio

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Double-click the English subtitles below to play the video.
Five years ago, I was on a sabbatical,
00:12
and I returned to the medical university
00:14
where I studied.
00:17
I saw real patients and I wore the white coat
00:19
for the first time in 17 years,
00:23
in fact since I became a management consultant.
00:26
There were two things that surprised me
00:30
during the month I spent.
00:32
The first one was that the common theme
00:34
of the discussions we had were hospital budgets
00:36
and cost-cutting,
00:39
and the second thing, which really bothered me,
00:41
actually, was that several of the colleagues I met,
00:43
former friends from medical school,
00:46
who I knew to be some of the smartest,
00:48
most motivated, engaged and passionate people
00:50
I'd ever met,
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many of them had turned cynical, disengaged,
00:54
or had distanced themselves
from hospital management.
00:58
So with this focus on cost-cutting,
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I asked myself, are we forgetting the patient?
01:05
Many countries that you represent
01:09
and where I come from
01:11
struggle with the cost of healthcare.
01:13
It's a big part of the national budgets.
01:15
And many different reforms aim
at holding back this growth.
01:18
In some countries, we have long waiting times
01:22
for patients for surgery.
01:24
In other countries, new drugs
are not being reimbursed,
01:26
and therefore don't reach patients.
01:29
In several countries, doctors and nurses
01:32
are the targets, to some extent, for the governments.
01:34
After all, the costly decisions in health care
01:38
are taken by doctors and nurses.
01:42
You choose an expensive lab test,
01:44
you choose to operate on an old and frail patient.
01:47
So, by limiting the degrees of freedom of physicians,
01:50
this is a way to hold costs down.
01:55
And ultimately, some physicians will say today
01:58
that they don't have the full liberty
02:00
to make the choices they think
are right for their patients.
02:03
So no wonder that some of my old colleagues
02:07
are frustrated.
02:09
At BCG, we looked at this,
02:11
and we asked ourselves,
02:14
this can't be the right way of managing healthcare.
02:16
And so we took a step back and we said,
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"What is it that we are trying to achieve?"
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Ultimately, in the healthcare system,
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we're aiming at improving health for the patients,
02:27
and we need to do so at a limited,
02:31
or affordable, cost.
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We call this value-based healthcare.
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On the screen behind me, you see what we mean
02:38
by value:
02:40
outcomes that matter to patients
02:42
relative to the money we spend.
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This was described beautifully in a book in 2006
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by Michael Porter and Elizabeth Teisberg.
02:50
On this picture, you have my father-in-law
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surrounded by his three beautiful daughters.
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When we started doing our research at BCG,
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we decided not to look so much at the costs,
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but to look at the quality instead,
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and in the research, one of the things
03:09
that fascinated us was the variation we saw.
03:11
You compare hospitals in a country,
03:14
you'll find some that are extremely good,
03:17
but you'll find a large number
that are vastly much worse.
03:19
The differences were dramatic.
03:22
Erik, my father-in-law,
03:24
he suffers from prostate cancer,
03:26
and he probably needs surgery.
03:29
Now living in Europe, he can
choose to go to Germany
03:31
that has a well-reputed healthcare system.
03:34
If he goes there and goes to the average hospital,
03:38
he will have the risk of becoming incontinent
03:41
by about 50 percent,
03:46
so he would have to start wearing diapers again.
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You flip a coin. Fifty percent risk. That's quite a lot.
03:50
If he instead would go to Hamburg,
03:54
and to a clinic called the Martini-Klinik,
03:57
the risk would be only one in 20.
04:00
Either you a flip a coin,
04:03
or you have a one in 20 risk.
04:04
That's a huge difference, a seven-fold difference.
04:06
When we look at many hospitals
04:10
for many different diseases,
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we see these huge differences.
04:13
But you and I don't know. We don't have the data.
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And often, the data actually doesn't exist.
04:19
Nobody knows.
04:21
So going the hospital is a lottery.
04:23
Now, it doesn't have to be that way. There is hope.
04:27
In the late '70s, there were a group
04:31
of Swedish orthopedic surgeons
04:34
who met at their annual meeting,
04:36
and they were discussing the different procedures
04:38
they used to operate hip surgery.
04:40
To the left of this slide, you see a variety
04:43
of metal pieces, artificial hips that you would use
04:45
for somebody who needs a new hip.
04:48
They all realized they had
their individual way of operating.
04:51
They all argued that, "My technique is the best,"
04:54
but none of them actually knew,
and they admitted that.
04:57
So they said, "We probably need to measure quality
05:00
so we know and can learn from what's best."
05:04
So they in fact spent two years debating,
05:08
"So what is quality in hip surgery?"
05:11
"Oh, we should measure this."
"No, we should measure that."
05:13
And they finally agreed.
05:16
And once they had agreed, they started measuring,
05:18
and started sharing the data.
05:20
Very quickly, they found that if you put cement
05:23
in the bone of the patient
05:25
before you put the metal shaft in,
05:27
it actually lasted a lot longer,
05:29
and most patients would never have to be
05:31
re-operated on in their lifetime.
05:33
They published the data,
05:35
and it actually transformed
clinical practice in the country.
05:37
Everybody saw this makes a lot of sense.
05:40
Since then, they publish every year.
05:43
Once a year, they publish the league table:
05:45
who's best, who's at the bottom?
05:47
And they visit each other to try to learn,
05:50
so a continuous cycle of improvement.
05:52
For many years, Swedish hip surgeons
05:56
had the best results in the world,
05:59
at least for those who actually were measuring,
06:01
and many were not.
06:04
Now I found this principle really exciting.
06:06
So the physicians get together,
06:09
they agree on what quality is,
06:11
they start measuring, they share the data,
06:13
they find who's best, and they learn from it.
06:17
Continuous improvement.
06:20
Now, that's not the only exciting part.
06:23
That's exciting in itself.
06:26
But if you bring back the cost side of the equation,
06:28
and look at that,
06:31
it turns out, those who have focused on quality,
06:32
they actually also have the lowest costs,
06:35
although that's not been the purpose
in the first place.
06:37
So if you look at the hip surgery story again,
06:40
there was a study done a couple years ago
06:43
where they compared the U.S. and Sweden.
06:45
They looked at how many patients have needed
06:49
to be re-operated on seven years after the first surgery.
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In the United States, the number was three times
06:55
higher than in Sweden.
06:58
So many unnecessary surgeries,
07:00
and so much unnecessary suffering
07:04
for all the patients who were operated on
07:07
in that seven year period.
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Now, you can imagine how much savings
07:11
there would be for society.
07:12
We did a study where we looked at OECD data.
07:15
OECD does, every so often,
07:18
look at quality of care
07:21
where they can find the data
across the member countries.
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The United States has, for many diseases,
07:28
actually a quality which is below the average
07:30
in OECD.
07:32
Now, if the American healthcare system
07:34
would focus a lot more on measuring quality,
07:36
and raise quality just to the level of average OECD,
07:38
it would save the American people
07:42
500 billion U.S. dollars a year.
07:45
That's 20 percent of the budget,
07:49
of the healthcare budget of the country.
07:52
Now you may say that these numbers
07:55
are fantastic, and it's all logical,
07:57
but is it possible?
08:00
This would be a paradigm shift in healthcare,
08:02
and I would argue that not only can it be done,
08:04
but it has to be done.
08:08
The agents of change are the doctors and nurses
08:10
in the healthcare system.
08:14
In my practice as a consultant,
08:16
I meet probably a hundred or more than a hundred
08:18
doctors and nurses and other hospital
08:21
or healthcare staff every year.
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The one thing they have in common is
08:27
they really care about what they achieve
08:29
in terms of quality for their patients.
08:31
Physicians are, like most of you in the audience,
08:34
very competitive.
08:36
They were always best in class.
08:39
We were always best in class.
08:41
And if somebody can show them that the result
08:44
they perform for their patients
08:47
is no better than what others do,
08:48
they will do whatever it takes to improve.
08:51
But most of them don't know.
08:54
But physicians have another characteristic.
08:56
They actually thrive from peer recognition.
08:59
If a cardiologist calls another cardiologist
09:02
in a competing hospital
09:05
and discusses why that other hospital
09:07
has so much better results, they will share.
09:09
They will share the information on how to improve.
09:11
So it is, by measuring and creating transparency,
09:15
you get a cycle of continuous improvement,
09:19
which is what this slide shows.
09:22
Now, you may say this is a nice idea,
09:25
but this isn't only an idea.
09:28
This is happening in reality.
09:30
We're creating a global community,
09:32
and a large global community,
09:35
where we'll be able to measure and compare
09:37
what we achieve.
09:39
Together with two academic institutions,
09:41
Michael Porter at Harvard Business School,
09:44
and the Karolinska Institute in Sweden,
09:46
BCG has formed something we call ICHOM.
09:48
You may think that's a sneeze,
09:52
but it's not a sneeze, it's an acronym.
09:54
It stands for the International Consortium
09:57
for Health Outcome Measurement.
10:00
We're bringing together leading physicians
10:02
and patients to discuss, disease by disease,
10:05
what is really quality,
10:09
what should we measure,
10:11
and to make those standards global.
10:13
They've worked -- four working groups have worked
10:15
during the past year:
10:18
cataracts, back pain,
10:20
coronary artery disease, which is,
for instance, heart attack,
10:23
and prostate cancer.
10:27
The four groups will publish their data
10:29
in November of this year.
10:31
That's the first time we'll be comparing
10:33
apples to apples, not only within a country,
10:36
but between countries.
10:39
Next year, we're planning to do eight diseases,
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the year after, 16.
10:46
In three years' time, we plan to have covered
10:48
40 percent of the disease burden.
10:51
Compare apples to apples. Who's better?
10:54
Why is that?
10:57
Five months ago,
11:00
I led a workshop at the largest university hospital
11:02
in Northern Europe.
11:05
They have a new CEO, and she has a vision:
11:07
I want to manage my big institution much more
11:11
on quality, outcomes that matter to patients.
11:14
This particular day, we sat in a workshop
11:18
together with physicians, nurses and other staff,
11:22
discussing leukemia in children.
11:25
The group discussed,
11:29
how do we measure quality today?
11:31
Can we measure it better than we do?
11:33
We discussed, how do we treat these kids,
11:36
what are important improvements?
11:38
And we discussed what are
the costs for these patients,
11:40
can we do treatment more efficiently?
11:43
There was an enormous energy in the room.
11:45
There were so many ideas, so much enthusiasm.
11:47
At the end of the meeting,
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the chairman of the department, he stood up.
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He looked over the group and he said --
11:56
first he raised his hand, I forgot that --
12:01
he raised his hand, clenched his fist,
12:02
and then he said to the group, "Thank you.
12:05
Thank you. Today, we're finally discussing
12:08
what this hospital does the right way."
12:11
By measuring value in healthcare,
12:14
that is not only costs
12:16
but outcomes that matter to patients,
12:18
we will make staff in hospitals
12:21
and elsewhere in the healthcare system
12:23
not a problem but an important part of the solution.
12:24
I believe measuring value in healthcare
12:29
will bring about a revolution,
12:31
and I'm convinced that the founder
12:33
of modern medicine, the Greek Hippocrates,
12:35
who always put the patient at the center,
12:39
he would smile in his grave.
12:42
Thank you.
12:44
(Applause)
12:47

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Stefan Larsson - Value-based health care advocate
A doctor by training, Stefan Larsson of BCG researches how transparency of medical outcomes and costs could radically transform the healthcare industry.

Why you should listen

In the developed world, health care represents 9 to 18 percent of the GDP -- and these costs are rising faster than economic growth. Stefan Larsson -- a senior partner and managing director in BCG’s Stockholm office, the global leader of BCG’s Health Care Payers and Providers sector, and a BCG Fellow since 2010 -- believes that the answer isn’t just managing costs, but improving patient outcomes.

The idea at the center of this approach: registries of health outcomes. By coming up with criteria for measuring quality of care, sharing data on how procedures and parts are working, and learning from each other constantly, doctors and nurses can become agents of change, providing better care and lower costs at the same time.

Larsson is co-founder of the International Consortium of Health Outcomes Measurement, a not-for-profit organization for global standardization of outcomes measurement, which has Michael Porter, HBS and Karolinska Institute as partners.

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