Boundaryless Hospital - Rethink and Redefine Health Care Management. New Chains of Value Creation
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1 Boundaryless Hospital - Rethink and Redefine Health Care Management New Chains of Value Creation Sören T. Eichhorst, MD PhD Partner and Head of McKinsey Hospital Institute Cologne, Germany PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited
2 Quantitative network analysis reveals hospital boundaries Number of quotes n = 287 Individual staff Medical unit Functional unit Nursing staff Administration service Administration SOURCE: McKinsey Hospital Akademie McKinsey & Company 1
3 A gap exists between medical evidence and clinical practice Quality aspiration Clinical practice Patient-centered approach Hospitals built around professionals Close exchange of all professionals Suboptimal internal communication Seamless external cooperation Interfaces only partially optimized Outcome-oriented quality initiatives No generally accepted quality metrics No sector boundaries Truly integrated care still a vision McKinsey & Company 2
4 The focus needs to be on value creation Quality VALUE Access Cost McKinsey & Company 3
5 Five major trends for value creation in hospitals 1 Patient experience matters and can be monetized McKinsey & Company 4
6 Patient experience matters Clinical quality Focus on clinical outcome and effectiveness Care delivery Patient experience Focus on perceptions of care Factors influencing a patient s choice of hospital Would you request a hospital if it was distinctive on patient experience? In percent Physician s decision 21 Patient experience In percent Would definitely request Location Hospital reputation Might or might not request 56 SOURCE: 2007 McKinsey survey of >2,000 U.S. patients with commercial insurance or Medicaid and >100 U.S. physicians; McKinsey Hospital Institute McKinsey & Company 5
7 and can be monetized Dimensions of patient experience Impact on hospital recommendation Nurse communication 15 81% 85% Aftercare 15 68% 13% Pain management 10 Noise level 2 Facilities Medication explanation Physician communication National average Improvement of high impact elements Improved recommendation score Best practice recommendation score Responsiveness 0 Hospital recommendation SOURCE: 2007 McKinsey survey of >2,000 U.S. patients with commercial insurance or Medicaid and >100 U.S. physicians; McKinsey Hospital Institute McKinsey & Company 6
8 The way we see patients is changing Today Tomorrow Informed and active patients Prevention and prediction Population based approaches McKinsey & Company 7
9 Five major trends for value creation in hospitals 1 Patient experience matters and will be monetized 2 Value based health care is key and will be paid for McKinsey & Company 8
10 Comprehensive disease pathways are a tool for value creation Primary prevention Diagnosis and screening Treatment/ management of disease Surveillance and follow-up Palliative/ end of life care Focused Specific diseases Condition groups Comprehensive End-to-end Efficacy Cost Prevention to end-of-life care Full range of interventions Evidence-based Comprehensive international evidence base Prioritize how resources are allocated SOURCE: McKinsey Health Systems Institute CRC Improvement Network project team McKinsey & Company 9
11 Levels of cost are distributed across the pathway Cost waterfall tool absolute cost waterfall colorectal cancer improvement network Individual cost buckets Pathway stage total spend McKinsey & Company 10
12 Five major trends for value creation in hospitals 1 Patient experience matters and will be monetized 2 Value based health care is key and will be paid for 3 Health care starts to converge towards a provider-payor-life science continuum 4 5 McKinsey & Company 11
13 Health care starts to converge towards a provider-payer-lifescience continuum Example globally integrated player Fresenius Fresenius Business Units Revenues in percent 100% = 20.4 bn EUR Medical Care - dialysis machines and dialysis centers Helios 17 Vamed 5 Medical Care Kabi - infusion therapy, clinical nutrition and home care Helios - integrated health care provider (hospitals, rehab clinics) Kabi Vamed - consulting, planning, developing and running of health care facilities Netcare - IT services, business processes solutions SOURCE: Fresenius website; McKinsey Hospital Institute McKinsey & Company 12
14 Medtech and Pharma companies use support services to deepen partnerships with providers Hospital needs Business model Example Improve operating margin Debottlenecking and implementation of new clinical pathways Reduce burden on balance sheet Pay-for-usage models Optimize patient referrals Support referral networks McKinsey & Company 13
15 Five major trends for value creation in hospitals 1 Patient experience matters and will be monetized 2 Value based health care is key and will be paid for 3 Health care starts to converge towards a provider-payor-life science continuum 4 New technology will be fully exploited 5 McKinsey & Company 14
16 Full exploitation of new technology Terabyte global medical imaging scan data volume p.a. 8,000,000 million MRT scans in Germany 2 Terabyte raw reads from sequencing 1 human genome 19,000,000,000 claims data sets collected by German payors p.a. McKinsey & Company 15
17 Five predictions for digitalization of health care Patients start to assume more responsibility for their own data Real world will become the norm Sensor data as new source of data surpass digital imaging as biggest data asset Personalized care plans will be faster in the market than personalized medicine Analytical capabilities are necessary to keep up with the champions McKinsey & Company 16
18 Embracing IT solutions creates value Innovative documentation, database search, consulting, training Timely data collection from multiple sources across the health care value chain Handheld apps for transmission of stethoscope sounds, ultrasound, otoscopy, etc. Mobile telehealth platform - medical consultations and triage via any device anywhere globally Wireless sensors allows patient monitoring at ICU-level SOURCE: Press; company websites McKinsey & Company 17
19 Five major trends for value creation in hospitals 1 Patient experience matters and will be monetized 2 Value based health care is key and will be paid for 3 Health care converges towards a provider-payor-life science continuum 4 New technology will be fully exploited 5 Disruptive changes and innovative hospital concepts will appear McKinsey & Company 18
20 ParkinsonNet is an example for a regional initiative driving quality and saving cost Principles 1 Define catchment area or regional hospital 2 Select dedicated therapists 3 4 Track these therapists using guidelines and tell them what to STOP doing Promote communication among them 5 Make them visible 6 Establish 24/7 communication between professionals and patients SOURCE: ParkinsonNet; Prof. B. R. Bloem, Nijmegen Medical center McKinsey & Company 19
21 How could the hospital of the future look like? Today Tomorrow Balanced doctorpatient relationships Up-to-date means of communication Innovative hospital concepts McKinsey & Company 20
22 Value creation opportunities for hospitals Value Redefining health care Embracing benefits of new technology Maximizing value in existing systems Time McKinsey & Company 21
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