As health-care costs climb ever upward, controlling expenses without sacrificing high-quality care becomes increasingly important. Payment systems based on the value of care are emerging as a way to combat rising costs.
Many researchers like Jason Wang, an associate professor of pediatrics and a Stanford Health Policy core faculty member, have found that bundled payment systems may help health-care institutions achieve better value of care.
In a new study in the Journal of the American Medical Association Oncology, Wang and his co-authors show that a value-based bundled payment system is associated with cost containment and improvement in care, even improving chances for survival.
The study examined Taiwan’s bundled pay-for-performance (PFP) system for breast cancer. Instead of the traditional fee-for-service (FFS) system that is typical in the United States — in which every test, surgery and exam is billed individually — this system includes all aspects of treatment in a single established cost, or bundled payment.
Based on guidelines set by Taiwan’s National Health Insurance Administration (NHIA), the pilot program reimbursed health-care institutions’ costs for breast cancer treatment based on the patient’s cancer stage, 0 to IV. Institutions that exceeded the NHIA’s standards received a financial bonus as an incentive for better performance.
The study followed 4,215 patients in the bundled-care system over a five-year period, comparing the quality of their care, the cost of their treatment and the outcomes of their treatment to 12,506 similar patients in the traditional FFS system.
The authors found that patients in the bundled-payment system received better care throughout treatment, were more likely to survive, and contained medical costs over time, compared to their peers in the FFS system.
Costs for patients in the bundled payment system remained about the same throughout the study. However, the cost of treatment for those in the FFS system steadily increased throughout the study period. By the end, even health-care institutions receiving the maximum bonus incentive would incur lower costs than those in the FFS system.
Yet even though their treatment was cheaper, patients in the bundled system experienced better results. Patients using the bundled system had significantly higher survival rates for cancer stages 0 to III, and they were more likely to receive higher quality care based on quality indicators.
This is largely due to the better coordination of care made necessary by the bundled system, according to Wang.
“When you play in an orchestra, the whole group needs to play together, so it plays the right tune,” said Wang. “Focusing on value for the patient and the health-care system forces people to play the same tune.”
Wang believes the lessons learned from Taiwan’s program could be applied in other parts of the world, including the United States, which is currently moving toward bundled cancer care.
Though the U.S. already bundles care for conditions like appendicitis and chemotherapy — in which costs are fairly predictable — many hospital administrators fear that broadening the use of bundled payments for more complex conditions is too risky, financially.
Wang does not share their misgivings.
“People say, ‘We can’t do this for a very complex disease.’ It’s not true,” he said. “When we went outside of the U.S., we started to find systems that work.”
Wang found that when institutions can coordinate care for patients — that is, when a single institution manages all aspects of a patient’s care — the patient is more likely to have better outcomes.
“If institutions take the leadership of providing the infrastructure to coordinate care, they can really deliver better care with the same or lower costs.”
There are benefits for the institutions, too. Right now, because health insurance providers may accept or reject particular costs in an unpredictable way, care institutions never know how much they’re going to get paid for a service. But in a bundled payment system, costs are much more stable and revenue easier to predict.
Considering the benefits, Wang hopes the Taiwan breast cancer study will show institutions in the United States and around the world that bundled payments for cancer can be done on a broad scale.
A long line of research has shown that women live longer than men, yet according to Karen Eggleston, director of the Asia Health Policy Program, and four other Stanford health researchers, mortality rate differences between men and women are much more variable than previously thought, following predictable patterns. Life expectancy differs depending on time, location and socioeconomic circumstance, not on biological factors alone, according to their newly published findings.
The researchers found that women have greater resilience when faced with socioeconomic adversity in a developing country—living nearly 10 years longer than men on average—but this pattern changes as the country evolves. Developed countries typically have smaller gaps in mortality rates between men and women than developing countries do.
Japan and South Korea are outliers, however, with higher mortality rate differences between men and women than is average for developed countries. In addition to the prevalence of male smoking, one possible explanation they draw is the lack of career-related opportunities for women in Japan and South Korea, two countries that have low gender wage equity among Organisation of Economic Co-operation and Development members.
Eggleston, who is part of the core faculty at the Shorenstein Asia-Pacific Research Center, et al. suggested the idea that reducing gender inequality may help narrow the mortality gap: men increase years lived when fewer barriers for women exist, but concluded that their findings supporting this conclusion merit further inquiry.
Their findings were published in the August edition of SSM – Population Health and highlighted in an earlier column on Voxeu.
As he explained during the recent Rosenkranz Prize Symposium, Stefano M. Bertozzi used this slogan to promote health reform in the Mexico City prison system. By encouraging inmates to step up and get themselves tested for HIV and other chronic illnesses, Bertozzi, dean and professor of health policy and management at the UC Berkeley School of Public Health, was able to decrease the spread of illnesses in Mexican prisons and the surrounding communities.
The Rosenkranz Prize Symposium celebrated research projects that—like Bertozzi’s—address the health care needs of the world’s most vulnerable populations. With support from the Rosenkranz Prize for Health Care Research in Developing Countries, Stanford scholars have stepped up to tackle health issues in regions in need.
Since 2010, the award has funded six young Stanford researchers who aim to improve health in developing countries. The symposium celebrated their achievements.
The award honors the work of Dr. George Rosenkranz who spent his career reducing health disparities around the globe. Rosenkranz, who was the first to synthesize cortisone and the active ingredient in the first oral contraceptive, also celebrated his 100th birthday at the symposium.
Producing research that will increase care for vulnerable populations globally is the ultimate goal of the Rosenkranz Prize.
Andrés Moreno-Estrada, the 2012 winner, has used the award to study genetics in Latin American and Caribbean populations, aiming to increase knowledge of potential genetic illnesses. He said, “The Rosenkranz Prize is a clear, important step forward to demonstrate that we can do cutting edge science in developing countries that is of international relevance.”
Other winners include Eran Bendavid, Sanjay Basu, Marcella Alsan, Jason Andrews and Ami Bhatt. Their projects range from the effect of AIDS relief efforts on health care delivery to the treatment of diabetes in India to low-cost diagnostic tools for regions lacking infrastructure.
“I can’t think of a better way to celebrate (my father’s) birthday than listening to the bright future of science,” said Ricardo T. Rosenkranz, son of Dr. George Rosenkranz and a prize donor. “We can’t wait to hear what the next Rosenkranz Prize winners tell us.”
Sex differences in mortality vary over time and place as a function of social, health, and medical circumstances. The magnitude of these variations, and their response to large socioeconomic changes, suggest that biological differences cannot fully account for sex differences in survival. Drawing on a wide swath of mortality data across countries and over time, we develop a set of empiric observations with which any theory about excess male mortality and its correlates will have to contend. We show that as societies develop, M/F survival first declines and then increases, a “sex difference in mortality transition” embedded within the demographic and epidemiologic transitions. After the onset of this transition, cross-sectional variation in excess male mortality exhibits a consistent pattern of greater female resilience to mortality under socio-economic adversity. The causal mechanisms underlying these associations merit further research.
This event has reached capacity. Please join us to watch the live-stream at this link.
The symposium will focus on the key questions that impact health through the year 2020. How could the 2016 election affect health care in the U.S.? How will payment reform affect health systems, physicians and patients? Are the insurance exchanges viable? What challenges pose the biggest threat to global health? Experts from Stanford and beyond address these topics and more as they discuss the future of health policy.
Lloyd Minor, Dean, Stanford University School of Medicine
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Minor, MD, is a scientist, surgeon and academic leader. He is the Carl and Elizabeth Naumann Dean of the Stanford University School of Medicine, a position he has held since December 2012. Minor leads more than 1,500 faculty and 1,000 students at the oldest medical school in the West and has made precision health — the prevention of disease before it strikes — a hallmark of research, education and patient care at Stanford Medicine.
Bob Kocher,a partner at the Silicon Valley venture capital firm, Venrock
Bob Kocher
Kocher, MD, is a partner at Venrock who focuses on healthcare IT and services investments and is a consulting professor at Stanford University School of Medicine. He served in the Obama Administration as special assistant to the president for health care and economic policy and was one of the key shapers of the Affordable Care Act.
David Entwistle, President and CEO, Stanford Health Care
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Entwistle joined Stanford Health Care as its President and CEO in July, bringing extensive executive experience at leading academic medical centers. Most recently he served as CEO of the University of Utah Hospitals & Clinics, the only academic medical center in the Intermountain West region. While serving at UUHC, Entwistle received the Modern Healthcare “Up and Comers Award,” for significant contributions in health-care administration, management or policy.
Chris Dawes, President and CEO, Lucile Packard Children’s Hospital
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Christopher G. Dawes became President and Chief Executive Officer of Lucile Packard Children’s Hospital Stanford in 1997 after five years of service as Chief Operating Officer. Under his guidance, the hospital, research center and regional medical network has been ranked as one of the best in the nation, as an industry leader in patient safety and innovation in providing a full complement of services for children and expectant mothers.
Panelists:
Marcella Alsan, Assistant Professor of Medicine, Stanford University
Marcella Alsan’s research focuses on the relationship between health and socioeconomic disparities with a focus on infectious disease. Another vein of research focuses on the microfoundations of antibiotic overuse and resistance. She received a BA degree in cognitive neuroscience from Harvard University, a master’s degree in international public health from Harvard School of Public Health, a medical degree from Loyola University, and a PhD in economics from Harvard University. She is board-certified in both internal medicine and infectious disease. She trained at Brigham and Women’s Hospital, completing the Hiatt Global Health Equity Residency Fellowship in internal medicine. She combined her PhD with an Infectious Disease Fellowship at Massachusetts General Hospital. She currently is an infectious disease specialist at the Department of Veterans Affairs, Palo Alto.
Laurence Baker, Chair of Health Research and Policy, Stanford University
Laurence Baker is an economist interested in the organization and economic performance of the U.S. health-care system, and his research has investigated a range of topics including financial incentives in health care, competition in health-care markets, health insurance and managed care and health-care technology adoption. Baker is a past recipient of the ASHE medal from ASHEcon and the Alice Hersch Award from AcademyHealth. He received his BA from Calvin College, and his MA and PhD in economics from Princeton University.
Eran Bendavid, Assistant Professor of Medicine, Stanford University
Eran Bendavid is an infectious diseases physician. His research interests involve understanding the relationship between policies and health outcomes in developing countries. He explores how decisions about foreign assistance for health are made, and how those decisions affect the health of those whom assistance aims to serve. Dr. Bendavid is also a disease modeler, and uses that skill to explore issues of resource allocation in low and middle-income countries with cost-effectiveness analyses. His recent research projects include an impact evaluation of the US assistance program for HIV in Africa, and an exploration of the association between drug prices, aid and health outcomes in countries heavily affected by HIV.
Jay Bhattacharya, Professor of Medicine, Stanford University
Jay Bhattacharya’s research focuses on the constraints that vulnerable populations face in making decisions that affect their health status, as well as the effects of government policies and programs designed to benefit vulnerable populations. He has published empirical economics and health services research on the elderly, adolescents, HIV/AIDS and managed care. Most recently, he has researched the regulation of the viatical-settlements market (a secondary life-insurance market that often targets HIV patients) and summer/winter differences in nutritional outcomes for low-income American families. He is also working on a project examining the labor-market conditions that help determine why some U.S. employers do not provide health insurance.
M. Kate Bundorf, Associate Professor of Medicine, Stanford University
M. Kate Bundorf is a Faculty Research Fellow at the National Bureau of Economic Research. She received her M.B.A. and M.P.H. degrees from The University of California at Berkeley and her Ph.D. from The Wharton School. She was a Fulbright Lecturer and Visiting Professor at Fudan School of Public Health in Shanghai, China in 2009 and 2010. Her research, which focuses on health insurance markets, has been published in leading economics and health policy journals and has received funding from the U.S. National Institutes of Health, the Agency for Health Care Research and Quality and the Robert Wood Johnson Foundation. She received the 13th Annual Health Care Research Award from The National Institute for Health Care Management in 2007.
David Chan, Assistant Professor of Medicine, Stanford University
David Chan is a physician and economist whose research focuses on productivity in US health care. His research draws on insights from labor and organizational economics. He is particularly interested in studying what drives physician behavior, how this explains differences in productivity in health care delivery, and what the implications are for the design of health care. He is the recipient of the 2014 NIH Director’s High-Risk, High-Reward Early Independence Award to study the optimal balance of information in health information technology for patient care. David Chan is also an investigator at the Department of Veterans Affairs and a Faculty Research Fellow at the National Bureau of Economic Research.
Kathryn M. McDonald, Executive Director of the Center for Health Policy and the Center for Primary Care and Outcomes Research, Stanford University
Kathryn McDonald, MM, is the Executive Director of the Center for Health Policy (CHP) and Center for Primary Care and Outcomes Research (PCOR) and a senior scholar at the Centers. She is also Associate Director of the Stanford-UCSF Evidence-based Practice Center (under RAND). Her work focuses on measures and interventions to achieve evidence-based patient-centered healthcare quality and patient safety. Mrs. McDonald has served as a project director and principal investigator on a number of research projects at the Stanford School of Medicine, including the development and ongoing enhancement of the Quality and Patient Safety Indicators for the Agency for Healthcare Research and Quality. She has authored numerous peer reviewed articles and government reports, including several with wide enough followership to merit recent updates: Care Coordination Measures Atlas, Closing the Quality Gap, and Patient Safety Practices.
Michelle Mello, Professor of Law and of Health Research and Policy, Stanford University
Michelle Mello is Professor of Law at Stanford Law School and Professor of Health Research and Policy at Stanford University School of Medicine. She conducts empirical research into issues at the intersection of law, ethics, and health policy. She is the author of more than 150 articles and book chapters on the medical malpractice system, medical errors and patient safety, public health law, research ethics, the obesity epidemic, pharmaceuticals, and other topics. From 2000 to 2014, Dr. Mello was a professor at the Harvard School of Public Health, where she directed the School’s Program in Law and Public Health. In 2013-14 she completed a Lab Fellowship at Harvard University’s Edmond J. Safra Center for Ethics. Dr. Mello teaches courses in torts and public health law. She holds a J.D. from the Yale Law School, a Ph.D. in Health Policy and Administration from the University of North Carolina at Chapel Hill, an M.Phil. from Oxford University, where she was a Marshall Scholar, and a B.A. from Stanford University. In 2013, she was elected to the National Academy of Medicine (formerly known as the Institute of Medicine).
Grant Miller, Associate Professor of Medicine, Stanford University
Grant Miller is Director of the Stanford Center for International Development, an Associate Professor of Medicine at the Stanford University School of Medicine, a Core Faculty Member at the Center for Health Policy/Primary Care and Outcomes Research, a Senior Fellow at the Freeman Spogli Institute for International Studies (FSI) and the Stanford Institute for Economic Policy Research (SIEPR), and a Research Associate at the National Bureau of Economic Research (NBER). His primary interests are health economics, development economics, and economic demography. As a health and development economist based at the Stanford Medical School, Dr. Miller’s overarching focus is research and teaching aimed at developing more effective health improvement strategies for developing countries. His agenda addresses three major interrelated themes. (1) First, what are the major causes of population health improvement around the world and over time? (2) Second, what are the behavioral underpinnings of the major determinants of population health improvement? (3) Third, how can programs and policies use these behavioral insights to improve population health more effectively?
Douglas K. Owens, Director of the Center for Health Policy and the Center for Primary Care and Outcomes Research, Stanford University
Douglas K. Owens, MD, MS, is the Henry J. Kaiser, Jr., Professor at Stanford University, where he is a professor of medicine. He is director of the Center for Health Policy in the Freeman Spogli Institute for International Studies and director of the Center for Primary Care and Outcomes Research (PCOR) in the Department of Medicine. He is a general internist and associate director of the Center for Innovation to Implementation at the Veterans Affairs Palo Alto Health Care System. A past member of the U.S. Preventive Services Task Force, he has helped lead the development of national U.S. guidelines on screening for HIV, hepatitis C, hepatitis B, lung cancer, colorectal cancer, breast cancer, and use of aspirin and statins to prevent cardiovascular disease.
Maria Polyakova, Assistant Professor of Health Research and Policy, Stanford University
Maria Polyakova, PhD, is an Assistant Professor of Health Research and Policy at the Stanford University School of Medicine. Her research investigates questions surrounding the role of government in the design and financing of health insurance systems. She is especially interested in the relationships between public policies and individuals’ decision-making in health care and health insurance, as well as in the risk protection and re-distributive aspects of health insurance systems. She received a BA degree in Economics and Mathematics from Yale University and a PhD in Economics from MIT.
David M. Studdert, Professor of Medicine and of Law, Stanford University
David M. Studdert is a leading expert in the fields of health law and empirical legal research. His scholarship explores how the legal system influences the health and well-being of populations. A prolific scholar, he has authored more than 150 articles and book chapters, and his work appears frequently in leading international medical, law and health policy publications. Professor Studdert has received the Alice S. Hersh New Investigator Award from AcademyHealth, the leading organization for health services and health policy research in the United States. He was awarded a Federation Fellowship (2006) and a Laureate Fellowship (2011) by the Australian Research Council. He holds a law degree from University of Melbourne and a doctoral degree in health policy and public health from the Harvard School of Public Health.
The Asia Health Policy Program at Stanford’s Shorenstein Asia-Pacific Research Center, in collaboration with scholars from Stanford Health Policy's Center on Demography and Economics of Health and Aging, the Stanford Institute for Economic Policy Research, and the Next World Program, is soliciting papers for the third annual workshop on the economics of ageing titled Financing Longevity: The Economics of Pensions, Health Insurance, Long-term Care and Disability Insurance held at Stanford from April 24-25, 2017, and for a related special issue of the Journal of the Economics of Ageing.
The triumph of longevity can pose a challenge to the fiscal integrity of public and private pension systems and other social support programs disproportionately used by older adults. High-income countries offer lessons – frequently cautionary tales – for low- and middle-income countries about how to design social protection programs to be sustainable in the face of population ageing. Technological change and income inequality interact with population ageing to threaten the sustainability and perceived fairness of conventional financing for many social programs. Promoting longer working lives and savings for retirement are obvious policy priorities; but in many cases the fiscal challenges are even more acute for other social programs, such as insurance systems for medical care, long-term care, and disability. Reform of entitlement programs is also often politically difficult, further highlighting how important it is for developing countries putting in place comprehensive social security systems to take account of the macroeconomic implications of population ageing.
The objective of the workshop is to explore the economics of ageing from the perspective of sustainable financing for longer lives. The workshop will bring together researchers to present recent empirical and theoretical research on the economics of ageing with special (yet not exclusive) foci on the following topics:
Public and private roles in savings and retirement security
Living and working in an Age of Longevity: Lessons for Finance
Defined benefit, defined contribution, and innovations in design of pension programs
Intergenerational and equity implications of different financing mechanisms for pensions and social insurance
The impact of population aging on health insurance financing
Economic incentives of long-term care insurance and disability insurance systems
Precautionary savings and social protection system generosity
Elderly cognitive function and financial planning
Evaluation of policies aimed at increasing health and productivity of older adults
Population ageing and financing economic growth
Tax policies’ implications for capital deepening and investment in human capital
The relationship between population age structure and capital market returns
Evidence on policies designed to address disparities – gender, ethnic/racial, inter-regional, urban/rural – in old-age support
The political economy of reforming pension systems as well as health, long-term care and disability insurance programs
Submission for the workshop
Interested authors are invited to submit a 1-page abstract by Sept. 30, 2016, to Karen Eggleston at karene@stanford.edu. The authors of accepted abstracts will be notified by Oct. 15, 2016, and completed draft papers will be expected by April 1, 2017.
Economy-class travel and accommodation costs for one author of each accepted paper will be covered by the organizers.
Invited authors are expected to submit their paper to theJournal of the Economics of Ageing. A selection of these papers will (assuming successful completion of the review process) be published in a special issue.
Submission to the special issue
Authors (also those interested who are not attending the workshop) are invited to submit papers for the special issue in the Journal of the Economics of Ageing by Aug. 1, 2017. Submissions should be made online. Please select article type “SI Financing Longevity.”
About the Next World Program
The Next World Program is a joint initiative of Harvard University’s Program on the Global Demography of Aging, the WDA Forum, Stanford’s Asia Health Policy Program, and Fudan University’s Working Group on Comparative Ageing Societies. These institutions organize an annual workshop and a special issue in the Journal of the Economics of Ageing on an important economic theme related to ageing societies.
Bob Kocher
