Value scan of a care pathway

One of the new financing models that is exciting considerable interest in the healthcare sector is value-based healthcare. In order to obtain a better overview of the value created by and the costs of a treatment, you no longer look at each individual contribution, but at the patient’s entire care pathway, from diagnosis to follow-up. The care pathway that Vlerick, KU Leuven, UZ Leuven and Medtronic are subjecting to a ‘value scan’ is scoliosis surgery.

Medtronic Prime Foundation Partnership
Karel Jacobs (UZ Leuven), dr Lieven Moke (UZ Leuven), prof Filip Roodhooft (Vlerick) and prof Lennart Scheys (IORT KU Leuven).

The ageing population means that there are more and more chronic patients with spinal column deformities who require treatment and possibly a surgical procedure. “However there is currently no reliable overview of the true cost associated with this treatment”, notes Ruben Cornelis, Business Manager Spine/Pain at Medtronic. “With this project, based on the UZ Leuven and Vlerick methodology, we are going to link the (potentially hidden) costs of the various different steps in the care pathway to UZ Leuven’s standardised approach. From this, we hope to distil the foundations for a new financial model. Moreover, this is also one of the reasons why the producer and distributor of medical equipment is establishing a Prime Foundation Partnership with Vlerick.”

Value-driven healthcare according to Kaplan & Porter
Value is defined as the health outcomes achieved that matter to patients relative to the cost of achieving those outcomes. 

Patient outcome      =       Patient value
Patient cost 

Lieven Moke (UZ Leuven)As partners, KU Leuven and UZ Leuven are closely involved in this research. “Within KU Leuven’s Orthopaedic Institute (IORT), there are currently a number of doctoral research projects underway through which we are seeking to record and measure the outcome for the patient – the numerator in Kaplan & Porter’s formula – more appropriately”, explains spinal column surgeon Dr Lieven Moke. “But at the moment, the cost estimate – the denominator of the formula – is still too narrowly focused on the question: how much does this treatment cost our government or insurance institutions? There is insufficient knowledge of the costs associated with an integrated care pathway.”

“If we wish to increase the value for the patient throughout the care pathway, then we need to gain greater and better insight into the parameters that determine the outcome for the patient and the associated costs. UZ Leuven is making the data and the current cost forecast system available. Together with Vlerick, we are looking at where we can improve our cost forecast system. As a new doctoral student at KU Leuven, our Care Programme Manager Karel Jacobs will process the data and consider how we can identify and optimise the costs within the care pathway for spinal column deformities. In the first instance, we are applying this scientific research within the IORT in collaboration with Professor Lennart Scheys, but our firm intention is to apply this in other departments within UZ Leuven. Moreover, it is not unthinkable that, in a few year’s time, the principles of value-based healthcare will be part of our medical students’ curriculum.”

“There is insufficient knowledge of the costs associated with an integrated care pathway” Doctor Lieven Moke, UZ Leuven

Healthcare and accounting & finance

In this research project, Vlerick is applying the subject areas of accounting & finance and service operations management to the focus area of healthcare. Specifically, two professors will be joining forces to work on this: Professor Filip Roodhooft (Accounting & Finance and Research Dean) and Professor Brecht Cardoen (Head of the Vlerick Research Centre for Hospitals MINOZ).

Walter Van Dyck (Vlerick Business School)The study will take place within the Vlerick Healthcare Management Centre, which is run by Professor Walter Van Dyck: “In the same way that a doctor often works with a case, we are setting up this research around the case of scoliosis surgery”, explains Professor Van Dyck. “We will measure the health-economic and commercial impact on the system of a new technology on the one hand, and a better flow throughout the care pathway on the other. We will not be making a judgement about the quality for the patient (patient outcome), as this is a doctor’s task. It is our job to quantify the cost effectiveness of the treatment. After all, technology can be highly advanced, but also unaffordable.”

“Our case is spinal column surgery” Professor Walter Van Dyck

Time-driven, activity-based costing

Filip Roodhooft (Vlerick Business School)Professor Filip Roodhooft explains the methodology: “Traditionally, our hospitals were regulated by the government for their cost analysis. This analysis does not get us very far if we have to apply it to value-based healthcare. We no longer calculate the cost per individual contribution, but per patient. To this end, we need to bring all the activities that take place during the care pathway into the picture, and examine which resources (people and funds) are needed for them. The method that we apply – time-driven, activity-based costing – not only allows us to see how and where we can reduce costs, but also what effect an intervention into the costs can have on the quality and value for the patient.”

“We no longer calculate the cost per individual contribution, but per patient” Professor Filip Roodhooft

Envelope financing

How does the government view a study like this one? “The government does show an interest”, Doctor Moke confirms. “The reforms brought in by Minister for Health Maggie De Block were partly prompted by the principles of value-based healthcare. The government is currently working on a kind of envelope financing for pathology with low variable care. But given that the government is basing this on insights gleaned over the past ten years, there is a high chance that the envelope will continue to be inadequate. The model from this study can also help the government to estimate these envelopes more accurately, based on the value for the patient which is focused on evidence-based practice.”

Rigour, relevance and reach

The social relevance of the study is clear. “Vlerick is particularly delighted with this joint initiative”, Professor Roodhooft resolutely concludes. “Together with KU Leuven/UZ Leuven and an international medical technology player, Medtronic, we are setting up a research project in which we will be doing real justice to the ‘3 Rs’ from our research for companies, namely rigour, relevance and reach.”