Value Management in Healthcare ─ How to Establish a Value Management Office to Support Value-based Outcomes in Healthcare

Our current healthcare system's broken. The Organization for Economic Co-Operation and Development (OECD) predicts health care costs could increase from 6% to 14% of GDP by 2060. The cause of this increase is due to (1) a global aging population, (2) growing affluence, (3) rise in chronic diseases, and (4) better-informed patients; all of which raises the demand for healthcare.

In 2006, Michael Porter and Elizabeth Teisberg authored the book ‘Redefining Health Care: Creating Value-Based Competition on Results.' In it, they present their analysis of the root causes plaguing the health care industry and make the case for why providers, suppliers, consumers, and employers should move towards a patient-centric approach that optimizes value for patients. According to Porter, "value for patients should be the overarching principle for our broken system." Since 2006, Mr. Porter, accompanied by his esteemed Harvard colleague, Robert Kaplan, have worked tirelessly to promote this new approach and pilot it with leading healthcare delivery organizations like Cleveland Clinic, Mayo Clinic, MD Anderson, and U.S. Department of Veteran Affairs. Given the current state of global healthcare, there is urgency to achieve widespread adoption of this new approach. The intent of this book is to equip all healthcare delivery organizations with a guide for putting the value-based concept into practice.

This book defines the practice of value-based health care as Value Management. The book explores Mr. Porter's Value Equation (Value = Costs/Outcomes), which is central to Value Management, and provides a step-by-step process for how to calculate the components of this equation. On the outcomes side, the book presents the Value Realization Framework, which translates organizational mission and strategy into a comprehensive set of performance measures and contextualizes the measures for healthcare delivery. On the costs side, the book details the Harvard endorsed time-driven activity based costing (TDABC) methodology, which has proven to be a modern catalyst for defining HDO costs. Finally, this book covers the need and a plan to establish a Value Management Office to lead the delivery transformation and govern operations.

This book is designed in a format where any organization can read it and acquire the fundamentals and methodologies of Value Management. It is intended for healthcare delivery organizations in need of learning the specifics of achieving the implementation of value-based healthcare.

Nathan Tierney began his career as a U.S. Navy Rescue Swimmer in 1993 and was awarded our nation’s highest peacetime award for Heroism for an at-sea rescue. After five years of distinguished service in the Navy, he was selected for transfer and served 14 years as a Warrant Officer in the Army, where his exceptional motivation and integrity propelled him to excellence in Special Operations. Twice nominated for White House Fellowship, he authored various policies on behalf of Veterans, and the Returning Warriors to the Workplace Initiative. His military career culminated as the Chief of Standardization and leading the technological development, implementation, marketing, and sales of a $250 million change management program for over 29,000 personnel to create a Common Operating Picture (COP), and shift the organization towards a knowledge-centric culture. The interoperable technology solution enhanced situation awareness by providing real-time personnel and equipment status, secure communication, health information and predictive modeling to improve decision-making. While serving in the military, Nathan received numerous awards for his dedication and heroism, including: Navy-Marine Corps Medal for Heroism (highest peacetime award), and White House Fellowship Nominee (2011 & 2012).

After his service in the military, he continued this record of achievement in the private sector. He has provided concrete strategies, technical metrics and advising, tactical planning, and the standardization of processes for improvement throughout the last years within various companies, including: Strategos LLC, Windhaven Insurance, and Clutch Analytics. More recently, he has further dedicated his life to those in the service, as a Director of the Office of Value Management within the U.S. Department of Veterans Affairs.

As the Director of the Office of Value Management, he leads his Value Management team to address Congressional and General Accountability Office (GAO) findings, provide governance, and measure value for VA portfolios focused on outcome-oriented results for Veterans. He is a recognized subject matter expert in Value Management and performance measurement methodologies. He also is creating this approach to healthcare within technology. His future web/ mobile application, Doc Outcomes, creates an environment in which patients can make truly informed choices about their healthcare in ways that democratize access to the best available healthcare options. The application integrates with over 291 databases to provide a "value score" based on the health outcomes achieved, and schedule an appointment. Finally there will be a place where patients can choose their providers based on how well they practice medicine.

Most recently, he has been invited to present at multiple speaking engagements, as well as earning awards for this innovative approach to healthcare. His upcoming speaking engagements include: HIMSS Population Health Forum (Boston, Feb 2017), Gartner Analytics Summit (Mar 2017), Global Predictive Analytics Summit (San Diego, Mar 2017), Frost and Sullivan (San Diego, Mar 2017), HIMSS Health IT Summit (Orlando, Apr 2017), Electronic Health Record and Health IT Summit (San Jose, Apr 2017), Data Science Summit (New York City, May 2017), Health Data Summit (Philadelphia, May 2017), and Big Data Analytics (London, Nov 2017). Over 2016 he spoke at the following: Harvard Big Innovation in Global Health (Boston, Jun 2016), Federal Interoperability Metrics Summit (Washington D.C., Aug 2016), HIMSS Federal Roundtable (Oct 2016), Innovation Enterprise Predictive Analytics Summit (Chicago, Nov 2016), and the Performance Excellence Summit (Dec 2016). He was awarded the 2016 Predictive Analytics Innovation Award for Best Use of Data for Public Good. This award recognized an individual or group who has used data to help government and public services. The Summit he attended consisted of 400+ worldwide executive leaders and innovators from industry to discuss how to leverage predictive analytics and data to drive desired business outcomes. Overall, it was an honor for him to be recognized on behalf of VA with this award, and for the votes of confidence from other leaders that Value Management provides value not just to our Veterans, but to the public. He was also recognized by Harvard Business School and selected as the Innovation Project for 2016-17.