The Denominator in Value-Based Health Care: Porter’s Hidden Costs

To the Editor Recently, Aronson et al1 published their experience expanding and reengineering enhanced recovery after surgery protocols by identifying and addressing disease processes or comorbidities (eg, diabetes mellitus, anemia, complex pain, malnutrition, and frail elderly). The initiative, entitled Perioperative Enhancement Team (POET), uses Porter’s value-based framework to support the underlying supposition that addressing these medical conditions in the perioperative period may significantly influence clinical outcomes. Furthermore, they rationalize anticipated improvement in clinical outcomes as the driving force in the numerator of the value equation. However, despite briefly mentioning “business case modeling,” there is little in the discussion of the underlying costs of their framework. The accounting basis for value-based health care rests on Kaplan’s time-driven activity-based costing.2 The authors highlight an iterative process where a “core group of dedicated providers…with a common interest in advancing the science of perioperative medicine” collaborated in developing various algorithms for optimizing patients for surgery. Using a time-driven activity-based costing framework, the denominator in the value equation for POET potentially increases dramatically. This is not surprising. Previously, Dexter and Wachtel3 argued that the value proposition for a Perioperative Surgical Home rested on 2 operational factors: reducing the number of preoperative tests and optimizing the clinical workflow on the day of surgery. It is possible that both will result from the POET effort, but this remains to be seen. Furthermore, the Perioperative Optimization for Senior Health component of the POET initiative is, at least in part, supported by grants. These revenue streams need to be accounted for in the value argument. Compounding the cost structure, the creation of a data repository capable of accurate and inclusive tracking of important perioperative clinical outcomes is a necessary next step. To anesthesiologists, this perspective is not new. From the Multicenter Perioperative Outcomes Group to the Anesthesia Quality Institute, anesthesiologists have led the charge for using large data sets to elucidate the trends in and impact of various intraoperative practices. However, at an operational level, initiatives that decrease variation in clinical workflows may not affect clinical outcomes. Recently, Kheterpal et al4 showed that while the implementation of an intraoperative warning system significantly improved processes of care, it did not impact postoperative outcomes. Similarly, the value argument presented by Aronson et al1 becomes a little more nebulous without demonstrating improvement in postoperative outcomes. With the numerator in the value-based framework, we need the denominator; the business models and cost structures should be published. Presumably, more financial transparency will enable physicians and leaders in perioperative medicine to better elucidate their value-based opportunities in this rapidly changing health care environment. Nonetheless, the underlying strength of the POET initiative is that the perioperative model extends the scope of multidisciplinary decision making into the preoperative period when surgery is contemplated. Through a population health lens, Aronson et al1 begin to reframe the discussion of the perioperative risk assessment. Ultimately, instead of asking the question when surgery should be done, perhaps there will be a more challenging question: should surgery be scheduled? Mitchell H. Tsai, MD, MMMDepartment of Anesthesiology, Orthopaedicsand Rehabilitation, and SurgeryLarner College of MedicineUniversity of VermontBurlington, Vermont[email protected] Jeremy C. Porter, MDDepartment of AnesthesiologyUniversity of Vermont Medical CenterBurlington, Vermont David C. Adams, MDDepartment of AnesthesiologyMontefiore Medical CenterAlbert Einstein College of MedicineNew York, New York