Reducing the cost of healthcare has long been a welcome by-product of effective healthcare organizations—efficient hospitals have lower hospital bills, efficient payors or insurance companies use fewer resources, and efficient national health systems do more for more people.
But pursuing affordability as a goal itself is increasingly becoming a concern, particularly as regulators and policy makers push healthcare organizations to take a more comprehensive view of healthcare value.
When boosting healthcare value is the stated goal, the actions organizations pursue are often different and more holistic than when they pursue other objectives like reducing costs or improving quality irrespective of the resources involved. When we help clients put the focus on healthcare value, we have found they can improve quality and reduce costs of care at the same time—building value for patients and the broader public.
What we do
Delivering real healthcare value involves helping healthcare organizations improve performance management through enhanced strategic and operational approaches.
With regard to strategy, clients can adjust their business models—by pursuing innovation, improving R&D, allocating resources to the most cost-effective interventions, and adopting best practices. On the operational side, clients can pursue effectiveness and efficiency in service delivery.
We help clients tailor a specific set of strategic and operational approaches to drive value in their particular context. Depending on the type of organization, solutions may include the following:
- Engaging more with consumers
- Ensuring patients are cared for in the most cost-effective locations
- Enabling more innovative care delivery, particularly integrated care
- Innovating payment processes to encourage specific patient behaviors or to reward more cost-effective care delivery
- Enforcing and shaping overarching policies
- Redesigning networks, coverage plans, and products
- Advocating for public policy changes
Examples of what we do
- We helped a midsize regional health plan craft a three-phased, holistic portfolio of initiatives that together would push down its rising cost trend to match the consumer price index rather than exceed it.
- In a recent engagement, a McKinsey team helped a large national health plan address issues of affordability by creating a strategy for its network design business unit, using better network design as a lever for delivering greater healthcare value.
- We helped a large retail pharmacy collaborate with an insurance company to offer greater affordability in disease management and immunizations.
- We helped a leading disease management and wellness company set a comprehensive 5-year strategy to achieve greater healthcare value, which included assessing capabilities, identifying target customer segments, and reshaping the economic model.
- We worked with a city-wide healthcare system to quantify future healthcare needs, set out ideal care pathways to ensure the best health outcomes, collaborate with providers to reduce costs and improve quality, and put in place innovative payment mechanisms to encourage the adoption of best-practice care.
Proprietary tools and insights
We have developed sophisticated tools and solutions that help clients take a value-based approach to service delivery:
- Toolkits and assessments: including a payment innovation toolkit, “readiness for reform” evaluation and benchmarking database, lever assessment to determine the scope and penetration of common healthcare value approaches, and a healthcare value capability assessment to find opportunities in core business functions including networks
- Models and simulations: including a medical risk segmentation model, a dynamic provider economic model, and “war gaming” simulations for contract negotiations
- Condition briefs: including information on more than 20 core conditions, including research literature summaries and descriptions of emerging opportunities