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Accenture

Understanding how public entities are able to deliver healthcare benefits to their users is importantin determining appropriate future spending priorities.

The public sector value (PSV) framework appropriates tenets of the private sector’s method of evaluating “shareholder value,” applies them to government organizations in order to determine the value they create for citizens and evaluates how the maximum benefits from investments in health-related technologies can be achieved.

Definition of PSV

As part of a major research program to identify the characteristics of high-performance businesses and governments, it became clear that a way to identify high performance in the public sector was needed. To address this need, a more holistic approach to measuring value was developed. Designed to work in conjunction with existing performance measures, and flexible enough to be applied globally, the PSV model is a disciplined approach to defining public sector outcomes and quantifying results (see Figure 1).

PSV involves a rigorous approach for measuring and driving value. It uses a quantitative methodology to define an agency’s intended results and outcomes, which are a combination of strategic goals and stakeholder expectations. A structured and balanced framework quantifies results by linking achievement of objectives to cost-effectiveness.

In the current political environment, governments must allocate scarce resources in order to perform more services. The PSV mindset requires an agency to prioritize goals by assigning weights to targeted factors in its organization. Historical performance trends are analyzed to establish a baseline. Future performance is then projected from the baseline.

Agencies can make decisions by comparing their performance results from year to year, learning from historical performance, evaluating trade-offs and understanding the impacts that investment decisions will have on their overall performance. PSV reinforces a “good governance” mindset that continually balances outcomes and cost — and enables policy and budget decision making grounded in a metrics-based rationale.

Using PSV to Evaluate Investments in Healthcare

The public sector traditionally has evaluated discrete operational process measures with incomparable units, such as changes in satisfaction levels. The day-to-day operational perspective in a single agency department provides a limited snapshot that may give a false sense of agencywide performance. PSV evaluates how well a government agency is able to attain its objective in delivering healthcare by aggregating multiple outcome-driven, agencywide metrics to assess the overall value the agency’s care creates for citizens — its stakeholders. It pinpoints areas within the healthcare agency which indicate underperformance in healthcare cost, effectiveness and efficiency. The tool enables comprehensive benchmarking and decision making, by allowing agencies to compare care methods and performance over time within themselves as well as with peer organizations.

Results of such an analysis can be used in multiple ways, including, for example, to provide justification for targeted and detailed budget requests to legislatures. A state Medicaid agency preparing to testify regarding a budget request can, for example, use the PSV framework first to decide how to allocate its scarce resources, then to create details for its state Medicaid performance story in order to legitimize its request to the legislature. Agencies have also explored PSV as a decision-making tool for project approvals and continual resource allocation.

PSV Metrics and Analyses

A typical PSV analysis includes the following five steps:

• Developing an agency outcome model and selecting metrics;
• Assigning weights to the factors involved;
• Calculating the overall outcome score;
• Calculating the cost-effectiveness score; and
• Analyzing results and developing recommendations.

PSV requires that an agency determine the end results they want to deliver to key internal and external stakeholders. This often entails defining and delineating the objectives or raison d’etre, in as quantitative and measurable a manner as possible. The next step is to prioritize objectives and identify raw metrics for determining successful achievement of this raison d’etre. Finally, the raw metrics must be filtered through multiple screens of feasibility and validity to decide which will drive results most effectively, and which are most critical to include in aggregate measures.

Developing PSV analyses requires close collaboration of PSVtrained practitioners with the agency in question. Assigning quantitative value or measures to health-associated measures is always challenging. However, general objectives such as “improving the quality of healthcare” are too broad and vague to measure — and the goal of PSV is to get the agency to a stage such that it is able to measure performance and value delivered. An intense workshop-style forum is often required to determine the agency’s key goals and desired outcomes — and then drill down into sub-outcomes, metrics and sub-metrics to determine how to measure those agency outcomes.While most goverment health agencies have similar goals, priorities may differ as may availability of metrics and information.

To measure outcomes, a large pool of eligible metrics is often explored. This may include industry best practices and currently tracked data. However, many health organizations have many metrics, or metrics that are too general, irrelevant or vague for use. Metrics are thus passed through two filters: a) the intentions filter; and b) the feasibility filter.

The intentions filter locates metrics that are outcome-focused, customer-focused, measurable and actionable; and

The feasibility filter determines the metrics that are affordable to measure, aligned to resources, comprehensive and meaningful.

Once metrics have been determined, it is critical to weight them. The weighting exercise is telling in requiring agencies to prioritize key areas according to availability and quality of data as well as importance to mission.

For example, a state Medicaid agency can use PSV to rank desired outcomes that increase program results and cost-effectiveness. Its outcomes can be illustrated — along with the respective weights assigned to each according to the filtering method described above. The agency can filter metrics over four years to create a PSV analysis that shows its performance over time (see Figure 2).

Results of a PSV analysis can be demonstrated graphically. Outcomes are graphed on one axis, cost-effectiveness on another and a trend line is drawn to indicate performance. Movements in different directions indicate where the agency has either under or over-performed with respect to its own average performance over time (see Figure 3).

When such an analysis is complemented by qualitative information on key investments and key policy directions, it tells a powerful story regarding an agency’s performance and direction over time. An agency can thus use such analysis to justify its budget, spending decisions and policy decisions going forward.

For one specific agency for which a PSV was conducted, analysis indicated that outcomes improved despite the overall reduction in adjusted cost per enrollee. The story the agency chief was able to tell was compelling, indicating ability to use technology effectively to increase revenue and customer service, maintaining enrollment in Medicaid and improving utilization of preventive care, such as prenatal care and community carebased services, has improved, while slowing utilization of inpatient hospital services.

PSV Use for EHR

EHR can have an integral relationship with PSV. Government agencies can use PSV to evaluate, prioritize and justify investments in clinical information technology and development of EHR systems. Conversely EHR can also be used to support PSV analyses, since it is an outstanding tool for measuring care performance and values. As a method for delivering records effectively and efficiently, EHR is an important factor in the public agency’s process and overall outcomes.

EHR gathers data about the agency’s stakeholders to effectively provide seasoned case management, which aids in the mission of effective and efficient governance. It minimizes an agency’s administrative burdens by reducing the time spent to gather and input the stakeholders’ data and allowing management to focus on the more critical task of maximizing effective utilization of those data.

EHR “improves patient safety,” but healthcare agencies must first determine what the phrase ultimately means to their organizations. Does it mean ensuring drugs are prescribed appropriately, the right diagnostic tests are performed, patients requiring care from specialists see them promptly? The agency must define the phrase on its own terms, and then develop its patient safety metrics and expected outcomes so that they can be integrated within the PSV framework for credible and quantitative results.

Multiple countries and localities are adopting EHR, but because their purposes and methods of use vary due to different objectives and values, EHR design must also be modified to reflect multiple systems. PSV can be used to quantify the different data and specifics from locale to locale, and its overall framework need not be altered to produce targeted results and outcomes. An important key to success for this issue occurs in initial meetings with public sector clients, when they must determine their priorities and outcomes objectives.

Many public agencies must make major decisions in healthcare policy and spending on a regular basis, and they must subject those decisions to detailed scrutiny by government legislatures. Rigorous examination of EHR usage is also to be expected by officials. If an agency invests in EHR, how can it justify that decision unless it shows that EHR has improved care performance and by how much? Traditional methods used by healthcare agencies are inefficient for drawing correlations. Granular metrics are needed to produce graphs showing how outcomes and costs have changed over time. Those must be supplemented with qualitative and historical information, which the PSV framework provides.

Key for Success

A critical factor in successful PSV usage is the involvement of the key stakeholders from all departments participating in the process. These include administrators, IT departments, nurses and physicians, who must be given the opportunity to offer opinions about desired outcomes, factor weighting and metrics. Decisions must not be made in a vacuum; otherwise, stakeholders will reject utilization of PSV.

Conclusion

PSV provides government agencies with a credible tool for determining if performance is improving or deteriorating over time, and pinpointing areas within the organizations that are underperforming. Results offer a high-level perspective on how agencies compare to their peers in benchmarking analyses. How they compare to their own average and best performance can provide justification for budget requests to federal, state and local legislatures, and can be used to inform policy direction and decisions in the long term.

As the current economic climate in the public sector increases pressure on time and resources, agencies can use PSV to determine how to allocate their resources for patient care more effectively and efficiently. At the same time, EHR is an integral part of PSV, because its data-gathering procedures are an important factor that drives the public sector in its quest to achieve an overall effective healthcare model.