Dr. Teisberg and her colleague Dr. Michael Porter helped define “Value Based Healthcare” in their seminal HBR article and later book, Redefining Healthcare. However, the definition of value is often interpreted differently by different stakeholders in the healthcare system. Dr Teisberg reviews the impetus for her original work and puts it in context for how we might think about the future.

Alan Pitt: Good morning, this is Alan Pitt with Healthcare Pittstop, and I’m here with a good friend of mine, Dr. Elizabeth Teisberg. We’ve been friends for many years. She co-authored with Dr. Michael Porter the book Redefining Health Care, which I believe is about the future of health care, and I was hoping she could talk to us a little bit about that today. I was especially looking for a refresher and how she’s thinking about the book in context now. Elizabeth, thank you so much for joining me.

Elizabeth Teisberg: Thank you.

AP: Can you tell me a little bit about yourself, your personal story, and your interest in healthcare?

ET: Sure. I’m a PhD systems engineer by training, and I was a professor of strategy and innovation for years before doing this work. But life happens—I had two kids who were medically complicated. So I had a deep dive into health care from a very personal point of view. Well, in health care, everybody has a story and they are important stories. But as I lived through this situation with my kids and in doing end-of-life care for their grandpa, what I saw were so many smart, caring, hard-working people achieving less than they had hoped to and working harder than they should have to work. From the perspective of someone who is trained in systems engineering and who studies innovation and strategy, it was so clear that we could do better. So that was the impetus for initially working on redefining health care.

AP: I guess it was your opportunity to really talk to the rest of the country about this important issue with Dr. Porter.

ET: Yes. I pulled Mike in over the question of why, in a sector that’s so important with quality of life and dignity and death at stake, how can we have innovation and the competitive dynamic in health care be slower and so backwards relative to other sectors of the economy? One would expect to see the innovation in what health care service delivery achieves to improve much, much faster because it’s so important. But that isn’t what we were seeing. So, that puzzle pulled Mike into this with me.

AP: Yeah. You know, I have to admit the book really changed the way I view health care. Of course, all of us have a personal story. I come in health care more from a provider perspective than a patient perspective, at least to date, and I also am very dissatisfied with the ways that I’m able to care for people. So I think it’s a very odd time in America, where both patients and providers feel like they’re not experiencing what they would hope to from the health care system in their greatest time of need. When you wrote Redefining Health Care—which in many ways set up this idea of value-based care for me—a lot of the themes really resonated. It’s been a while now since the book came out, and I know you had a Harvard Business School Review article  before the book, which was very well received. Are there themes there now that you would have changed? Or has your approach to health care changed over the past few years?

ET: Fundamentally, when we brought the idea of “value” in, it was not what people were talking about at the time. We started from a very simple point of view that the goal of health care is to improve health, and value is created by improving health outcomes that are meaningful to individuals and families for the cost of the continuum of care. So when we wrote the HBR article, I got 38,000 emails in response, many from physicians saying, “This is why I came into health care. I came in to help my patients, to improve the health outcomes they achieve. But this is not what the reform discussion is about now. We need to change it, and we need to know what steps to take next to create more value.” It was by following up on those emails that we got all of the stories and the data that we used to put together Redefining Health Care.

AP: Yes, I have to say that really resonates with me. I see the health care system really struggling to make this transition between where they’ve been in a fee-for-service model, get paid for everything you do, to value. And they don’t know how to do it. Any comments for health care systems trying to make this transition to value that might help them in looking at what you wrote and where they should be going in the future?

ET: People are now recognizing that value is not only a critical goal, but also the goal that brings together the different perspectives in health care. Patients want better outcomes. Physicians came into this to achieve better outcomes with their patients. When we have better health, health care overall costs less. So it is a goal that is critical for payers and for the government. It helps to improve productivity. It is the goal that aligns interests. But the problem that we’re having is twofold. One is that as people now talk about value, they talk about it in different ways. Like many ideas, the way people are using the words is morphing to mean different things, some of them in conflict. Lots of people will talk about value as if what they mean is cost reduction or improving the efforts to make things lean. And while cost reduction is important, the essential concept of value is about improving outcomes. When you think about how we define it, the outcomes achieved for the money spent, the numerator is the improvement in health outcomes. So if you’re not improving health outcomes, value is zero.

AP: You know I had an interesting conversation with the Chief Strategy Officer of Philips, Jeroen Tas, and he talks about value from a top-down and a bottom-up approach. For the audience, value to me is this idea of managing a population. How do I get a population to be healthy based on a certain amount of money? There’s also this idea of personalized medicine and looking at the individual and trying to get the most value in their health care journey. When you talk about value for health care systems, I’m presuming you’re coming from the top-down of these large populations?

ET: No. Value is created one person at a time, one family at a time. Value is created in that caring relationship where health care services are delivered. So, value-based care delivery is the path. It is the method to achieve the triple aim, to achieve population health. But it is the method that you use from the level of caring for individuals. It is inherently not just patient centered, nor just human centered, but relationship centered.

AP: I mean, most of the people that I talk to who are involved with value-based care, it gets translated to population health management, large populations.

ET: Right. I understand that that’s what people are doing, but the concept of value for patients can’t start with a population defined by geography. It does start with thinking about people with shared needs, and those needs may be on multiple dimensions. For example, when you think about care for frail elders, and if you’re looking at frail elders who are also eligible for Medicaid because they have low resources, there will be a series of things that can be done to improve the care delivery for that set of patients. But not all elders will need those things. Frisky elders, especially frisky high-resource elders, need very different services than your frail low-resource elders. So you want to be thinking about the segments within a population that have shared needs and how the care for the individuals within that group of people with shared needs can be improved.

ET: That’s how you create high-value care delivery. And so the notion of achieving the triple aim is a different-level notion. That is a population-level notion, and the most powerful path to get there is to create high-value care delivery services. You’ve raised two other questions in this that we didn’t get to answer. On the how-to question, we have participants in our workshops think about a leadership braid. The braid involves cultural change, it involves strategic change, and it involves measurement change. It’s not that one or the other of those is most important; they need to be braided together with careful leadership attention to make transformation happen.

ET: So we have here at UT Austin now, at the new Dell Medical School and the McCombs School of Business, not only a series of executive workshops that go from two to five days, depending on the group, but also a Master of Science in Health Care Transformation. This is UT Austin’s first joint degree, signed by the deans of both Dell Medical School and the McCombs School of Business. It’s truly a joint degree, creating a new field around the frameworks, techniques, skills, and knowledge that one needs to lead health care transformation. It not only teaches leadership, but also: How do you measure meaningful outcomes? How do you create and lead effective interdisciplinary teams? How do you create a learning culture? How do you find patients’ unarticulated needs and design solutions to meet those needs? Things like that.

AP: How interesting. That actually brings up some issues. I, as a physician, have watched a lot of my brethren struggle with the idea that I’m no longer the leader. I may be the leader, but my power in that team is somewhat eroding. That’s a separate issue, I guess, in terms of change management.

ET: Okay, but it’s a great comment. Stay there for just a second, because when you think about what you want that team to do…I mean, you can think you want that team to give you power, but that’s not what health care is about. What you really want is for that team to achieve great outcomes with its patients. So if your team is clearly directed that way and measuring outcomes that are meaningful to the clinicians and to the patients, then we refocus health care on its purpose. We add meaning! We get away from this notion that doctors are hamsters in wheels that need to run faster and faster and instead return the meaning to the work. Now your team is the wind under your wings, working together, because you’re also the wind under their wings working together to help patients achieve more, to do what you came into health care to do in the first place. Tying the teammates together becomes an antidote to burnout.

AP: Have you seen a successful health care system execute against this principle?

ET: What we usually see is particular groups within the system executing. The challenge that people are facing today is not to move from volume to value; it’s to move from value to volume. It’s to take those high-value, team-based services, that relationship-based care, and spread it throughout the system.

AP: So you have pockets that are successful and you need to bring it and scale it across the organization.

ET: Right. Scale is one of the big topics in our workshops and in our new master’s degree. It is really, really the big question. It was interesting; I was in recent conversations with leaders at the Cleveland Clinic. They are focused really hard now on building teams and on building teams around what patients need, because when they do that, they can support the professionalism of their clinicians. And so they are now moving beyond the notion that they can organize by institute to saying that within institutes, they can create high-performing teams that really take the whole thing to a new level.

AP: Yeah, that’s really interesting. One of the other things that’s really caught my attention that’s sweeping across the country is this kind of huge mergers and acquisitions effort. You see it in my space in radiology, where a number of large providers are gobbling up individual practices. You see it with TeamHealth, with Envision. Everything seems to be getting bigger, bigger, bigger, bigger. A lot of people say there will be just 5 or 8 or 10 healthcare systems in the US in 10 or 15 years, as opposed to what we have now. What do you think about this trend, and do you think this is a good thing, a bad thing? How do you see this playing out?

ET: I think the really critical question is whether the systems, whatever they may be, compete on the right thing at the right level. So if we measure the outcomes that really matter to patients and to the clinicians working with those patients so that we can compare outcomes at the level that we help people with their health, then the question about whether we have 8 systems or 18 is probably less important. But right now we’re not doing that. We rarely measure outcomes, even when they’re relatively easy to measure.

ET: But the other thing about that, which you brought up in our prior conversation, is the need for local delivery. I think what we need to be really careful about that is that we have local delivery that is based on national and international science, and a national and international understanding of empathy, resilience, and respect for patients. What we want is local delivery of excellent care. We need to make sure that we are using our technology to uphold national and international standards at local levels, so that appropriate knowledge and expertise are delivered locally. And we need to use technology in ways that increase relationships rather than replacing them.

AP: That’s interesting. I come from the telemedicine space, and I often say that it’s ironic that technology may help put our humanity back in health care by bringing people together in a scalable way.

ET: And we should focus really hard on making sure that that’s exactly what it does, because telehealth can support relationship-based care. You’re right.

AP: Lately, I’ve gotten kind of interested in behavioral economics, trying to understand the patient better. Do you have any opinions about how to in some way scale that understanding of what we bring to the table as an economist?

ET: I’m thinking hard these days about how we deliver our services in ways that build not only engagement but resilience. How we deliver services in ways that help people increase their ability to heal and to live with vitality. So here at Dell Med, we have just opened our new suite of cancer services that are based on the CaLM model (CaLM stands for “Cancer Life ReiMagined”). The wrap-around services such as emotional health support, nutrition, fertility counseling, physical therapy, and even legal counseling, to name a few, are an integrated part of care delivery rather than something separate. Because cancer is now often a long-term disease rather than an episodic and terminal one, we need people to live well with their diagnosis. So we are working on creating those services that support the whole person, giving them the kind of support from their health care that increases their resilience and quality of life.

AP: Interesting, I kind of see it this way: We have to move away from the curing model—we’re going to cure you; as Americans, we love cures—into a caring model, because we’re going to have a lot more chronic disease that has a longer view of the world in terms of how we’re going to have to take care of each other. I think that’s super interesting.

AP: I do want to put a plug in, by the way. I have been to your campus there at UT Austin, and for anyone who hasn’t been there, that is an exceptional facility with really incredible faculty. And I see it as the up-and-comer for really innovative thinking in health care.

ET: Thank you so much. We have really cool programs up and coming here. We’re standing all of our services up in integrated practice units with integrated team-based care. We’re measuring outcomes. We’re creating more full-cycle holistic care. It’s an incredibly exciting place to work.

AP: I completely agree. Elizabeth, I want to thank you very much for your time today. I think this has been very helpful for me, and certainly you’ve been a guiding light for me, in terms of how I think about healthcare. I hope others will appreciate some of your thoughts as well.

ET: Thank you, Alan.

AP: Thanks very much.

For more information about executive education programs at the Value Institute for Health and Care, please visit https://dellmed.utexas.edu/units/value-institute-for-health-and-care/executive-education

For more information about the Master of Health Care Transformation, please visit https://www.mccombs.utexas.edu/Master-of-Science-in-Health-Care-Transformation