Texas Health Resources: Value-Based Bundles

This article is part of a series on value-based hospitals.

With 25 hospitals in the Dallas–Fort Worth region, Texas Health Resources (THR) is the largest nonprofit health-care-delivery system in the state of Texas, serving a region that is home to more than 6.2 million people. Recently, THR began working with The Boston Consulting Group to develop a set of value-based bundled offerings for employers, insurance plans, and individual consumers. The new offerings are designed to be both comprehensive in coverage (including professionals and facilities for the entire episode of care) and completely transparent in terms of pricing and outcomes.

THR’s new bundled services are the result of its partnership with its clinicians to create episode-related packages for specific medical procedures—for example, lumbar laminectomy (a surgical procedure performed primarily to alleviate leg pain caused by lumbar spinal stenosis) or coronary-artery-bypass grafting. The clinicians take the lead in developing outcomes measures to ensure high quality, a positive patient experience, and superior value through efficient, cost-effective care delivery. Then a multidisciplinary team— including physicians who specialize in the chosen procedures, staff at the facility where the procedures are performed, and THR staff who provide analytical and financial support—redesigns the clinical-care pathway to better achieve those outcomes.

According to Dr. Daniel Varga, chief clinical officer at THR, the focus on high-quality outcomes and the fact that clinicians will share in the gains resulting from more efficient delivery of care have garnered strong physician support and engagement in the project.

THR’s new offerings are designed to address two new characteristics of the U.S. health system that are, in part, a result of the Affordable Care Act (ACA): incentives to improve quality and insurance plans with relatively large out-of-pocket expenditures.

One of the major themes in the debate about health care reform in the U.S. has been the highly variable quality delivered by the existing system. In response, the ACA created a variety of incentives for improved quality performance. According to THR chief strategy officer Jonathan W. Scholl, THR has been a leader in offering enhanced quality and a more consistent care-delivery experience for patients in north Texas. The new value-based services are another step forward in this agenda.

At the same time, more and more people in the U.S. are covered by health insurance plans that require an increasing out-of-pocket expenditure. These consumers are looking for significantly higher value for the dollar and up-front transparency on price and quality. The move toward increased purchasing on health exchanges is expected to exacerbate this trend. The new offerings, which are transparent on price and outcomes, are ideal for this segment.

Finally, employers and payers view these offerings as a method to share manageable risk with the health system while getting high levels of transparency for the outcomes delivered. They can also utilize these offerings to enhance the attractiveness of new narrow-network products designed to better coordinate care and control costs.