Navy saves money, improves patient outcomes through value-based care pilot: study

In 2016, the newly appointed surgeon general of the Navy, Vice Admiral C. Forrest Faison III, launched a value-based care pilot at the Naval Hospital Jacksonville.

The goal: He wanted to explore whether multidisciplinary care teams could improve the cost of care for active-duty personnel and their dependents.

It turned out they could—and simultaneously, they found they could actually improve care, getting active duty personnel back to work in a shorter amount of time for several identified conditions.

An article on that project, published today in the August issue of Health Affairs and sponsored by Project HOPE, looks closely at four of those conditions treated in the Navy hospital: low back pain, osteoarthritis, diabetes and high-risk pregnancy.

Researchers examined the creation of a care team for each condition, outcomes and costs measured during a 12-month pilot.

Under the program, patient outcomes improved for three out of the four conditions.

It could have much broader implications. In 2018, the Navy spent $9.5 billion to deliver medical care to 2.8 million active-duty Navy and Marine Corps personnel and their dependents, along with retirees. Care was delivered at 128 provider facilities in the U.S. and overseas. At any given time in 2018, 10,000 active personnel were not available for duty due to illness or injury.

How did they do it?

After organizing four teams called integrated practice units (IPUs) to measure the outcomes and cost of treating each condition:

  • The first step in the pilot was establishing a leadership structure that could be applied to many conditions across hospitals.

Two full-time, onsite project managers were appointed: a senior health systems engineer and government project manager in the Performance Improvement Office in the Navy Bureau of Medicine and Surgery, along with an APL senior health systems and project engineer. This core team of three met weekly and on an ad hoc basis. There was also a group assembled to give overall direction and high-level decision support for the initiative.

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  • The second step in the pilot was selecting the medical conditions for the project. The conditions chosen were among the highest incidences and spending on active and non-active duty patients. Specifically, in 2016, Jacksonville hospital’s spending for low back pain care was $6.4 million, osteoarthritis was $11.7 million, diabetes was $5.1 million and pregnancy was $3.3 million. In addition, due to the high prevalence of anxiety and depression among the military population, mental and behavioral health treatment was embedded into the pilots.
  • Next, physician and nurse co-champions were appointed to lead working groups for each condition. The teams consisted of other physicians and nurses, nutritionists, mental and behavioral health specialists, and physical therapists.
  • In the fourth step, each integrated practice units (IPU) team selected a process for reporting outcome metrics for its condition. One challenge was the inability to integrate these outcomes into the Navy’s legacy electronic health record (EHR) platform or for the EHR to report aggregated clinical and process metrics. Plus, naval security regulations would not allow clinicians to use web-based software for data collection.
  • Finally, a dedicated costing team was appointed and led by a consultant with expertise. This team examined a patient’s complete cycle of care including employees and other resources needed for treatment.

The results

Early results from the low back pain unit showed patients experienced a faster diagnosis time than patients before the integrated practice units model at under 5 days versus more than 13 days on average.

In addition, patients spent 60% less time in physical therapy, or 54 days versus 90 days in the hospital, and achieved almost complete elimination of morphine use. Finally, more than a third of the 201 patients enrolled in the low back pain unit graduated with their symptoms resolved. As a result of the pilot, the Navy combined the back pain and osteoarthritis units into a musculoskeletal clinic and a similar IPU at another naval hospital and its associated clinics.

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“I was surprised about the effectiveness of the lower back pain IPU. By shifting the treatment to physical therapy and exercise, the IPU drove morphine use virtually to zero and was able to return sailors to active duty much faster. The diabetes IPU also experienced rapid declines in its patients’ HgA1c levels to targeted levels,” Robert Kaplan, Emeritus professor of leadership development at the Harvard Business School and co-author of the paper, told FierceHealthcare. “These demonstrated that no new medical advances or techniques are required to improve the health of these populations; just the need to better organize care around the patients’ conditions and treat them pro-actively with focused multi-disciplinary teams.”

In the diabetes IPU, patients experiencing an average decline of HbA1c levels of 2.5 percentage points and quality of life scores showed improvement and in the osteoarthritis IPU, average hip disability and knee injury outcome scores improved. 

In the high-risk pregnancy group, the majority of 15 patients observed delivered at term at Jacksonville and were more likely to use behavioral and nutritional health resources. That program was the only unit not continued, however, because of high variability in the condition, limited patient volumes and some leadership weaknesses.

Kaplan says that the negative results associated with the high-risk pregnancy IPU suggests that value-based care, at least initially, should be applied for treating high-volume conditions where evidence-based clinical pathways already exist.

“Probably an IPU focused on normal pregnancies would have yielded better improvements in outcomes for mothers and their newborns,” he said.

Due to limited existing costing systems, the comparison of costs pre- and post-ICU was difficult. However, overall quarterly costs declined during the pilot. “Lacking baseline information, however, we cannot know whether end-of-year costs were lower than pre-IPU costs,” the paper stated.

Authors called three of the pilot programs successful due to several features.

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There was a clear alignment with the Navy’s mission to improve personnel readiness. Followed by the lower total costs of care, high patient volumes, readily available outcome measures; the existence of standardized, evidence-based clinical pathways; and duration of care cycles that enabled useful feedback to clinicians.

There were also several challenges along the way. Legacy health information systems and spotty Wi-Fi forced personnel to hand-write medical records and data collection. Plus, primary care providers expressed concerns about losing patients to the IPU. In addition, as exiting military costing systems are not being accurate at the condition level, the IPUs could not compare patient costs pre- and post-IPU.

“At a broader level, given the positive experience with this value-based health care pilot, the Navy’s implementation model could serve as a model for other organizations, including the Veterans Health Administration and those in the private sector, that are interested in new ways of organizing, measuring, and improving the care they deliver to patients,” the paper concluded.

“The lesson is that VBHC works; it can and should be scaled to other facilities and for other high-priority medical conditions,” Kaplan added.