Pathology Quality

Value Creation

What do we mean by “value creation” and what does it have to do with Pathology and quality?

First, some background...

  • On April 16, 2015, President Obama signed legislation entitled the Medicare Access and CHIP Reauthorization Act of 2015, a bi-partisan bill that among many things, shifts the Medicare program away from a fee-for-service (volume) model and moves physicians into what is referred to as “value-based” payment. President Obama said the new law helps Medicare by giving assurance to doctors about their payments. "It also improves it because it starts encouraging payments based on quality, not the number of tests that are provided or the number of procedures that are applied but whether or not people actually start feeling better," Obama said. "It encourages us to continue to make the system better without denying service.“
  • In their October 2013 article entitled "The Strategy That Will Fix Health Care" in the Harvard Business Review, Professor Michael Porter and Dr. Thomas Lee call for a fundamentally new strategy to address a health care system that struggles “with rising costs and uneven quality despite the hard work of well-intentioned, well-trained clinicians.” Here is how they describe the strategy they advocate.
At its core is maximizing value for patients: that is, achieving the best outcomes at the lowest cost. We must move away from a supply-driven health care system organized around what physicians do and toward a patient-centered system organized around what patients need. We must shift the focus from the volume and profitability of services provided—physician visits, hospitalizations, procedures, and tests—to the patient outcomes achieved. And we must replace today’s fragmented system, in which every local provider offers a full range of services, with a system in which services for particular medical conditions are concentrated in health-delivery organizations and in the right locations to deliver high-value care. —Porter, Michael E., and Thomas H. Lee. "The Strategy That Will Fix Health Care." Harvard Business Review 91, no. 10 (October 2013): 50–70.


Value Creation and Pathology

  • One of the core directives for the Division of Quality and Health Improvement is to explore initiatives within the Department of Pathology and across Michigan Medicine to position Pathology as a value-added contributor to improved patient outcomes. The fact that lab results influence about 70% of medical decisions makes it imperative that we collaborate with our clinical partners to ensure this information is at the center of patient care.
  • One example of this type of initiative currently underway is a collaboration between the Department of Internal Medicine and the Department of Pathology to investigate proper utilization of a variety of laboratory tests, based on national guidelines. These investigations also seek to identify low-value referrals to clinics based on inappropriate testing. This is one way that the Department of Pathology is working to make an impact on the challenges our patients are experiencing in accessing clinics in a reasonable timeframe.