Health Care’s Value Problem-and How to Fix It — from a Smart Simplicity approach(3/3)

12 min readMar 7, 2021

Part 3: The case of diabetes

In recent years, researchers have become aware of the wide- spread variation in the health outcomes delivered to patient groups across providers, countries, and regions within countries.[6]

Diabetes is a serious chronic disease that is reaching near- epidemic proportions. According to the International Diabetes Foundation (IDF), roughly 415 million adults suffered from diabetes in 2015-and nearly half of those cases went undiagnosed. [7] An additional 318 million adults had impaired glucose tolerance, putting them at high risk for developing diabetes in the future.

In 2015, diabetes caused 5 million deaths worldwide, more than HIV/AIDS, tuberculosis, and malaria combined.

By 2040, the number of adults with diabetes is expected to grow to 642 million, approximately 10% of the world’s adult population.

Long-term complications from diabetes include cardiovascular disease, blindness, kidney failure, and poor circulation leading to foot ulcers and eventually, if the condition worsens, to amputation of the lower limb.

In addition to this widespread human suffering, diabetes rep- resents a growing economic burden.

Treatment for diabetes and related complications currently accounts for about 12% of global health care spending.
IDF estimates that diabetes-related health expenditures will increase from $673 billion in 2015 to $802 billion in 2040.
What’s more, the lion’s share of the costs associated with the disease is incurred treating patients with serious complications, which makes prevention and progression control critical to both delivering good health outcomes and minimizing the costs of care.

COMPARING OUTCOMES: THE US AND SWEDEN

The incidence of diabetes and the costs of diabetes care vary widely across national health systems. (See Exhibit 2.)

Take, for example, the differing rates of type 2 diabetes in the US and Sweden.

According to IDF, the age-adjusted prevalence of type 2 diabetes in the US adult population is 10.8%;
in Sweden, the equivalent number is less than half as large- 4.7%.[8]

What’s more, not only is the prevalence of the disease substantially higher, but diabetes patients in the US are significantly more likely to suffer from serious complications.

For example, in 2010 (the most recent year for which comparable data is available), Sweden had 3.2 diabetic amputations for every 100,000 people;
the equivalent US number was 17.1-more than five times as high.4

Because complications drive the lion’s share of costs, the higher complication rate in the US helps explain why the annual cost per patient of type 2 diabetes treatment in the US is double that in Sweden ($10,942 versus $5,063). [9]

Based on IDF calculations, we estimate that if the US could bring its prevalence rate down to Sweden’s, it would save more than half of what the US health system spends annually on diabetes care, or about $163 billion.

Alternatively, if the US could bring its cost per patient for treating diabetes down to the Swedish level, it could save even more-about $172 billion. Doing both would lead to cumulative annual savings of about $250 billion.

These numbers reflect only direct savings in health care costs; they do not
include the considerable indirect savings in terms of limiting lost productivity due to illness or the indirect economic benefits of diabetes patients living longer lives.

HOW BEHAVIOR DRIVES VARIATION IN OUTCOMES

What explains these differences in health outcomes? Although genetic differences in the populations of the two countries probably account for some of the variation, the main causes are behavioral.

Diabetes is largely a lifestyle disease, so patient behavior in terms of diet and exercise plays a central role in its prevalence and progression.[10] For example, obesity is a key risk factor in diabetes, and obesity levels (measured by the age- adjusted percentage of the population with a body mass index of 30 or above) are 70% higher in the US than in Sweden, mainly owing to differences in diet. Sugar consumption in the US is 1.5 times higher than in Sweden; according to one recent study, more than half the calories consumed by Americans come from so-called ultra-processed foods that are high in sugar.[11]

Another key behavioral driver is the way in which the health systems in the two countries treat diabetes. To analyze the behavioral roots of different approaches to clinical practice in the two countries, we reviewed the scientific literature and interviewed clinical experts and representatives of patient groups. Our goal was to develop a high-level behavioral map of how the two systems typically diagnose and treat diabetes. While there are, of course, exceptions in both health systems and our analysis is not comprehensive, we identified two important clusters of behavioral difference.

Individual- Versus Team-Based Approach to Care. In the US, individual physicians typically take responsibility for diabetes care. The vast majority of type 2 diabetes patients (roughly 80%) are treated by their primary-care physician (PCP). It’s rare for PCPs to refer diabetes patients to an endocrinologist unless the case is especially serious — and when they do, the specialist tends to take over primary responsibility for the patient’s care.

In Sweden, by contrast, clinicians take a more interdisciplinary, team-based approach. A patient’s general practitioner (GP) usually makes the initial diagnosis, but that diagnosis immediately triggers the involvement of a variety of other experts, who play different but complementary roles. For example, most primary-care facilities in Sweden have specially trained, full-time diabetes nurses on staff who play a central role in diabetes care (we’ll describe that role in more detail below). In the US, by contrast, diabetes nurses work mainly in secondary-care treatment facilities, not primary care. Therefore, they tend to see only the most seriously ill patients.

IN SWEDEN, CLINICIANS TAKE A TEAM-BASED APPROACH TO CARE.

Swedish GPs also refer diabetes patients to specialists (known as diabetologists, a term used in Sweden to describe endocrinologists who specialize in diabetes care) far more frequently than US primary-care physicians do. But that does not mean those patients stop seeing their GP. Rather, Swedish diabetes patients move easily between health care providers in the system, from GP to diabetes nurse to specialist and back again in a way that does not happen routinely in the US.

Finally, Swedish primary-care centers often appoint one GP to serve as the designated diabetes “node.” In addition to treating his or her own patients, the node oversees the care and disease progression of other diabetes patients in the center, plays a consultative role with his or her colleagues, and, in general, helps coordinate the movement and care of patients among the multiple caregivers on the interdisciplinary team.

Treating Symptoms Versus Treating Behaviors. Another major behavioral difference between the two systems is that the clinical interventions around diabetes in Sweden tend to be far more holistic than in the US. Whereas US clinicians focus primarily on medical measures — diagnosing symptoms and then prescribing drugs or performing procedures to address them — Swedish clinicians balance this approach with the kind of educational and behavioral interventions that are critical for managing a lifestyle disease such as diabetes.

These differences are partly a function of how much time primary-care physicians spend with their patients. Once diagnosed, diabetes patients in the two countries visit their doctor with about the same frequency — roughly three or four times a year. But the time they spend per visit differs substantially: between 5 and 10 minutes in the typical US office visit, compared with 15 to 20 minutes in Sweden. The additional time that Swedish doctors spend with patients creates more opportunities to educate them on the behaviors needed (such as proper nutrition and exercise) to manage their disease effectively. By contrast, because US doctors are more time constrained, they are forced to focus on the most immediate and acute effects of the illness, reinforcing the overreliance on medical measures to the relative neglect of educational and behavioral interventions.

The holistic interventions of the Swedish system are reinforced by that country’s team-based approach to diabetes care. Here, the role of the diabetes nurse is key. As soon as a general practitioner makes the initial diagnosis, he or she refers the patient to a diabetes nurse, who conducts an initial one-hour visit to develop a tailored plan and daily routine for managing the disease (including when to take medication and how to measure blood sugar). Diabetes nurses meet regularly with patients in follow-up appointments, where they examine their feet for signs of neuropathy or foot ulcers (key symptoms of disease progression), make any necessary appointments with specialists such as podiatrists or ophthalmologists, and in general help with the ongoing management of the disease.

IN SWEDEN, THE ROLE OF THE DIABETES NURSE IS KEY.

The presence of diabetes nurses in most primary-care settings also makes it easier for the system to focus its educational efforts not only on patients who have been diagnosed with diabetes but also on those at risk of developing the disease in the future. In other words, the Swedish approach contributes to prevention, not just to treatment and cure. And in general, it seems to integrate the traditionally separate domains of health care and public health better than the US system does.

Even specialists take a broader approach to diabetes care in Sweden. Diabetologists typically focus on the more serious cases, just as endocrinologists in the US do. But in some Swedish counties (roughly the equivalent of US states and the primary funders of health care), they also offer an intensive four-day program of examination and education for early-stage type 2 diabetes patients, in which they develop a comprehensive treatment plan and then refer the patient back to his or her general practitioner for follow-up. This practice helps slow down the progression of the disease.

HOW ORGANIZATIONAL CONTEXT SHAPES INDIVIDUAL BEHAVIOR

It may be tempting to explain these differences in behavior in terms of differences in the national or medical culture of the two societies. But that would be to beg the question, “Why have these different cultures led to different behaviors?” Looking more closely, we can identify specific aspects of the organizational con- text of the two health systems that have shaped those behaviors and to which those behaviors are a rational response.

Fee-for-Service Versus Capitation. Perhaps the most visible difference is the way in which caregivers are compensated for their work. Despite many changes in recent years, most US clinicians continue to be paid according to some version of the traditional fee-for-service model. In Sweden, by contrast, payment for primary care is usually based on capitation adjusted for a primary-care center’s population mix.

The US fee-for-service model helps explain why primary-care providers in the US are less likely than their Swedish colleagues to refer patients to an endocrinologist. If a large share of referred patients end up returning to that specialist for their ongoing care, the primary-care provider loses the patient and the associated revenue stream. Fee-for-service compensation also encourages US clinicians to focus on medical interventions, which are most likely to be reimbursed by payers. From the perspective of smart simplicity, these behaviors aren’t signs of irrational behavior or poor priorities. They are simply rational responses to the context in which people work. Changing their behavior requires changing the context.

A capitation-based incentive system, by contrast, encourages autonomy by making it easier to choose from a wider variety of interventions without having to get payer approval. As a result, more time and attention go to activities such as patient education. Capitation also gives Swedish clinicians an interest in preventing diabetes and minimizing its progression, because the fewer the cases, the lower the costs and the more the primary-care facility will be able to keep within its county-approved budget.

Comprehensive Outcomes Data. But capitated payments alone do not explain Sweden’s distinctive approach to diabetes care. A far more fundamental difference in the organizational context of the two health systems is that Swedish clinicians have access to comprehensive data on the health outcomes of diabetes patients nationwide. Since 1996, Sweden’s National Quality Registry for Diabetes (known by its Swedish acronym, NDR) has collected comprehensive outcomes data on more than 5 million Swedish diabetes patients. Since 2002, NDR data has been available online, allowing individual clinics to easily compare their own results with national statistics. NDR is one in a network of more than 100 such quality registries in Sweden, covering the majority of national health expenditures. These registries have become powerful engines of behavior change for clinicians and help explain why Sweden often ranks near the top in international comparisons of health outcomes.[3]

Because Swedish clinicians have data on the actual health outcomes they are delivering, they are empowered to identify the most effective treatment options and change their behavior accordingly. And because this data is publicly available to providers, payers, and patients, clinicians have an interest in cooperating with peers to improve their outcomes over time. Finally, access to comprehensive outcomes data ensures that the incentives associated with capitation work in the way they are supposed to: improving overall health care value rather than, for instance, becoming a perverse incentive that encourages undertreatment.

Some regional US health systems (for example, Kaiser Permanente) have active diabetes registries, which they use to identify best practices in care much as Swedish clinicians do. Until recently, however, there was no national US diabetes registry, and the new Diabetes Collaborative Registry is still in the early stages of development.[4] In the absence of comprehensive outcomes data, it is far more difficult for primary-care physicians on the frontline of diabetes care to assess their performance against that of peers, codify best practices, and ultimately improve their health outcomes.

“Integrator” Roles. A third aspect of the Swedish organizational context for diabetes care is the explicit roles that have been created to support the team-based and holistic clinical approach. The diabetes nurse who is a central player in diabetes care and the general practitioner who is the designated diabetes node in a primary-care center are both examples of what we call “integrator” roles — actors with an interest in encouraging cooperation who help each member of the organization benefit from the cooperation of others. It is the existence of these clearly defined roles in overall care delivery that helps make Sweden’s approach to diabetes care so effective.

An Organizational Context That Delivers Value. Our analysis suggests that the combination of capitated reimbursement, the systematic measurement of health outcomes, and effective integrator roles make it easier for Swedish clinicians to work together to deliver value to diabetes patients. Put in the language of smart simplicity, these factors make cooperation an effective behavioral strategy for Swedish clinicians, and that is one of the reasons why Sweden has a much lower prevalence of type 2 diabetes than the US.

There is no reason why the US health system — or any health system, for that matter — couldn’t foster an organizational context that encourages comparable behaviors.
In fact, some US providers have begun to do just that. A number of leading diabetes-focused clinics in the US — for example, the Joslin Diabetes Center in Boston — take a team-based approach to care that is quite similar to the Swedish model, and these specialty clinics provide some of the best diabetes care in the world. They are the exception, however. And even they struggle with aspects of the overall US health system (for instance, the continuing dominance of fee-for-service reimbursement) that function as disincentives for interdisciplinary cooperation among care providers. In other words, the challenge remains: how to spread the team-based model to the entire US health system.

THE BEST US DIABETES CLINICS TAKE AN APPROACH THAT IS SIMILAR TO THE SWEDISH MODEL.

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Originally published at https://www.bcg.com on July 18, 2020.

Edited for Brazil by:

Joaquim Cardoso (JC)
Senior Advisor for Health Care Strategy to BCG — Boston Consulting Group
cardoso.joaquim@advisor.bcg.com