Care Redesign
Relentless Reinvention

The Move to Value-Based Care in Navy Medicine

Article · April 12, 2017

No one denies that how we coordinate, deliver, and pay for health care in the United States must change. Historically, health care services and payments have not always aligned with the quality of health outcomes. Fee-for-service and capitation-based payment models limit industry competition and the ability of health care systems to carry out transformative change.

In their book, Redefining Health Care, Michael Porter and Elizabeth Olmsted Teisberg define “value” as a measure of health outcomes relative to the true cost of delivering those outcomes. Recognizing the importance of this relationship and the growing efforts of health care systems to move toward value-based care (VBC), the Navy Bureau of Medicine and Surgery (BUMED), a component of the Military Health System (MHS), set out to improve the overall value of care provided to its patients — service members, retirees, and their eligible family members. It chose to pursue a more meaningful understanding of its health care delivery costs and outcomes through a pilot study that embraces Porter’s strategy of interdisciplinary “integrated practice units,” or IPUs.

The typical multidisciplinary approach to care brings together clinicians to address a medical problem through a consultative process organized around a provider’s specialty, an approach often described as fragmented, disjointed, and inefficient. In contrast, care under an IPU model is administered by simultaneously mobilizing a cross-organizational, co-located health care team that focuses on a patient’s clinical condition. In an IPU, truly coordinated care becomes feasible, increasing the likelihood of positive health outcomes and improved patient and provider engagement while managing the cost of care.


Controlling costs while delivering the highest quality of health care is essential to the mission of the MHS, one of the largest health care systems in the United States. Its operations are divided among the Army, Navy (to include Marine Corps), and Air Force, which together serve 9.6 million beneficiaries via a direct component (health care staff and facilities run by the Department of Defense) and a purchased care component (TRICARE regional contracts).

In early 2016, Vice Admiral C. Forrest Faison III, Navy Surgeon General and Chief, BUMED, selected Naval Hospital Jacksonville (NHJ) to pilot a VBC delivery model within a multistate health system composed of 2,300 staff and physicians and 85,000 patients enrolled in a medical home port team (a patient-centered medical home model). NHJ is well suited to expeditiously implement and test a novel VBC model. As a centrally funded government health care system, the MHS can more easily implement value principles free from the administrative requirements of a fee-for-service reimbursement model. Moreover, the high concentration of Navy personnel in the area, a diverse patient population, a long-standing partnership with TRICARE, and the ability to partner with neighboring health care organizations made NHJ an ideal choice for testing the value of IPUs.

Laying the Foundation

In April 2016, a team of more than 60 national and regional representatives of Navy Medicine undertook an integrative redesign of NHJ’s care processes and associated measures of success. Guided by Porter’s “value agenda” framework, the team began by assessing the needs of the Jacksonville-area direct-care patient population and then segmenting that population into specific target medical conditions to be addressed through IPUs. An indispensable partner in this effort was the Johns Hopkins University Applied Physics Laboratory (APL), whose health systems engineers and analysts provided assessment and design support. The APL and BUMED sorted patient data (EMR and claims data) by patient type (active duty or non-active duty member, family member, retiree), diagnosis, age, and other factors to glean population-level insights for IPU implementation.

Selecting conditions involved determining the volume of patients with the condition, the condition’s impact on active duty forces, treatment cost, patient satisfaction with current care, patient and provider readiness, and the volume of patients receiving purchased care. Four areas were selected for IPU implementation: low back pain, diabetes with comorbidities, osteoarthritis, and pregnancy.

Low back pain is especially prevalent among active duty and non-active duty populations, accounting for 21% of patients diagnosed with a chronic condition. Of these patients, 41% are active duty. A dedicated IPU could allow sailors and marines to return to duty more quickly and maintain military readiness. Low back pain also has well-established care guidelines and outcome measures in the private sector.

Diabetes is prevalent in the non-active duty population, accounting for 10% of patients with a chronic condition. Although it is difficult to predict and evaluate outcomes given the complexity and duration of the disease, diabetes is a major driver of cost and disease burden in the population and thus worthy of value improvement.

Osteoarthritis is less seen in active duty members, at 4% of patients with a chronic condition, yet it has a significant impact on military readiness. Reorganizing care could lead to more discerning protocols and better alternatives to the sometimes-excessive default solution of joint replacement. Well-established care guidelines and outcome measurement tools for orthopedic conditions also make osteoarthritis a natural choice for comparative study.

Finally, many active duty and non-active duty military personnel are pregnant, offering opportunities to improve the quality of care, both under direct care and purchased care systems and over a definable, relatively short duration.

Notably, the need to address mental health issues was a common theme that emerged during the patient population analysis. Of patients with a chronic condition, 18% had had at least one outpatient mental health visit. Although mental illness was not designated as an independent IPU, its treatment and associated outcomes are considered integral within all four IPUs.

In addition to thoughtful redesign, strong leadership has been essential to ensuring a successful transition to a VBC model that promises to fundamentally transform health care delivery for Navy Medicine. To promote acceptance of the IPUs, clinical champions — chosen for their expertise, enthusiasm, and proven leadership ability — would lead the multidisciplinary teams and be supported by nurse champions. Additionally, symposia were held to broadly disseminate key concepts and processes of the VBC model to newly established IPU work groups, senior hospital leaders, patient representatives, and staff members from all areas and position levels.

Operationalization and Rollout

Each IPU working group developed process maps of care pathways that accounted for all resources and activities associated with patient care. This included baselining current care and then incorporating the patient’s perspective into a redesign. In the process, the groups identified variations in provider practice and found that the needs of providers, not patients, were often driving care pathways (e.g., in the use of medical resources, frequency of lab tests, and timing of follow-up appointments). The team then modified pathways to better address patient needs and goals.

The work groups also determined six to eight core metrics for each condition, including patient-reported outcomes measures (PROMs), process measures, and quality measures. PROMs included measures adopted for osteoarthritis and low back pain developed by the International Consortium for Health Outcomes Measurement (ICHOM). The pregnancy IPU chose a functional outcome survey outside the ICHOM standards to address concerns of pregnant patients uncomfortable with discussing personal issues with providers. Since the ICHOM had not yet published its diabetes publication, the diabetes IPU team adopted a non-ICHOM functional outcomes questionnaire.

Finally, for each of the four conditions, a separate team used a time-driven activity-based costing approach to analyze process maps and other sources of data to determine the cost of treating patients within the IPU compared with the cost of treating a matched control group of patients in a standard clinical setting.

In October 2016, the four IPUs were rolled out simultaneously. Initially, only a segment of the population for each condition participated, so as to optimize implementation, capture lessons learned, and prioritize for the most complex medical cases (e.g., active duty patients with moderate chronic back pain, patients with severe osteoarthritis ineligible for a joint replacement, patients with A1C glucose levels greater than 11, and patients with complicated pregnancies).

The IPU Process

At each IPU, teams lead patients through evidence-based clinical pathways, work with them on shared decision-making, and collect PROM data. Patients have a single point of contact, experience coordinated care, and have their goals and needs drive their care.

Except for the low back pain IPU, where a physical therapy appointment precedes IPU entry, all IPU teams established a similar structure for conducting group appointments, or round robins. The patient meets the IPU team and is invited to share his or her story, after which the team may present an overview of the IPU. Providers then break off into separate rooms to individually consult with the patient, who carries a “score card” to be filled in by each provider with information for subsequent care or follow-up appointments. The full cycle of care could involve multiple specialists and support services, including nutrition, wellness, behavioral health, pain management, pharmacy, neurology, orthopedics, radiology, and physical therapy. At the end of the “IPU day,” a care navigator compiles the information gathered and coordinates follow-up care. PROM data is collected during the initial appointment and then at intervals specific to each IPU.

Early Lessons and Next Steps

Although we do not yet have quantitative data on IPU performance, the pilot is yielding invaluable, positive insights on the overall IPU experience. In general, providers found the IPU structure accommodating for themselves and their patients. Primary care and internal medicine providers felt able to work more fully with patients within their scope of expertise, knowing that other providers would address specific complementary needs. However, they stressed the importance of the good relationships and clear communications that were fostered among peers, with one physician suggesting that future rollouts include “training for interprofessional teams [because] not every provider will have that background.”

Care navigators are proving exceptionally beneficial for providers by freeing them up from the burdens of coordinating care. They manage patient intake, gather clinical information, call and schedule patients, coordinate IPU days, score PROMs, track patient panels, facilitate treatment boards, and liaise between patients and providers.

Most patients saw IPU days as a “time saver” and agreed that it helped them to have a care navigator who understood their “story” and challenges, removed barriers to care, and wrangled follow-up appointments.

Buy-in for the pilot has also been very strong. Although the move to a VBC model was a directive issued by the Navy Surgeon General, the support provided by Navy Medicine and the commanding officer of NHJ has been key to the successful implementation of the four IPUs. Additionally, the decision to reduce the visibility and measurement of relative value units (RVUs) played a significant role in getting provider and staff buy-in.

Finally, during the pilot’s initial 3 months, the program focused on the most complicated and severe segments of the patient population to refine the processes and care pathways. As patients have progressed through the IPUs — and as the pilot runs its course until October 2017 — the teams are beginning to assess applicability at other Navy military treatment facilities.


With convenience, experience of care, and technology increasingly driving the health care choices of most active duty sailors and marines, achieving the mission of Navy Medicine to “keep the Navy and Marine Corps family ready, healthy, and on the job” requires rethinking current health care delivery models. The VBC pilot is allowing Navy Medicine to test whether it can better achieve its mission by providing beneficiaries coordinated, integrated care through an IPU model focused on meeting patient needs and quality-of-life priorities. Early results indicate that such a model could prove beneficial to Navy Medicine.


Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the Department of the Navy, Department of Defense, nor the U.S. Government. Acknowledgement of the support received from Johns Hopkins University Applied Physics Lab does not imply Department of the Navy, Department of Defense, nor U.S. Government endorsement or preferential treatment of any non-federal entity or any non-federal entity events, products, services, or enterprises.

Copyright Statement: I am a military service member. This work was prepared as part of my official duties. Title 17, USC, §105 provides that “Copyright protection under this title is not available for any work of the U.S. Government.” Title 17, USC, §101 defines a U.S. Government work as a work prepared by a military service member or employee of the U.S. Government as part of that person’s official duties.

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