Driving Better Patient Outcomes at Lower Cost with Logex Technology

A fundamental problem in healthcare is that healthcare providers typically are paid based on volume of services, not accounting for value and quality. Combined with poor transparency, this leads to increasing costs and unwarranted variance in both outcomes and cost between providers, regions and countries. Payment that only reward volume is also a key inhibitor of organizational innovation and adoption of new technology in health care.

Driving Better Patient Outcomes at Lower Cost with Logex Technology

A fundamental problem in healthcare is that healthcare providers typically are paid based on volume of services, not accounting for value and quality. Combined with poor transparency, this leads to increasing costs and unwarranted variance in both outcomes and cost between providers, regions and countries. Payment that only reward volume is also a key inhibitor of organizational innovation and adoption of new technology in health care.

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In 2013, IVBAR (Logex Group subsidiary) was commissioned by the Stockholm County Council (”SLL”) to introduce a new payment model for spine surgery that made health care providers accountable for delivering high value service. IVBAR configured a bundled payment model on the Era platform, where one pre-determined price would be paid for the entire episode of care, including cost of potential complications.

The model only allowed price adjustment based on (i) patient reported pain reduction after one year, and (ii) patients’ medical and socio-demographic preconditions. The model covered over 1,700 patients per annum with a transaction value of about USD 12 million, representing 70% of all spine surgery in Stockholm.

Commonly used payment (fee for service)
Traditional payment models reward volume

Payment 1
Hospital Admission
Screenshot 2020-03-31 at 22.41.14

Patient admitted to hospital Payments incurred piecemeal

Bundle Payments (Value for Fee)

Bundled payment models aim to achieve improved care quality, coordination and efficiency by incentivizing health care providers to focus on the full care cycle instead of single activities. By fixing the price, healthcare providers are required to consider the value and quality achieved across the entire care episode, thereby creating incentives to reduce costs and increase quality of the care provided. SLLs initiative on spine surgery had positive effects on the cost of care as well as the outcome achieved from treatments.

The total volume of surgeries increased by 13%, at constant overall cost. However, cost per episode declined by 9%, and the average cost per surgery fell by 7%. The largest part of surgeries, Lumbar Spinal Stenosis " (covering ~50 % of all operations) saw significant decline in reoperation rates and use of post-operation physiotherapy. This is one example of how Logex Group’s technology enable healthcare systems to deliver better patient outcomes at lower cost.

%
increase in number of surgeries, at constant overall cost
%
increase in number of surgeries, at constant overall cost
%
increase in number of surgeries, at constant overall cost

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Within the Changing Demographics investment theme we have a few broader sub-themes such as healthcare, education and security, all with clear alignment to one or more of the UN SDGs. Healthcare is by far the largest one as healthcare expenditure typically represents 10%+ of GDP in advanced economies. It is also the sub-theme where Summa has our deepest expertise and current primary focus within the Changing Demographics theme.

Our investment strategy in healthcare is in itself centered around three universal challenges; cost, quality and unmet patient needs, where society’s failure to solve them leads to a development of an unsustainable global healthcare system. With the challenges as a starting point, we look for companies and market niches where solutions are developed that have the potential to move the system in a positive direction, in the Nordics and globally. We refer to this investment strategy as “The Future of Healthcare” where we have defined specific themes that represent solutions to the challenges, to focus our efforts – illustrated in the chart below. These themes cut across products and services. We believe that developing leading expertise along these themes will be key to Summa’s long-term success and ability to support our investments, and therefore we invest significant resources in building that competence base.

Projected industry growth

2020
+4
136
2019
118
SDG 15

Projected industry growth

2020
+4
136
2019
118

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Thought leader and preferred digital partner to the educational sector

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Arthur Swanson

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Lin Education

Thought leader and preferred digital partner to the educational sector

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Infobric

Arthur Swanson

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