Rethinking value in healthcare

Rethinking value in healthcare

In order to create sustainable healthcare systems it is not enough to make gains in individual treatment areas; real progress can only come from taking a holistic view of the patient.

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Traditional organizational divisions must be broken down to enable different caregivers to complement each other’s interventions, with every contributor to the care continuum sharing a common view of ‘value.’

As health budgets come under increasing strain, and care becomes more patient-centered, governments, payers and providers are moving their focus from volume to value. Definitions of value can vary, but in its simplest form it can be described as: outcomes of care divided by the cost of care.

Outcomes are heavily affected by the appropriateness of care, which could in some cases involve a decision not to treat. For example, there is no sense paying for a perfect hip replacement if the patient would have been better off not having the operation in the first place.

To illustrate the different needs of patients, we contrast Mr. Johnson, a 40-year-old with a single condition, and Mrs. Murphy, who is twice his age and suffering from multiple morbidities. The treatment, the outcomes as defined by the patient and the care coordination will all differ significantly.

Mr. Johnson Mrs. Murphy
Patient with a single health condition Patient with multiple health conditions
Age: 40 Age: 80
Condition: damaged knee cartilage Conditions: diabetes, cardiovascular disease, colorectal cancer, husband with dementia.
Treatment: arthroscopy from a specialist surgeon, physiotherapy Treatment: multiple parties on an ongoing basis including community services for husband
Outcome: able to walk, carry out vigorous exercise and be pain-free Outcome: dependent upon the patient’s expectations, but could include: ability to live at home; fewer or no diabetic episodes; full remission from the cancer; greater personal mobility
Care type: focus clinic and related physiotherapist both specializing in knee problems Care type: coordinated care between specialist, GP and community services 


A single provider should find it relatively easy to calculate value, with quality reflected in a successful outcome of an intervention such as an operation, drug regime or physiotherapy. Several health systems around the world have excellent records for delivering against such goals, thanks to efficient processes and skilled practitioners.

However, more and more patients are now suffering from co-morbidity, as populations’ age and lifestyle diseases proliferate. About half of all adults in the US (117 million people) have one or more chronic health conditions such as cardiovascular disease, cancer, diabetes, and chronic respiratory disease.

In these instances, the value of a single treatment cannot be viewed in isolation, as it may be dependent upon the success of one or all of the other therapies. Even those with a single disease may receive care from a range of providers, where a weak link in the continuum can damage the final outcome, as a result of hospital acquired infections, or inadequate physiotherapy, for example.

Important as they are, clinical indicators such as positive blood-test results are too narrow a definition of health outcome. At the highest level, true value is reflected in measures such as the ability to return to work, overall wellness and quality of life – as perceived by the patient – which are influenced by his or her entire journey through the health system.

However, value is also determined by the cost relative to outcomes and can be measured in terms of the efficient use of resources such as operating theatres, successful interventions, patient adherence to treatment and waiting times. Traditional medical boundaries are being stretched to include patients, caregivers and communities, all of whom are playing a more prominent role in care pathways. 

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