Health is an intrinsic value and a precondition for pursuing a ‘good life’. Whilst universal healthcare provides equitable health to the population, most healthcare systems have strategies to improve quality of healthcare while reducing costs  . The promise of value-base healthcare, or care delivered under value-based contracts, is receiving much attention .
Under a Value-based Healthcare model; healthcare services provided by hospitals, laboratories, doctors, nurses and others are reimbursed based on the health-outcomes of their patients and the quality of services rendered .
Though no agreed upon definition, the goal of Value-based Healthcare and generating value evidence is to maximize the ‘value of care for patients’ and reduce the overall cost of healthcare . Porter (2006) states [Figure 1] that health systems may achieve value by dividing patient-relevant outcomes by the costs per patient across the full cycle of care   .
In taking this concept of value forward, Porter (2013) suggests a new strategy called the “value agenda”, for moving to a high-value healthcare delivery system; requiring restructuring on the delivery of healthcare, measured and reimbursed  .
This six-component system  includes five actions underpinned by a supporting information technology platform [Figure 2]. It leads to value in healthcare by obtaining the best clinical outcomes and patient experience, at the lowest cost  .
Some question the narrow focus of this business approach to healthcare   . In Europe, the concept of Value-Based Healthcare is broader in ‘The Expert Panel On Effective Ways Of Investing In Health’ (EXPH) and includes patient personal goals and societal contribution .
In 2019, the EXPH [Figure 3] suggested a definition for Value-Based Healthcare: “a comprehensive concept built on four value-pillars: appropriate care to achieve patients’ personal goals (personal value), achievement of best outcomes with available resources (technical value), equitable resource distribution across all patient groups (allocative value) and contribution of healthcare to social participation and connectedness (societal value)” .
Historically, healthcare reimbursement follows a Fee for Service (FFS) model, which is a system of healthcare payment where a provider payments are separate for each service rendered. It drives volume and not value, as payments depend on quantity, not quality  . The FFS model is one of the major drivers of the high costs of healthcare. It promotes the use of more tests, procedures and treatments, which may not be supported by evidence-based medicine  . The FFS model also contributes to the decline in primary-care workforce and its inability to meet patients ‘health maintenance’ needs .
The transition to value-based healthcare based on patient outcomes (i.e., valued based care vs fee-for-service), is a strategy that encourages quality rather than quantity. It shifts the focus on care of individuals to services that keep societies healthy, reducing overall costs on healthcare   . Providers (HCPs) receive financial rewards for positive patient outcomes, efficient delivery of care, and encouraged to engage with patients, giving them a connected care experience. Value-based healthcare also promotes a coordinated team approach to improve efficiency and patient satisfaction  .
The goal of healthcare services is to create a healthier society. However, healthcare costs continue to soar, showing no signs of slowing, and sometimes outpaces inflation  . In value-based healthcare, improving value requires improvement of one or more outcome without raising costs, or lowering costs without compromising outcomes .
Value-based healthcare offers a radical transformation of healthcare systems. It enables transitioning from volume-based to value-based healthcare delivery and payment systems. Value-Based Healthcare focuses on the ‘quality of care’, rather than the ‘quantity of care’; the overall wellness of the patient and better outcomes are key to being compensated .
Value-Based Healthcare is important because it  :
At the centre of a value-based healthcare system [Figure 3], is a robust multidisciplinary team. They work together with the patient and caregiver to identify and address the individual healthcare needs of each patient.
Stakeholders develop well-structured frameworks to assess the value of medical treatments  . These value assessments should reflect the unique health needs of different stakeholders. They should also include individual patients, who often respond differently to medicines based on factors such as age, genetic variation and comorbidities .
A dedicated, co-located, multidisciplinary team of caregivers designs and delivers a comprehensive solution to those needs. This integrated team measures meaningful health outcomes for each patient and the costs of its services and then learns from that information to drive ongoing improvements in care and efficiency .
Partnerships amongst clinical organisations may also expand as teams gain more expertise and ability to work across more stages of the care cycle or in more locations. Integrated teams work with partners, such as using new technology to share information with patients, supporting rural physicians as they provide care closer to patients’ homes, or offering to support lifestyle changes in a community.
These are natural partnerships, as the shared goals of creating high value and achieving better health outcomes for patients. They align with the interests of patients, family members, employers, health plans, and clinicians, as well as medical technology suppliers whose services may facilitate these relationships .
A healthy business needs healthy employees, and the most seamless way to achieve positive health outcomes at a low cost is to get strong patient engagement in preventive care. Though preventative care may yield an upfront cost for employers, this cost will be lower than the cost which occurs during a high-acuity encounter. For example, administering vaccines is less costly than treating a patient who becomes seriously ill with the virus . Employers would be more willing to contract directly with providers and pay more per episode of care than they had previously, because faster and fuller recovery reduces other employer costs, such as those associated with absenteeism .
Open communication and sharing of information among care teams, carriers, and patients enhances trust and engagement. It also empowers patients to take better care of themselves between visits, critical elements for the success of prevention strategies and care management programs .
Kaiser Permanente (one of America’s leading healthcare providers) uses “in reach” and “outreach” efforts to strengthen the interaction between the patient and caregivers to achieve the desired outcomes. An example is a program introduced in 2004 in the Northern California region called Prevent Heart Attacks and Strokes Everyday (PHASE). The program uses various interventions including drugs prescriptions, whenever appropriate, and promoting four lifestyle changes. These include tobacco cessation and physical activity, and controlling blood pressure, lipids, and glucose among patients at risk for cardiovascular disease across primary, secondary and tertiary levels.
Finally, as health outcomes improve, evidence of better care creates opportunities for the team to serve more patients through expanded partnerships .
Value-based healthcare is a patient-centric model that saves money and improves outcomes . Porter (2010) defines value around the customer and that the creation of value for patients should determine the rewards for all other actors in the system . Value-based healthcare organizes around patients with shared needs and demonstrating better value in care creates opportunities and improves health outcomes for more people .
A patient-centric model that aligns the patient’s needs with the interests of healthcare provider focuses on an integrated approach to patient care . Problems such as obesity, tobacco and alcohol addiction, or opioid abuse cause most of the health issues in the long-term. A key step towards ensuring a healthier population includes managing these factors through awareness campaigns and through the day-to-day work of the healthcare teams .
In order to be efficiency, value-based healthcare is organized around segments of patients with shared health needs, such as “people with knee pain” or “elderly people with multiple chronic conditions”. Organizing care this way allows clinical teams to anticipate consistent patient needs and provide frequently needed services efficiently. The efficiency afforded by structuring care around patient segments frees clinicians from scrambling to coordinate services that are needed routinely [Figure 5]. The added capacity allows them to personalize services for individual patients who may have somewhat different needs .
The benefits of Value-Based Healthcare are inclusive for patients, providers, payers, suppliers and society [Figure6]  :
Value-based healthcare is still evolving, and ways of improving the model are ongoing. No country has the ideal environment for value-based healthcare. There are very similar enablers and barriers that exist in different countries , , .
Value-based Healthcare is patient-centric, encouraging a coordinated and integrated approach to patient health, improving both quality and efficiency . It focuses on preventative medicine, and better management of chronic conditions, while reducing the overall cost of healthcare . It rewards healthcare providers for positive patient outcomes and efficient delivery of care  .
A few factors may prove pivotal in accelerating the implementation of value-based care across different health care systems . These include strengthening government involvement in driving change, focusing on continuous IT improvements to ensure the availability of outcome data across the full care cycle, and instituting a value-based healthcare culture among providers.
The transition of reimbursement from a quantity-based model (FFS) to a bundled reimbursement model focusing on quality aims to benefit all stakeholders  . Value-Based Healthcare is inclusive for patients, providers, payers, suppliers and society  .
At Syenza we accelerate value based healthcare systems through pricing consulting, pharma market access consulting, and healthcare consulting. We support value-based healthcare systems with strategies to increase value by improving patient outcomes with new reimbursement models. Learn more by contacting us for further details.
 N. Zipfel, P. B. van der Nat, B. J. Rensing and et.al., “The implementation of change model adds value to value-based healthcare: a qualitative study,” BMC Health Services Research, pp. 1-12, 2019.
 European Commission, “Defining Value in Value-Based Healthcare,” European Union, Luxembourg, 2019.
 AETNA, “Better health at lower costs: Why we need Value-Based Care now,” 2021. [Online]. Available: https://www.aetna.com/employers-organizations/resources/value-based-care.html. [Accessed 13 December 2021].
 Vintura, “What is Value Base Healthcare,” 2013. [Online]. Available: https://www.vintura.com/en/life-science-consulting/value-based-health-care/michael-porters-definition/.
 M. E. Porter and E. O. Teisberg, Redefining Health Care: Creating Value-Based Competition on Results, Boston: Harvard Business School Press, 2006.
 M. E. Porter, “Value-Based Health Care Delivery,” in Value-Based Health Care Seminar, Boston, 2014.
 M. E. Porter and T. H. Lee, “The Strategy That Will Fix Health Care,” Harvard Business Review, October 2013.
 Harvard Business School, “Value Based Healthcare: Key Concepts,” 2018. [Online]. Available: https://www.isc.hbs.edu/health-care/value-based-health-care/key-concepts/Pages/default.aspx. [Accessed 16 March 2020].
 P. Matley, “Value-Based Care: Why we need it and how to get it?,” Discovery Corporate, 2018 March 2018. [Online]. Available: https://www.discovery.co.za/corporate/value-based-care. [Accessed 16 March 2020].
 S. A. Groenewoud, G. P. Westert and J. A. Kremer, “Value based competition in health care’s ethical drawbacks and the need for a values-driven approach,” BMC Health Services Research, vol. 19, no. 256, pp. 1-6, 2019.
 D. Gurley, “Value Based Healthcare: What agents should know and share with their clients,” 16 November 2018. [Online]. Available: https://redbirdagents.com/value-based-healthcare-and-why-its-important/. [Accessed 11 March 2020].
 L. Sanicola, “What is Value-Based Care?,” 02 February 2017. [Online]. Available: https://www.huffpost.com/entry/what-is-value-based-care_b_58939f9de4b02bbb1816b892.
 J. Tsevat and C. Moriates, “Value-Based Health Care Meets Cost-Effectiveness Analysis,” Ann Intern Med., vol. 169, pp. 329-322, 2018.
 M. Fakkert, F. van Eenennaam and V. Wiersma, “Five Reasons Why Value-Based Healthcare is Beneficial,” HealthManagement.org, vol. 17, no. 1, pp. 34-36, 2017.
 A. M. Lockner and C. A. Walcker, “INSIGHT: The Healthcare Industry’s Shift from Fee-for-Service to Value-Based Reimbursement,” Bloomberg Law, 26 September 2018. [Online]. Available: https://news.bloomberglaw.com/health-law-and-business/insight-the-healthcare-industrys-shift-from-fee-for-service-to-value-based-reimbursement. [Accessed 16 March 2020].
 The Fox Group, “How does Fee for Service compare to Value Based Reimbursement,” 13 September 2019. [Online]. Available: https://www.foxgrp.com/assessment-benchmarks/fee-for-service-vs-value-based-reimbursement/. [Accessed 12 March 2020].
 NEJM Catalyst, “What is Value-Based Healthcare?,” 1 January 2017. [Online]. Available: https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0558. [Accessed 16 March 2020].
 I. Putera, “Redefining Health: Implication for Value-Based Healthcare Reform,” Cureus, vol. 9, no. 3, pp. 1-11, 2017.
 Phrma, “Collaborating on Better Approaches to Value,” 2021. [Online]. Available: Collaborating on Better Approaches to Value. [Accessed 12 December 2021].
 E. Teisberg, S. Wallace and S. O’Hara, “Defining and Implementing Value-Based Health Care: A Strategic Framework,” Acad Med, vol. 95, no. 5, pp. 682-685, 2020.
 Xtelligent Healthcare Media, “Defining Patient Engagement for Value-based CAre,” 14 October 2021. [Online]. Available: https://patientengagementhit.com/features/defining-patient-engagement-for-value-based-care. [Accessed 03 January 2022].
 St. Georges University., “What Is Value-Based Care? Explaining This Patient-Centered System,” 01 January 2019. [Online]. Available: https://www.sgu.edu/blog/medical/what-is-value-based-care/. [Accessed 17 December 2021].
 M. Porter, “What is value in health care?,” N Engl J Med., vol. 363, pp. 2477-2481, 2010.
 P. Redondo, M. Ribero, M. Lopes and F. Gonçalves, “Holistic view of patients with melanoma of the skin: how can health systems create value and achieve better clinical outcomes,” ecancermedicalscience, vol. 13, 2019.
 Legit Health, “Value-based healthcare, the 5 basic principles that will change the world of medicine,” 21 October 2021. [Online]. Available: https://legit.health/5-basic-principles-of-value-based-healthcare/#ib-toc-anchor-6. [Accessed 21 December 2021].
 C. Mjåset, U. Ikram, N. Nagra and T. Feeley, “Value-Based Health Care in Four Different Health Care Systems,” NEJM Catalyst, 2020.
 “Adding Value to the Health with a Value-Based Healthcare Model,” 21 October 2020. [Online]. Available: https://www.delveinsight.com/blog/value-based-healthcare. [Accessed 21 December 2021].
 L. Hurst, K. Mahtani, A. Pludderman and et.al., “Defining Value-based Healthcare in the NHS,” CEBM, Oxford, 2019.
Panel Theme “Together for Access to Innovative Treatments.” 20 June 2022. Organizer Todos Juntos Contra on Cancer (TJCC). TJCC is composed of more than 200 institutions from different sectors engaged in improving cancer care in Brazil and aims to improve policies for Oncology. https://tjcc.com.br/ Panelists Prof. João L. Carapinha Dr. Antonio Carlos Buzaid Dr. José […]Read all
What is Budget Impact Analysis? Pharmacoeconomic analyses in healthcare are paramount, because of the high costs of innovative technologies and limited possibilities of their funding. Budget Impact Analysis (BIA) is one such analysis that provides vital information for healthcare decision makers.  Unlike economic evaluations, such as cost-effectiveness analysis (CEA), cost-utility analysis (CUA) and cost-benefit […]Read all
Introduction Health technology assessment is the “multidisciplinary field of policy analysis, studying the medical, economic, social and ethical implications of development, diffusion, and use of health technology” (INAHTA, 2018). It aims to improve access to innovative treatments whilst rewarding producers of new technologies for their research and development efforts. Health technology assessments test the value […]Read all