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  .
Though no agreed upon definition, the goal of Value-based Healthcare and generating value evidence is to maximise the ‘value of care for patients’ and reduce the overall cost of healthcare . Porter (2006), in his book “Redefining Healthcare”, states [Figure 1] that this value is achieved 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 how healthcare delivery is organized, 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)” .
The goal of healthcare services are to create a healthier society. However, healthcare costs continues 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  :
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, some of 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) are financially rewarded 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 benefits of Value-Based Healthcare are inclusive for patients, providers, payers, suppliers and society [Figure 4]  :
Value-based Healthcare is patient-centric, encouraging a coordinated and holistic 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  .
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.
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 M. E. Porter and E. O. Reisberg, Redefining Health Care: Creating Value-Based Competition on Results, Boston: Harvard Business School Press, 2006.
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