Globally and within the GCC, “Value Based Healthcare” has come to be one of the hottest topics and widely used terms in modern day healthcare. It’s highly unlikely that any government, healthcare strategy provider or teams on a transformation agenda mission exclude these three buzz words.
Although the words are commonly used, the question that comes to mind is is there actually a consensus or common interpretation of what “Value Based Healthcare” actually means or indeed how to achieve it? Can any healthcare system today claim that they have successfully “cracked the code” of both defining and measuring value for every patient and member of the population, regardless of whether they are sick or healthy?
What is “Value based Healthcare”?
Fortunately, there seems to be a universal agreement on the definition of value as a concept. In 2006, Michael Porter defined value as outcomes (that matter to patients) divided cost. Neither the numerator nor the denominators are new concepts though. Donadedian introduced outcomes as a measure of quality, in the 1980’s while cost is one element of Kissick’s famous iron triangle (cost, access, quality) which is core to health system management since the 90’s. While Porter offers a specific six component VBH model that has been adopted in a number of pilots around the world, there are other models for implementing VBH that all aim to achieve higher value.
What outcomes matter to patients?
The difference between clinical and patient-reported outcomes measures (PROM) can be illustrated by a well-known example from Sweden. While data from the Swedish Cataract Registry showed that the majority of patients had indeed improved long vision following cataract surgery, patients reported lower ability to perform their previous activities which required short vision and were actually feeling worse after treatment. This is because there was no follow up with the patients or post-treatment prescription of reading glasses. This illustrates the importance of focusing on outcomes from both a clinical and a patient-reported perspective to be able to deliver high value.
How much does it cost to deliver good patient outcomes?
It is unclear and most systems around the world today still have challenges in understanding how much it exactly costs to deliver care itself, let alone being able to estimate how much it costs to deliver good outcomes. However, what we do know is that at the macro level, health expenditure continues to rise globally with the United States being the highest. Literature shows that there is significant variance in the costs for delivering the same or similar procedures across different countries or states. This highlights a much more severe issue at the micro level, which is understanding actual costs of care at the provider level. While a very few countries such as Australia lead the world in clinical costing practices in their public system, it still does not tie costs to outcomes; and most countries around the world and the region still struggle in this area.
Current Health Expenditure
What are the drivers and themes associated with moving towards a VBH model?
Healthcare systems globally are facing key challenges and megatrends that are shaping and driving the move towards keeping populations well, enhancing the role of patients and information, and reforming the way care is accessed, delivered and funded. These include:
Key observations from the implementation of value based healthcare models
There are common themes across the various implementations of VBH from around the world as well as common challenges. The common goal is enhancing value by improving outcomes and reducing costs. The approach differs. The below key observations across both international and regional healthcare systems are based on literature as well as PwC’s experience:
The impact of COVID-19 on Value Based Healthcare
During the COVID-19 pandemic, healthcare systems have witnessed a major disruption to elective and chronic care services leading to a setback in the continuity of care for millions of patients worldwide. In a WHO survey, 82 out of the 155 countries surveyed reported disruption in their hypertension treatment services and 78 countries reported the same for diabetes treatment (more than 50% for both chronic conditions).
The management of the pandemic has also put a huge strain on healthcare systems to “flatten the curve” and preserve human and physical capacity within the healthcare systems to treat those most severely affected by the disease.
COVID-19 had an impact on how patients perceive value in healthcare as well as providers’ behaviours. Due to limited physical accessibility to facilities, patients became more accustomed to a virtual delivery model.
It has forced healthcare systems to adapt to new ways of care delivery and resulted in wide acceptance of emerging technologies and successful implementation of virtual and digitally-enabled care practices.
In the long run, COVID-19 will accelerate the adoption of value based care models due to the identified need to focus efforts on activating patients and facilitating management of chronic, elective and noncommunicable disease cases.
It has shed light on what really matters to patients in times of need. It eliminated the overuse and abuse of unnecessary services that put pressure both on patients as well as healthcare systems and focused health resources on what matters most.
This concludes Part 1 of this Thought Leadership piece. Part 2 will explore the perspective of the GCC population on the value of healthcare services.
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