What Is Value in Health Care? | Health Policy and Reform

 


by Michael E. Porter, Ph.D.

Two framework papers that develop the concepts outlined in this article, “Value in Health Care” and “Measuring Health Outcomes,” are available as Supplementary Appendixes.

In any field, improving performance and accountability depends on having a shared goal that unites the interests and activities of all stakeholders. In health care, however, stakeholders have myriad, often conflicting goals, including access to services, profitability, high quality, cost containment, safety, convenience, patient-centeredness, and satisfaction. Lack of clarity about goals has led to divergent approaches, gaming of the system, and slow progress in performance improvement.

Achieving high value for patients must become the overarching goal of health care delivery, with value defined as the health outcomes achieved per dollar spent.¹ This goal is what matters for patients and unites the interests of all actors in the system. If value improves, patients, payers, providers, and suppliers can all benefit while the economic sustainability of the health care system increases.

Value — neither an abstract ideal nor a code word for cost reduction — should define the framework for performance improvement in health care. Rigorous, disciplined measurement and improvement of value is the best way to drive system progress. Yet value in health care remains largely unmeasured and misunderstood.

Value should always be defined around the customer, and in a well-functioning health care system, the creation of value for patients should determine the rewards for all other actors in the system. Since value depends on results, not inputs, value in health care is measured by the outcomes achieved, not the volume of services delivered, and shifting focus from volume to value is a central challenge. Nor is value measured by the process of care used; process measurement and improvement are important tactics but are no substitutes for measuring outcomes and costs.

Since value is defined as outcomes relative to costs, it encompasses efficiency. Cost reduction without regard to the outcomes achieved is dangerous and self-defeating, leading to false “savings” and potentially limiting effective care.
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Measurement Framework: Evaluating Efficiency Across Patient-Focused Episodes of Care

Although health care spending per capita in the United States is more than double that of other industrialized nations, the United States ranks comparatively low on key indicators of the quality of care and population health status. Inefficiencies such as duplicate tests and widespread regional practice variations plague the system. Performance measurement is essential to system transformation. To provide guidance to key stakeholder groups in accelerating toward a high-performing, high-value healthcare system, the National Quality Forum (NQF) convened a Steering Committee to develop a framework for evaluating the efficiency of care over time, including clear definitions and a shared vision of what can be achieved around quality, cost, and value, serving as a foundation for the work of larger performance improvement efforts. This report presents the NQF-endorsed® measurement framework for assessing efficiency, and ultimately value, associated with the care over the course of an episode of illness and sets forth a vision to guide ongoing and future efforts.

 Access the Report