What Does VALUE Mean In Health Care?

By Jerry Clark, MD, chief medical officer and president, Premier Health Group; chief medical officer, Premier Health Plans; and chief executive officer, Premier Health ACO of Ohio

Value is a popular buzzword in health care. Physicians/providers, employers and patients should each contribute to this definition. It’s important that each stakeholder be in alignment if we are going to be successful in affecting health care costs and outcomes in the United States, which make up a $3.3 trillion sector, consuming approximately 20 percent of our economy. In most industries, value is defined by the consumer as cost, service (including accessibility) and quality (effectiveness/outcomes). The question is how each of those should be prioritized.

Cost refers to the total price of a full cycle of a patient’s care, not the cost of individual services. To reduce costs, we should spend more on some services to reduce the need for others. The entire health care team is required to affect this. The benefits of one intervention will depend on the effectiveness of all other interventions throughout the care cycle. Therefore, we must eliminate silos in our health care delivery system. We can’t blame another specialty provider or a hospital or a patient’s compliance for less-than-ideal total cost of care or excellent outcomes – we must have joint accountability for both cost and ultimate outcomes. We need to focus our metric measurements away from what an individual provider controls; a single department (too narrow to be relevant to a consumer); outcomes of an entire hospital (too broad to be relevant to a consumer); or measuring what is billed. Instead, we need to measure adherence of the care team to evidence-based guidelines and metrics that measure outcomes – not processes.

In short, “value” in health care is measured by the outcomes achieved, not the volume of services delivered. Value, for consumers, also increasingly includes the quality of the patient-family experience and interpersonal interactions. Therefore, we continue to see a shift in the United States from focusing on volume to focusing on value. Although the pace of this movement has slowed somewhat in our current White House administration, the march will continue. As physicians and medical staff, I propose to you that we cannot be complacent in the current fee-for-service-dominated reimbursement environment. We need to lead changes in the organizational and leadership structure to create the cultural transformation to a system- or team-based care delivery model, with all of us accepting joint accountability for our patients’ outcomes. This requires investment of time and money to lead that change. And it should be done with physicians at the helm. Premier Health has a good start on this transformational process, but we can’t take our foot off the gas. The health care system is broken and not sustainable. WE should be part of the solution.

Please enjoy this five-minute video created to explain Premier Health’s definition of value. 

Back to the January 2018 issue of Premier Pulse