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How Value Gives Healthcare Providers an Edge

Philip Betbeze, for HealthLeaders Media, September 10, 2013

What is value?

Proxies for value are often price and quality, but value can be difficult to discover where prices are obscured by the third-party payer system, among many other factors peculiar to healthcare. Quality often can be determined only by measuring factors that aren't clear until long after service is rendered, if ever. But science and intelligence based on data is getting better.

"We are on the path of understanding how information needs to be presented to affect how people make decisions," says Anne-Marie Audet, MD, vice president for health system quality and efficiency at the Commonwealth Fund, a New York City–based private foundation that focuses on access and quality. On the individual consumer level, she says, much of the work is currently in behavioral economics, noting the fact that some healthcare consumers perceive that higher prices indicate higher quality. There is no correlation, but because of this belief, it's "really important how we present data."

On the employer side, things are progressing much more rapidly, she says, but even though employers have much more sophisticated ways of measuring value, there is still a concern about who is determining value: namely, an entity that has a vested interest in cost savings.

"Employers can play a big role in directing consumers to high value," she says. "But now of course we have the exchanges that will be coming up, and people will have to select their coverage and providers, and that's another big opportunity to steer to high value."

Robert Pryor, MD, MBA, president and CEO of Scott & White Healthcare in Temple, Texas, which is one of the approved facilities in the Walmart program, says linking pricing to value can be misleading because, especially in healthcare, cost and quality are not always linked. He also notes that pricing is based on a complex set of factors that may include where a procedure is performed, the number of similar procedures an organization performs, and variations with the pricing of products necessary for a particular intervention.

Getting to high-value care, at least for Scott & White—a nonprofit healthcare system that includes 12 acute care hospitals, 140 clinics, and a health plan—is dependent more on producing a quality outcome than lower prices.

"We find through the proper application of medical judgment and skill, we are able to provide the best solution to the patient's medical need and avoid unnecessary or inappropriate procedures that can increase cost … hence, right care, right place, right time," he says.

And volume is a key factor in that strategy.

"Our agreement with Walmart enables us to treat patients from outside Scott & White's normal catchment area," he says.

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1 comments on "How Value Gives Healthcare Providers an Edge"


S Willson (9/16/2013 at 5:26 AM)
Good post. Thanks for writing it.