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What Does 'Value' Mean in Healthcare?

Analysis  |  By John Commins  
   December 11, 2017

Is it all about service, or quality or cost? Patients, employers and physicians have conflicting notions of what constitutes value, and that could have costly consequences for the $3.3 trillion healthcare sector.  

What do we mean when we talk about healthcare "value"?

It depends upon who’s talking.

A survey commissioned by University of Utah Health of 5,031 patients, 687 physicians and 538 employers across the nation found that, while most stakeholders agree that healthcare must deliver "value," it's not clear what that means, or how they’d prioritize the components of cost, service, and quality.

"There is not universal agreement across those three critical voices as to what value constitutes," says Bob Pendleton, U of U Health’s chief medical quality officer. "That is problematic, as we try to work towards a shared vision of what a high-value health system looks like for the country."

For example, when asked to prioritize quality, cost or service as components of value:

  • 88% of physicians ranked quality (defined as the efficiency, effectiveness, safety and outcomes) as the top priority, compared with 62% of patients, and 20% of employers.
  • 43% of employers ranked customer satisfaction, or service, as a top priority of value, compared with 12% of patients, and 7% of physicians.
  • 37% of employers said cost was a top component of value, followed by 26% of patients, and only 5% of physicians.

Pendleton says the responses show that value is nuanced and multi-dimensional.

"We do need to be talking about each of these voices," he says. "Collectively they’re saying that the convenience and accessibility of healthcare is of critical importance to patients, that the cost of healthcare is important to all three players, but especially for patients who have an increasing out-of-pocket burden and employers who continue to pay for rising premiums. The providers have a stronger grounding in the traditional quality outcomes."

As for why agreement on value matters, Pendleton said that it's about setting priorities for a $3.3 trillion sector that consumes nearly 20% of the economy.

"If we don’t have agreement for what we want for that enormous price tag, then it becomes problematic," he says. "We can keep spending more and more on healthcare but if we don’t have clarity on the results we are trying to achieve we are never going to be able to come up with effective and viable solutions."

Answering the question of what constitutes value is even more complex, Pendleton says, because there are no right or wrong answers.

"The truth lies in hearing everyone’s voice," he says. "For example, some people have pushed the notion that value equates to health outcomes over cost. But that notion misses the patient’s perspective, where convenience and accessibility are a critical part of value as well. There is room for an agreed-upon vision."

If no clear-cut understanding of "value" emerges, Pendleton says it becomes just another buzzword, meaning everything and nothing, in a healthcare sector already rife with meaningless jargon.

"Healthcare has become an industry of propaganda," he says. "We are talking about value, which is a buzzword that’s been used to mean whatever the player wants, whether it's an IT support company, a hospital or a doctor’s office. They will use the definition that best benefits them."

"That’s why we did this survey," he says. "We had a pretty strong sense that there was not universal agreement, and if we didn’t start having some data from the voices of these three different players it is hard to have the conversations that move people toward a commonly accepted definition."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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