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Health Outcomes-based Incentive Models: Steps to Drive Proactive and Preventative Care

Financial incentives in value-based healthcare (VBHC) models are nothing new. We hear from expert Dr. Christina Åkerman as she explores how to build best practices into these models for better care.

While 2020 will go down in healthcare’s history for the COVID-19 pandemic that raged across the planet and brought diagnostics to the world’s attention, the year 2018 was similarly pivotal, if not as well known. This was when the World Health Organization (WHO) introduced its first-ever Essential Diagnostics List (EDL).1

While this followed the first Essential Medicines List (released in 1977)2 by more than three decades, it was nonetheless seen as a vital step in recognising the value of diagnostics. As the WHO stated the EDL enable health providers to provide patients with appropriate treatments more promptly, and “will also contribute towards health systems strengthening and realising universal health coverage”.3

However, as findings from the latest Lancet Commission on Diagnostics suggest, important elements of diagnostics access are not explicitly mentioned in proposals for universal health coverage and are largely missing from national strategic plans for health.4 The commission recommends that countries develop a national diagnostics strategy supplemented with a national Essential Diagnostics List (EDL) to integrate the delivery of timely accurate diagnosis and proactive care during infectious disease outbreaks. Beyond that, such measures will also help in the management of chronic diseases.

At a time when the commission’s data shows that the proportion of the population with a health condition who remain undiagnosed is at 35–62 percent,5 how can incentive models be designed to ensure timely interventions and improve health outcomes?


Four Questions for Dr Christina Åkerman, Affiliate Faculty at Dell Medical School, University of Texas at Austin, USA

1. How should rewards systems and outcome-based incentive models be designed?

There is no single model optimal for all medical conditions or patient segments. The challenge is to choose the relevant model for each and link different models together into a comprehensive system rewarding health outcomes.

Defining the health outcomes that matter most to the patients you intend to serve is the starting point. With these health outcomes as the common goal for all involved, the next step will be to define a budget that spans across the full cycle of care. This is true not only for private players but for public institutions as well.

What’s most important about designing financial rewards systems for the long term is to base them on measuring and reporting health outcomes.

The first step is to move towards bundled payments as it is essential to integrate budgets across the entire care pathway. This way, profits aren’t dependent on a certain number of procedures or specialties.

There is so much still to discover about this field and about how we establish structures once we focus on outcomes that matter most to individuals, and create reward systems that support this.


2. Since no health system or provider has figured the ‘perfect solution’, how can they learn from each other, to better measure and improve health outcomes?

Once you have health outcomes you understand and trust, then you can start benchmarking externally to share what you do well, your own best practices, and also learn from others. This can be a very powerful way of working. It is about improving and then defining the best practices to establish care processes that can elevate the standard of care.

You can then use this data to move towards shared decision-making with patients, where together you discuss the optimal treatment pathway for each individual based on the health outcomes that matter most to them.

This empowers patients as it enables them to make informed decisions where the healthcare provider can say, “This is the treatment and where you could go to have that treatment with the highest probability to reach the outcomes that matter most to you.” 

Trust and transparency established with patients in shared-decision making and between provider and payer in paying for health outcomes will take time to establish.

3. When it comes to measuring health outcomes, they ultimately vary depending on the individual patient. How can patients determine what they want?

That’s a very valid question and stresses the importance of defining the unmet needs and the gaps for the patient you intend to serve.

The work we did at the International Consortium for Health Outcomes Measurement (ICHOM) showed that it is possible, across 44 different countries, to actually find a minimal number of health outcomes that matter most to individuals on a general level such as survival, low complication rates, and high quality of life.

These are categories of health outcomes that are important to all of us, one way or another. It doesn’t matter that much where you are in the world but what you hope to achieve along the care pathway.


4. How then can payers and providers determine if a proposed value-based incentive model is working?

When there is a shared goal and responsibility, you see a shift in the way the industry players and providers collaborate.

There is much more intense and value-driven dialogue with the life science industry; not only working in their setting of collaboration over the full cycle of care, but also engaging with the innovators. Such a dialogue is important because what we use in healthcare is to a large degree, innovations from the life science industry. 

That’s why defining and measuring health outcomes together with payment/reward systems based on the outcomes achieved, actually puts all stakeholders on an equal footing, all contributing to better patient outcomes.

And for value-based healthcare systems it means saving resources because they actively have the health outcomes that matter most to patients as the common goal. Wasteful spending or the inefficient use of resources within healthcare happens when we don’t focus on outcomes. This doesn’t necessarily mean that a patient is harmed at the point of care, but that the care provided is not making any difference to patient outcomes.

This is why it is so important to start measuring health outcomes, and start rewarding the end results.

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1World Health Organization (2021). WHO publishes new Essential Diagnostics List and urges countries to prioritize investments in testing. Retrieved from

2World Health Organization. WHO Model Lists of Essential Medicines. Retrieved from

3World Health Organization. Health product and policy standards | Selection, access and use of in vitro diagnostics. Retrieved from

4The Lancet (2021). The Lancet Commission on diagnostics: transforming access to diagnostics. Retrieved from


*The information contained in this article was extracted from Edition 2022, Vol 11.

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