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How Do We Implement Value-based Healthcare?

Healthcare costs have to be proportional to the derived value. We explore strategies that can shape value-based healthcare around the world.

Doing more with less has never been more critical to the delivery of healthcare than in the shadow of COVID-19. Healthcare costs, which had been spiralling out of control for years, have hit public coffers especially hard. Even the most developed economies are nearing the limit of what they can afford to spend on healthcare, while developing health systems don’t have the necessary resources to manage large patient populations.

Until Professor Michael Porter and Professor Elizabeth Teisberg first proposed the concept of value-based healthcare (VBHC) over a decade ago, the focus had been on the cost of providing treatment.1 But the current health emergency seems to have revived interest among healthcare experts and policymakers.

value based healthcare

Prioritising Value Over Volume

At its core, value-based healthcare aims to address two goals — improving health outcomes and reducing unnecessary costs.

Value for patients, as put forth by Professors Porter and Teisberg, should not be determined by factors such as site of care, medical specialities or even procedures. Rather, patient value is better defined as patient-relevant outcomes, divided by the costs across the cycle of care to achieve these outcomes. In other words, the VBHC model focuses on maximising the value of care for patients at the lowest cost possible. It might not seem revolutionary, but this patient-centric strategy is a noticeable shift from supply-driven approaches where patient volume and profitability take precedence.

However, it’s not always about saving money. Weighing in on this topic is Dr Christina Åkerman, Affiliate Faculty at the Dell Medical School, University of Texas. “If you do not deliver on the outcomes, it doesn’t matter how low the cost is because the value will still be zero. Outcomes that matter most to patients are the true North Star in achieving high-value care.”

Dr Åkerman, a leading expert who has been instrumental in developing a global and common set of measurements for determining the success of care adds emphatically, “We need to ask patients ‘what matters most to you?’.”

value based healthcare

In Asia Pacific, the needle is moving, slowly but surely, from volume-based payment models to value-based ones as healthcare providers and stakeholders begin to recognise the benefits of keeping the population healthy.2 The rise of chronic diseases in the region, exacerbated by an ageing population and the ongoing pandemic, has accelerated the need for a different approach in healthcare.

In Japan, a series of reforms have been introduced by the government, including the introduction of an Integrated Community Care System.3 Combining long-term healthcare, housing and livelihood support services, this unified application ensures Japan’s elderly have access to continuous quality care in their immediate local communities instead of relying on hospitals.

In Singapore, a “3 Beyonds” strategy was introduced by the Ministry of Health to ensure the quality and affordability of its value-based healthcare solutions extends into the future.4 Like Japan, Singapore’s “beyond hospital to community” initiative was designed so patients are able to receive the appropriate care at home or within their communities, and hence, avoid frequent hospital admissions.

Another facet of this strategy is “beyond quality to value”, which aims to increase the quality of care while ensuring value for money. To power this change, Singapore’s Agency for Care Effectiveness (ACE) was set up for this specific purpose.5 For instance, if a new drug costs more but offers better outcomes, ACE will disseminate its findings along with fee recommendations to doctors in both private and public sectors.6 These benchmarks act as countermeasures to help stem escalating healthcare costs.

Banding Together to Fight Cancer

Such efforts are in reaction to the unprecedented convergence of medical knowledge, technology and data science that has the potential to revolutionise patient care.

In February 2021, a public-private partnership between the Singapore Translational Cancer Consortium (STCC), National Cancer Centre Singapore (NCCS), National University Cancer Institute (NCIS) and Roche, was launched which seeks to advance personalised cancer care.

To ensure that screening, enabling medical diagnosis, treatment and even prevention of diseases like cancer can more effectively transform the lives of patients everywhere, the initiative aims to build a clinico-genomic database (CGDB) that combines real-world evidence and clinical insights through data derived from more than 400,000 anonymised patient profiles.

With the establishment of a national precision oncology infrastructure, the hope is that information sharing from comprehensive genomic profiling, to molecular tumour boards and outcomes monitoring will support the application of care that generates improved patient outcomes. “In some cancers, comprehensive molecular profiling may enable the most precise treatment to be tailored based on the genetic profiles of patients’ tumours,” says Dr Iain Tan, Senior Consultant Medical Oncologist, NCCS.

Ultimately, the collaboration endeavours to improve the standards of care. Professor Lim Soon Thye, Co-Executive Director of STCC, Deputy Group Chairman Medical Board at SingHealth and Deputy Medical Director (Clinical) at NCCS believes, “Together, we will work towards shaping clinical guidelines and healthcare policies based on high-quality real-world data that addresses the challenges of growing healthcare demands in Singapore.”

value based healthcare

Focus on Patients, Eliminate Inefficiencies, Enable Medical Diagnosis

For the value-based healthcare concept to flourish, healthcare institutions require unreserved commitment from governments, together with the support of healthcare providers to drive change through system-wide incentives. The end goal should be clear: to humanise the patient experience.

To that end, “make sure that incentives and reimbursement are set up based on the outcomes. This will benefit not only the individual but also the healthcare system,” outlines Dr Åkerman. “We should try to move away from volume to value because when you understand what brings value, then you can scale up that value within the ecosystem and get rid of wasteful spending,” she concludes.

Read more about healthcare’s challenges in the shadow of COVID-19 in our in-depth issue.

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References

1Harvard Business School. Institute for Strategy and Competitiveness. Key Concepts (Value-based Health Care). Retrieved from: https://www.isc.hbs.edu/health-care/value-based-health-care/key-concepts/Pages/default.aspx

2Deloitte. (2019). The future of Life Sciences and Health Care in Asia Pacific – Embrace, Build and Grow. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-future-lshc-asia-pacific.pdf

3Deloitte. (2019). The future of Life Sciences and Health Care in Asia Pacific – Embrace, Build and Grow. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-future-lshc-asia-pacific.pdf

4Deloitte. (2019). The future of Life Sciences and Health Care in Asia Pacific – Embrace, Build and Grow. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-future-lshc-asia-pacific.pdf

5Agency for Care Effectiveness (ACE). Who We Are. Retrieved from: https://www.ace-hta.gov.sg/about-us

6Agency for Care Effectiveness (ACE). (2019, December). Drug Evaluation Methods and Process Guide. Retrieved from: https://www.ace-hta.gov.sg/docs/default-source/process-methods/ace-methods-and-process-guide-for-drug-evaluation-(20-dec-2019).pdf

*The information contained in this article was extracted from Edition 2021, Vol 10.

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