The Reading Room

Welcome to the Paying for Value Reading Room. So far we have collated the publications and web resources our team has found most helpful in defining our research program. We plan to add more topics as our work progresses. If you have any suggestions or comments we’d love to hear them –

Michael Porter is the most famous name in value-based healthcare with his succinct definition of value as “the patient health outcomes relative to the costs of care” often cited by policy-makers. Of his numerous publications we found What Is Value in Health Care? (NEJM, 2010) to be the most thoughtful and comprehensive. It includes supplementary material on his approach to measuring the “outcomes that matter to patients”.

At the core of Porter’s contention is that value should only be understood from the perspective of the individual patient. In contrast, the Institute for Healthcare Improvement takes a population perspective. Their paper The Triple Aim: Care, Health, And Cost (Health Affairs, 2008) says high value healthcare is not possible unless improvement initiatives pursue three interdependent goals:

  1. Improving the individual experience of care (including quality and satisfaction)
  2. Improving the health of populations
  3. Reducing the per capita costs of care for populations

Muir Gray’s article Value based healthcare (BMJ, 2017) reflects the UK’s universal health system focus on equitably managing scarce resources by increasing the ‘value’ derived from the resources available for a population and reducing unwarranted variation in health outcomes.

The European Commission’s 2019 paper Defining Value in “Value-based Healthcare” has the broadest definition of any we’ve found. It rejects the Porter view of value as individual outcomes per dollar spent and proposes that value-based healthcare to be a comprehensive concept built on four value-pillars:

  1. Appropriate care to achieve patients’ personal goals (personal value)
  2. Achievement of best possible outcomes with available resources (technical value)
  3. Equitable resource distribution across all patient groups (allocative value)
  4. Contribution of healthcare to social participation and connectedness (societal value)

The World Economic Forum’s Laying the Foundation for Health System Transformation (2017) provides a global perspective and very clearly describes, in broad terms, the prerequisites for value-based healthcare.

For an Australian perspective, Kylie Woolcock’s 2019 Deeble Institute paper Value Based Health Care: Setting the scene for Australia does an excellent job of distilling the above material and more for the Australian context.

One of the (many) policy levers that can be used to implement value-based healthcare is payment reform. The goal of value-based payment reform is to alter the method of paying the providers of health care to align their financial incentives with the goals of value-based healthcare.

Several different approaches to payment reform have been suggested, including bundled payments (where a single payment is made for multiple services), and pay-for-performance schemes (where additional payments are made for improving care quality). The OECD’s seminal 2016 report Better ways to pay for health care covers payment reform in detail, and there’s a helpful policy brief.

The Commonwealth Fund’s 2020 report Bundled-payment models around the world  summarises how bundled payments work and what their impact has been. They found that “bundled payments had the potential to reduce medical spending while having a positive impact or no impact on health care”.

Daniel Jacobs and colleagues’  2015 report Bundled care and payment: evidence from early-adopters provides an excellent summary of the implementation issues associated with bundled payments and give a list of twelve key issues for implementation.

Mina Nejeti and colleagues’ systematic literature review The impact of provider payment reforms and associated care delivery models on cost and quality in cancer care  concludes that improvements in resource utilisation and cost control after transition to prospective payment models, but that further research is needed on robust measures of performance and quality to ensure that providers are delivering high-value care, while reducing the cost of care.

Australian Centre for Value-Based Healthcare, established by the Australian Hospital and Healthcare Association has a great repository of resources on a range of value-based healthcare topics, provides training and webinars for practitioners to increase the knowledge and skills needed to transition Australia to a value-based system.

The Oxford Centre for Triple Value Healthcare is a social enterprise based in the UK providing education and consulting services to providers and policy-makers. It has a fantastic glossary of value-based healthcare terms and a series of short podcasts on important healthcare policy texts.

NSW Health’s Value based healthcare pages provide an insight into how a public hospital system in Australia conceptualises value, including some trials in collaborative commissioning with local primary health networks.

Wiser Healthcare is a collaboration between four Australian universities researching low-value care in the form of overdiagnosis and overtreatment, with a particular focus on cancer.

Continuous Improvement in Care – Cancer is a research program based in Western Australia involving universities, health services and consumer groups. The project’s aim is to improve the value of cancer care by measuring outcomes and identifying effective and efficient models of care.