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Value-Based Health Care - What Do We Mean by Value?

There is broad consensus that the predominant system for payment of health care services, the fee-for-service model, is not an effective mechanism for controlling costs and improving outcomes.  It is a system that rewards volume over value, and as such, there is a strong movement towards more value-based payment models. Accountable Care Organizations, episodes of care/bundled payments (e.g. hip or knee replacements) and value-based insurance design (V-BID) are all examples of initiatives that emphasize delivering “value” to the various stakeholder groups within the larger healthcare system.

But what do we mean by value? Certainly, factors such as quality, cost, outcomes, and service would go into the mix, but which factors are the most important? What is the right balance? Not surprisingly, it depends on who you ask. The University of Utah Health posed just these questions in a broad-ranging survey of patients, physicians and employers and found fundamental differences amongst these groups in how they define value in health care. What are the key characteristics of high-value care for patients? Affordable out-of-pocket costs and friendly and helpful staff ranked as more important than health improvement. For physicians? Clinical outcomes were paramount. And what about plan design? Only 4% of patients and physicians recognized that an employer’s choice of health plan affected out-of-pocket costs.

As an employer, defining what value means within your organization is critical to delivering health care benefits that meet the needs of employees and serve as a positive driver of engagement. A Harris Poll found that over 75% of adults say that health care benefits would strongly factor into their decision on where to work, and yet employee engagement with the preventive and health management service offerings of their employer hovers around 30%. In short, employees aren’t accessing what their employers have to offer. Accordingly, when defining value, it is important to keep the following in mind:

  1. Articulate your organization’s vision and purpose and think alignment - what elements of your current health care benefits integrate with and serve that vision? Which do not?
  2. Understand the larger cultural context of your organization.  What are the historical expectations of your workforce? Are they happy and comfortable with the current plan offerings? To what degree are employees adept healthcare consumers? What is their ability to absorb change?
  3. Survey your workforce on what is important to them. The key is to motivate your employees to engage, and that will only happen if you meet them where they are.

The employee experience when engaging in their healthcare, both positive and negative, will impact their engagement overall. Your healthcare strategy and workforce strategy are inextricably intertwined, and development of a shared vision of health care value is a critical element of your overall strategy.