Everyone in the world is talking about “value-driven health care.” Or so it might seem if you pick up a medical journal or attend a lecture about health care here in Boston. “Maximizing value for patients” is on the tip of every administrator’s tongue and an interest in cost containment is de rigueur for young physicians who aspire to leadership positions in medicine. For those of us who are intimate with the deep dysfunction of our health care system, improving the quality of care is an imperative. And the realization that health care spending robs from public education and burdens American business makes reducing the cost of health care a top priority across the political spectrum. An approach that allows the pursuit of both of these goals—quality improvement and cost containment—seems ideal and, not surprisingly, has gained broad appeal. So why be concerned about value-driven health care? Let’s start with a little background.
The principle proponent of value-driven health care has been Michael Porter at Harvard Business School. In a number of articles and his 2006 book, Redefining Health Care: Creating Value-Based Competition on Results, Porter lays out the foundational arguments for value-driven care. Neither increasing quality nor controlling costs, he argues, are satisfactory aims for health care organizations. Instead he argues for competition based on value, which he defines as “the health outcome per dollar of cost expended.” Drawing extensively on principles of Lean production, Porter says that value must be measured in terms of the patient’s medical needs over the “entire spectrum of care.” Expenditures that do not contribute to creating value for the patient should be eliminated and efficiency in delivering high quality care should be prized. It has proven to be a persuasive argument. In fact, these principles are underpinning huge changes in the health care system, with tenets of value-driven care having been incorporated into the Affordable Care Act. Accountable Care Organizations are an outgrowth of Porter’s philosophy—their goal will be to provide value for patients over long periods of time in all of the settings where care happens.
Despite all of the excitement about value-driven care, there is a remarkable lack of clarity about what “value” means in this context. Moreover, though providing better outcomes at lower costs may be a noble goal for a health care organization, a system organized around competition to achieve this objective is not functional in a market-based health care economy.
First to the question of defining “value,” a topic that has long been the subject of anthropological thought. David Graeber, in his book, Toward an Anthropological Theory of Value, highlights three way that value has traditionally been discussed in social theory:
1. “values” in the sociological sense: conceptions of what is ultimately good, proper and desirable in human life
2. “value” in the economic sense: the degree to which objects are desired, particularly, as measured by how much others are willing to give up to get them
3. “value” in the linguistic sense, which…might be most simply glossed as “meaningful difference”
Porter’s conception of value in health care is probably most consistent with the first definition. He is arguing that quality, efficiency and low cost are “good, proper and desirable” aspects of a health care system. If Porter’s argument is an attempt to define the values that should be at the core of our healthcare system, it is fair to take a closer look at what he thinks those values should be. He sets them out in a 2010 New England Journal of Medicine piece entitle, “What is Value in Health Care?” The answer is encapsulated in a three-tiered hierarchy,
in which the top tier is generally the most important and lower-tier outcomes involve a progression of results contingent on success at the higher tiers. Each tier of the framework contains two levels, each involving one or more distinct outcome dimensions. For each dimension, success is measured with the use of one or more specific metrics.
It’s a bit esoteric. In short, Tier 1 represents health status gained or retained as a result of medical care. Tier 2 outcomes relate to the recovery process. Tier 3 outcomes represent the sustainability of health. Examples of how this applies to specific disease conditions can be seen in the figure below. For breast cancer, outcome measures include survival rate, breast preservation, functional status, time to remission and incidence of brachial plexopathy. One can imagine that for diabetes, outcome measures might include mortality, hemoglobin A1c levels, incidence of blindness, amputation rates and so on. This radical reorientation of care toward patient outcomes is refreshing in health care, where factors like physician workflow and the financial interests of provider and payor organizations have more typically been the organizing principles. But how will we decide what is valuable for the patient? Choosing what weight to assign to the numerous indicators that Porter mentions alone would be daunting. What of those that he hasn’t even thought about?
Porter’s conception of value is decidedly focused on the intensive management of illness. Measures of a patient’s emotional well-being, for example, are absent from his framework. So are thousands of other factors that might contribute to a patient’s sense that her medical care has been “good, proper and desirable.” Personally, I value receiving medical care close to my home and from a person I know and trust. Features as diverse as the availability of interpreters, the delivery of culturally responsive care, a family tradition of seeking care at a particular hospital, the appearance of the physical plant, the amount of a patient’s copay or a hospital affiliation with a medical school can all contribute to a patient’s sense of value in their health care. It’s probably obvious that there is no metric for kindness in Porter’s scheme. One can’t help but wonder, will the pursuit of “value” make us proficient at delivering a certain set of outcomes but leave us blind to the more human needs of our patients?
We should also be aware that Porter’s framework alters the tenor of the relationship between health care providers and their patients. As health delivery organizations are rewarded financially for meeting outcome markers, pressure will grow to reach further into patients’ lives. For many patients this will be helpful. But for those who place high value on activities that are in conflict with the goals of the health care system, their autonomy may be at risk. Imagine the patient who wants to eat unhealthy foods, for reasons of pleasure or culture, despite having diabetes, or the patient who refuses surgery for breast cancer or rehabilitation after surgery. This will have an impact on hospital quality measures. Not all health organizations will pressure or abandon these patients, but some will in order to improve their numbers. Some will avoid caring for poorer, marginalized patients if existing health status and patient background are not used to adjust outcome statistics. There will, in a number of scenarios, be distinct conflicts between taking good care of individuals, managing public health and keeping outcome numbers high. Whether we want our health delivery organizations in this position is something that deserves more attention.
It is also completely unclear how competition based on value, defined as the “health outcome per dollar expended,” will succeed in lowering costs. Organizations can certainly succeed in lowering costs internally using Lean production methods, but in the marketplace, health organizations compete on their ability to make money. Making less money is generally a bad competitive strategy. Here’s what I envision happening: An organization that follows Porter’s guide can become more efficient and improve its outcomes, increasing its margins and creating a more “valuable” experience for patients. This will tend to increase its market share and reputation, which the organization will use to negotiate higher, not lower, prices from insurers. Consider the example of Partners HealthCare in Massachusetts, which receives higher rates than any other provider in the state. As our NPR affiliate has reported, Parters
invest[s] in facilities and staff in ways its competitors can’t. That lets it build its brand and market share, which gives it leverage with insurance companies, which lets it charge them higher prices, which they pass on to consumers — and on and on.
Partners controls two large, Harvard-affiliated academic medical centers, numerous community hospitals and thousands of primary care providers. If any organization can provide value across the “entire cycle of care,” it is Partners. But acting in a rational, self-interested way, Partners has driven the cost of health care up. To expect an organization that functions like a business to compete on their ability to drive costs down just doesn’t make sense. Health care providers operate in the realm of economic value, “as measured by how much others are willing to give up to get” their services.
In the end, the greatest shortcoming of the “value-driven” philosophy is not that it is bad strategy for a delivery organization (it isn’t) or that it will be bad for the patient-provider relationship (it needn’t be, if kept in perspective), but the idea that “the biggest problem with health care isn’t… politics.” This is harmful. Determining the basic values that should animate our health care system is a fundamentally political problem. Porter speaks at the level of the business practitioner, but the allocation of resources in health care requires answers to questions about what we value as a society and how we chose to organize ourselves. The notion that these decisions can be made behind closed doors by technocratic experts is hypocritical if the goal is to create value in the broadest sense. To do this, we must put aside the wishes of health industry executives and ask what “community-driven health care” would look like. It’s possible that our patients will value much of what Porter argues for, but we’ll never know if we don’t ask them.
Nathan Favini is a medical student who blogs at A Stranger in this World, and can be reached on Twitter @natefavini.
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