The Argument for Value-Based Care

What is considered good health is largely a matter of perspective. Universal health care is mostly considered the ethical and humane choice across the globe (1). The downsides to "free healthcare" often cited are that populations overuse the healthcare system which drives up the cost of care without necessarily adding value also known as "the moral hazard" (2,3).

The downsides to "free healthcare" often cited are that populations overuse the healthcare system which drives up the cost of care without necessarily adding value also known as "the moral hazard".

This article does not attempt to discuss the ethics of who should pay for healthcare as a matter of principle, but rather attempts to reconcile the tensions imposed by the reality checks governments have to pay when attempting to cover a service that only becomes more expensive over time. In an ideal world, everyone would have access to the healthcare they need and is motivated to take care the best possible care of themselves to minimize poor health as a result of harmful behaviors like smoking and eating processed sugar. In reality, the complex cultural and socioeconomic factors that lead to individual decision making create ethical problems when trying to blame people for their healthcare status or the behaviors contributing to it (4).

Universal Health Coverage

Health care performance indicators in countries that provide universal healthcare coverage are clearly better than those that don't (5). Concerns about the affordability of universal healthcare coverage can quickly be offset by the economic arguments for universal healthcare coverage (6). Affordable and accessible healthcare leads to healthier populations that end up contributing to a more robust economy and actually spend less on healthcare because they are able to access preventative healthcare that reduces their ultimate requirement for hospitalizations and emergency room visits (6,7). The cost of an unhealthy population far outweighs the cost of healthcare, especially when future projections of health status are taken into consideration.

Health care performance indicators in countries that provide universal healthcare coverage are clearly better than those that don't.

Universal healthcare has many challenges. The cost of healthcare delivery increases annually because of ageing populations and because the standard of care itself rises as more evidence is available and more treatments in the market for previously incurable illnesses. When the service provider, the legislator and the auditor of healthcare delivery are the same, a diminished quality of care becomes harder to combat without rigorous systems in place.

Health Care Insurance Regulation

Insurance companies have historically created many systems to hold hospital systems accountable. The rationale is that physicians can be pressured by patients to prescribe unnecessary medications or diagnostic tests and insurance companies function as a barrier that prevents costs that don't contribute to value for a patient's health. One common example is ordering radiographic tests for patients with clinical osteoarthritis without atypical features and not yet ready for surgery. Although ordering x-rays or CT scans of the knee for patients with clinical osteoarthritis who are non-surgical candidates has no added value for the patient, this practice continues to be widespread and is perceived by physicians and patients alike as an important component of care (8).

physicians can be pressured by patients to prescribe unnecessary medications or diagnostic tests and insurance companies function as a barrier that prevents costs that don't contribute to value for a patient's health.

Insurance companies tend to focus on decreasing expensive interventions and hold physicians accountable to justify their choices in the presence of cheaper and equally effective options. This creates an automatic tension with healthcare providers that perceive the need to justify their decision making to "evil insurance companies". In mature healthcare systems where healthcare providers operate at a certain standard and are required to demonstrate a commitment to continuing medical education, these frustrations are largely valid. Healthcare systems where a common culture of care exists, and physicians are in a continuous learning environment have in-built regulatory mechanisms for their standard of care. This applies even more so in teaching settings, which have been shown to provide superior quality of care than their non-academic counterparts (9).

teaching settings, which have been shown to provide superior quality of care than their non-academic counterparts.

Value Based Care

Value-Based-Care is the catchphrase that evolved from precisely such a healthcare system (10). As the only first world country that does not provide universal health care for its residents, the US has sprouted some interesting models when it comes to regulating healthcare delivery. Insurance companies act as the proxy payer mechanism where consumers choose how to invest the money that will later be used to pay for their health care needs. Legislation that aimed to prevent insurance companies from collecting premiums without offering viable healthcare payment plans has failed to protect against phenomenon like the "doughnut hole" where those who pay for insurance premiums might still be required to spend up to $5,000-$10,000 before the insurance policy kicks in sufficiently to protect them from further health-related spending (3).

Value-Based Care became the paradigm that patients, physicians, policy makers and insurance companies agreed on: the goal is to deliver the right care at the right time in the right place with minimum cost and maximum quality. Value-Based Care is how all parties involved in healthcare decision making can evaluate a healthcare system based on common parameters (11).

Value-Based Care became the paradigm that patients, physicians, policy makers and insurance companies agreed on: the goal is to deliver the right care at the right time in the right place with minimum cost and maximum quality.

In less mature healthcare systems where a standard of care is missing, insurance companies can play a crucial role in regulating healthcare delivery. This does not exempt this healthcare system from imposing regulatory mechanisms as it is vital that the alignment towards delivering high quality care while promoting population health remains the mission statement for all involved in healthcare delivery. The capacity to audit the quality of clinical care delivery in addition to insuring sufficient access to care are necessary hallmarks of any healthcare system. Value-Based-Care models can be extremely helpful for a healthcare system to proceed with its own self-assesement and determining where more attention is required.

The capacity to audit the quality of clinical care delivery in addition to insuring sufficient access to care are necessary hallmarks of any healthcare system.

There are many ways that waste occurs in any healthcare system. Unnecessary diagnostic tests, filling prescriptions that aren't used by patients, unnecessary visits to emergency rooms for ailments that could have been addressed in an outpatient clinic are but a few. Attempts to cut down waste threaten to cause delays in patient care. Here again, value-based-care models have come a long way in terms of reconciling the tension between decreasing waste and ensuring a good quality of healthcare delivery.

Attempts to cut down waste threaten to cause delays in patient care.

Conclusion

Universal healthcare is the clearly superior choice for healthcare delivery when it comes to population outcomes and economic measures. Challenges in regulating and ensuring quality of healthcare delivery continue globally. Less mature systems can still benefit from work pioneered in value-based-healthcare models because the tensions between healthcare payment and quality of service desired are clearer and thus easier to learn from. Value-based-care models have succeeded in breaking down traditional silos in healthcare and contributed to better patient experiences and population outcomes compared to traditional healthcare delivery.

References

• World Health Organization; "Universal Health Coverage", June 2023
• Simone Gislandi et al; "The impact of Universal Health Coverage on healthcare consumption and risky behaviors: evidence from Thailand"; Imperial College London Business School, June 2013
• Lirane Enav et al; "Moral Hazard in healthcare insurance, what we know and how we know it"; Journal of European Economic Association; August 2018, 16(4): 957–982.
• Hernandez et al; "Genes, Behavior and the Social Environment: Moving beyond the nature/nurture debate"; Institute of Medicine; Wasington DC; 2006
• Organization for Economic Cooperation and Development; "Universal Health Coverage and Health Outcomes"; Paris, July 2016
• Julio Frenk et al; "Universal Healthcare Coverage: Good Health, good economics"; The Lancet; September 2012; 380(9845): 862-864
• The World Bank: "There is a Strong Economic Case for Universal Health Coverage"; October 2014
• National Institute for Healthcare and Excellence (NICE) Guidelines: "Osteoarthritis Assessment and Management"; 2022
• Alissa Chen et al; "A comparative Analysis of Academic and Non-Academic Hospitals on Outcome Measures and Patient satisfaction"; American Journal of Medicine Quality. 2019 Jul/Aug;34(4):367-375. doi:
• PearlHealth; "The History of Value Based Care"; HealthCare Insights, June 2021
• Teisberg et al; "Defining and Implementing Value-Based-Care: A Strategic Framekwork"; Academic Medicine, 2020; 95(5) 682-685