How value-based healthcare focuses on maximizing patient outcomes and harnessing resources

Our global healthcare crisis is characterized by inequities in access to healthcare, with increasing costs and financial burdens on individuals, households and governments. Sharp surges in government spending underpin the rise in overall healthcare budgets to a new high of around 11% of global GDP and, moreover, health expenditure will outpace GDP growth over the next 15 years. These are worrisome statistics for the sustainability and resilience of our global healthcare systems.

This high-cost burden can, in part, be the consequence of inefficiencies in the healthcare system, such as fragmented and uncoordinated care delivery, poor data governance, workforce shortages and underinvestment in preventive care. The OECD estimates that up to 20% of healthcare spending across its member countries is unnecessary or ineffective. Accordingly, spending more doesn’t always lead to improved patient outcomes. So, addressing these inefficiencies would help reduce costs and make healthcare more equitable and accessible.

If we boil down our healthcare systems as a means to deliver value to our patients and communities, we can visualize an equation.

The widely accepted definition of value in healthcare is the health outcomes that matter to patients relative to the resources or costs required to deliver those outcomes. Value-based healthcare is an approach that aligns industry stakeholders (payers, providers, pharma/MedTech and policymakers) around a shared objective of improving patient health outcomes, providing autonomy and accountability to providers to pursue the best way to deliver healthcare for the money spent.

The transition from volume-based to value-based healthcare will inevitably lead to more healthy societies while optimising resources.

To that end, the World Economic Forum established the Global Coalition for Value in Healthcare to bring awareness to this critical issue and support the acceleration of value-based healthcare in health systems throughout the world.

As a part of ongoing efforts to bring together public-private partners to shed light on this transformation and address challenges and advancements, the Coalition partnered with Health Cluster Portugal for the Meetings with Health Innovation: Advancing High-Value Health Outcomes in Lisbon. The event brought together over 300 leading healthcare professionals, policymakers and experts to discuss the latest developments in value-based healthcare and its implementation.

The resulting dialogue with organizations implementing real-world, value-based healthcare models demonstrated that improved health outcomes done cost-effectively are possible, but many challenges remain.

The success of measuring value depends on the integration of these parameters in daily practice. This brings issues, such as data standardization, interoperability, patient privacy and security and good governance onto the centre stage. One vivid example of success is the Health Outcomes Observatory (H2O), an independent, not-for-profit entity specifically created for data collection, analysis and evidence sharing to inform clinical practice and healthcare decisions, which are specifically designed with a governance model that ensures compliance with national and European demands.

Initially, four observatories – in The Netherlands, Austria, Germany and Spain – covering three diseases: cancer, diabetes and inflammatory bowel disease – gather patient-generated evidence from a range of sources, including electronic health records and disease registries. With H2O’s infrastructure and tools, patients can measure their outcomes in a standardized way, whilst keeping full control of their data. Ultimately, this value-based framework aims to foster innovation in healthcare in Europe and beyond to deliver better outcomes for all.

Care delivery is fragmented across the patient pathway because providers are largely paid for individualized services (volume) that are not usually tied to the outcome (value). This divides accountability. Ideally, multidisciplinary teams of providers can care for their patients individually, yet remain jointly accountable for the outcomes. Healthcare providers may be resistant as this transformation will initially take time and effort to be understood and implemented – as well as drastically reshape the way they are compensated. To overcome these barriers clearly defined outcomes and frameworks to achieve these goals should be put in place for both patients and providers.

Healthcare systems are complex and difficult to navigate . Reforming them can be a daunting task – especially as it can place more stress on resources that may not yield immediate results. Transforming healthcare systems requires significant political will and leadership, as well as a temperament to prioritize long-term goals over short-term political gains. Without significant public pressure for healthcare reform, politicians may not feel the need to prioritize it. Though healthcare is frequently discussed in political conversations, policy leaders rarely provide clear direction on a way forward, especially when enabling a focus on value.

As a start, education and awareness campaigns that focus on successful case examples that support policy reform and demonstrate that value-based transformation is possible.

With these challenges in mind, World Economic Forum’s Global Coalition for Value in Healthcare has built a community of value-based healthcare organizations that serve as proofs-of-concepts on how value-based healthcare can become a reality. We look to our global leaders to take bold action to transform healthcare systems so that they better serve the needs of our communities by addressing healthcare costs and improving healthcare outcomes that matter most to patients.

To learn more about the organizations that are pioneering value-based healthcare and championing value-based healthcare payment models visit the Global Coalition for Value in Healthcare's website.