What is "value" in health care? It's a term that gets bandied around a lot, but sit down to define it, and you'll likely find yourself struggling to combine terms like "cost," "quality," "satisfaction," "safety," and "outcomes," into a cogent sentence (with varying degrees of success). Compare that definition against that of others in the industry, and you'll likely find that landing on a consensus is remarkably challenging.
What is 'value,' anyway? Help us find out.
At last week’s Cross-Industry Value Summit, Advisory Board asked 40 leaders from across health care —including payers, providers, life sciences manufacturers, health technology assessment (HTA) organizations and industry experts—to do just that. Researchers took attendees through series of activities aimed at defining value, exploring their preconceptions about value, and understanding how their place in the industry shapes their perspectives. Their diverse backgrounds and leadership roles in medical, pharmacy, transformation, analytics, and population health surfaced key similarities, and striking differences, in value definitions.
One theme that quickly emerged was that, while "value" is easy enough to talk about in theory, it becomes more difficult to define in practice. This is partially because theoretical conversations often overlook the messy and mundane attributes of the industry—and shy away from the "elephants in the room" that limit our ability to really understand each other and find common ground.
Therefore, organizers last week made a point of asking attendees to think about and fully articulate these "elephants" by writing their frustrations, concerns, and assumptions down on paper; the hope was that this would transition the group beyond finger-pointing or transactional “win/lose” mindsets. Participants had plenty to say. As pictured, they outlined dozens of obstacles to value which are often talked around or swept under the rug—and posted their thoughts for their peers to see.
4 'elephants' in the room when discussing value
Here are some of the most interesting elephants they raised:
1. We often assume that we know what patients value, without ever asking them directly.
Imagine you're asked to say if a given treatment is "valuable." You'd likely want to know whether it is effective at meeting a number of desired outcomes. For instance, does it extend someone's life, reduce a symptom, or normalize a vital sign? Then you'd likely say it provides value. And participants mostly agreed—they emphasized that judgements of value must center around efficacy at meeting the medical needs of the patient.
However, several participants noted that value judgements centered on patients' clinical needs often overlook what patients want, or how they perceive tradeoffs when thinking about treatment decisions and outcomes. One participant noted “we assume we know what patients value, but in reality every patient is different.” Participants recognized that our society has very few systems in place to quantify these wants, to reward organizations that uncover these wants, or to challenge preconceived notions about what patients value. "We do a poor job of really 'listening' to what the patient wants because as a health care society, we are too busy selling procedures, surgeries, and products that will probably improve a patient's health status," one participant said, questioning, "Is that what the patient wants?" Another added, "Patient perspective is still perceived as 'nice to have' and a soft target."
Others suggested that our assumptions about patients' needs often derive from the belief that everyone would make the same choices we'd make in a given situation. "We tend to think that most people are similar to us (in terms of values, beliefs, resources, etc…)," one participant noted, "This is what drives disparities." Another added, "The paternalistic aspect of medicine, or the concept that we know best for the patient, does not allow for a patient-centered definition of value." All told, many participants raised the concern that any rigid value frameworks weighted heavily on patients’ clinical needs will ultimately fail to account for, and satisfy, many patients' actual wants.
2. Solutions that benefit society may not always benefit the individual.
Others pushed back against the notion that we can center conversations about value on the desires of the individual. "It's too time-consuming to understand the patient needs at the individual level, so we make population-wide assumptions," one participant explained. Think back to our hypothetical treatment, and you can only imagine the logistical hassle of ascertaining value if you had to understand its value proposition for every person individually.
This surfaced the very tricky tension about the “scope” of any value assessment—should our vantage point be the individual or a defined population? When asked to identify her elephant, one participant simply posed the question "is the priority the individual or the society?" Without answering this question, it can be hard to arrive on a single determination. Others noted that if we think about value at a population-level, we must be prepared for tradeoffs at the individual level. As one participant wrote for his elephant, "a truly 'value-based' health care system would limit our access to care and provide poorer patient outcomes in certain scenarios."
But one participant also noted that we may not yet be ready as a society to pursue value through a systemic lens. "The U.S. is not ready to talk about value," one participant argued, "It requires a societal view."
3. Patients may not have the information and resources they need to make judgements about value themselves.
If we do want to incorporate patients’ wants in a broader definition of value, some participants noted that we have to accept health care consumers as not perfectly rational, informed decision makers. "Patients cannot define value by themselves," one participant wrote, "They trust the doctor to make the decisions."
This can lead to difficulties, others added, since many doctors lack the tools to engage with patients in productive conversations about tradeoffs and priorities. "Education regarding care decisions needs to include specifics and tradeoffs," a participant wrote. "For example, a patient deciding on a Do Not Resuscitate (DNR) order should know that they will be intubated and put on IVs for two days before they are checked for improvement."
Treatment decisions accounting for patient value must also account for the fact that many patients will not do the things they need to do to improve their health or optimize the impact of a treatment. When asked to name an elephant, one participant emphasized the "lack of patient engagement and motivation in lifestyle changes," which can ultimately limit the value of even the most evidence-supported treatments.
4. Value may not be a win-win after all.
It's easy to be Pollyannaish when striving for value, but participants noted that it was naïve to think the quest for a common understanding of value would benefit everyone. "By prioritizing value," one summed up, "one stakeholder inherently will have to lose profit. As much as we want it to be, it's not a win-win."
The problem, participants explained, is that all stakeholders in the industry are running after different parts of the value equation. "We all think we agree on the general value equation, but we don't actually have alignment," one added. This participant continued, "If I'm a health plan, cost may matter most; if I'm a health system, revenue may matter most."
Others called out the perverse and sometimes conflicting incentives that propel some organizations to define value in ways that perpetuate legacy business models. "Hospitals should be the champions of value-based care—but also aim to keep their beds occupied to drive revenue," one noted, emphasizing the paradox. Another added: "Insurers can’t effectively transition to a value-based model—without addressing their average customer coverage term of two years."
Another emphasized the difficulty of championing value in a publically traded company. "We're not thinking about the desire to satisfy shareholders [when we think about value]," she wrote. "It is the difference between ROI and maximizing ROI."
Why acknowledging these 'elephants' is key to progress
As these collective elephants reveal, trying to make value-based medical decisions can be hard in the real world, when one has to face divergent patient desires, the tradeoffs of individual vs. societal benefit, the irrationality of human behavior, and the oft-misaligned incentives of the U.S. health care industry.
Yet, no conversation about value can progress without acknowledging these 'elephants,' says Advisory Board's Madhavi Kasinadhuni. "The reason we asked participants to surface these elephants is because we must get them out into the open if we ever expect to have an honest, industry-wise conversation about value," she said. And, as she added, "Every definition of value and program seeking it will necessarily have tradeoffs, so we must be upfront about what these tradeoffs and assumptions will be."
Stay tuned for more coverage from the cross-industry value summit, including our key takeaways from the day and our lessons learned about striving for value.