What it means

Healthcare organizations must constantly assess when to measure healthcare value — in the short term or the long term. On the far left of this spectrum, organizations focus on acute health needs. Conversely, on the far right, organizations focus on long-term health trajectories. Where organizations fall on this spectrum, in reality, is largely driven by when they measure ROI. Therefore, for an organization to think longer term, they’ll likely need to consider their financial systems, too.

Where is the industry?

Takeaways from our poll of cross-industry healthcare leaders:

1. The industry most frequently measures value at one year, though stakeholders fall across the entire spectrum from zero months to more than 10 years. This one-year timeline aligns with year-end reports and annualized business goals.
2. On average, payers currently think longer term than other stakeholder groups. In fee-for-service models, providers, life science organizations, and purchased and professional services tend to reap financial rewards in the short term upon completion of a service. Health plans, to an extent, see ROI when they can prevent future utilization but are still limited by purchaser and shareholder demands for shorter ROI timelines and frequent member churn.
3. Providers are more likely to think short-term now, but they’re interested in change, with a significant portion of providers wanting to measure value at eight to 10 years. This aspirational change hinges on a corresponding change in payment methodology and business model. Without the financial ability to think longer term, providers (and all other stakeholders) simply won’t be able to expand their range.

A case example^3,4

Humana and Aledade have embarked on a 10-year partnership to provide value-based primary care for Humana’s MA members. Their combined experience and expertise has positioned these organizations to build a partnership focused on a longer time horizon.

Humana boasts over 8 million Medicare members, and they have extensive experience with value-based care (VBC). This is not new for them.

Meanwhile, Aledade equips provider practices to succeed in VBC. They already work with over 1,500 independent practices, and their network is growing. In essence, Aledade creates the providers Humana needs for VBC success.

In partnership, the two organizations have expanded their range — moving from the short-term to a 10-year time horizon. This example demonstrates a key lesson — often, organizations can’t expand their spectrums alone. 

What it means

Healthcare organizations must also assess for whom they measure value — the individual or the population. On the far left of this spectrum, focus remains on the individual person receiving care or services. Moving to the right on this spectrum means thinking about larger populations. How do organizations support population health needs and limit healthcare cost growth? These two ends of the spectrum can be at odds — creating tension.

Responding to an individual patient’s wants may hurt population-level outcomes. Weight-loss medications serve as a pressingly relevant example. If every patient who wanted access to weight-loss drugs received coverage, the collective price would make healthcare costs skyrocket for everyone.

At the same time, healthcare must be individual and personalized. In fact, innovations in care make it increasingly possible to tailor treatment plans to meet the specific needs of each patient, and this personalized care holds the potential to improve health outcomes.

Where is the industry?

Takeaways from our poll of cross-industry healthcare leaders:

1. Provider organizations strongly focus on the patient(s) in front of them. More than any other stakeholder group, providers work with the ultimate end-users of healthcare — patients. Providers receive feedback from individual patients, and most payment models reward physicians at the patient-level. Therefore, it’s unsurprising provider organizations focus on the patients in their immediate view.
2. Health plans take more of a population perspective compared to other stakeholders. Health plans success directly ties to their ability to balance risk across a population. While individual patient outcomes matter, health plan finances incent a larger population perspective.
3. All stakeholders want to grow their ability to impact value at a population level. Overwhelmingly, poll respondents want to measure by everyone they could potentially serve, everyone in their region or state, or everyone in the U.S.

A case example⁵

Denver Health scales care to the population level, by breaking their population down into risk-adjusted subpopulations.

Denver Health’s first subpopulation encompasses the top 0.5% of patients (roughly 200 total) driving the highest cost for the system and requiring the most robust support. For these patients, Denver Health opened the intensive outpatient clinic (IOC) — a brick-and-mortar clinic offering centralized resources.

The second subpopulation includes patients who require highly specialized support outside of traditional primary care such as those living with HIV or high-risk pediatric patients. Denver Health takes specialized approaches to meet the needs of these groups such as using mobile teams for smaller populations (e.g., high-risk pediatrics) or designated clinics for larger populations (such as geriatrics).

Finally, for patients who don’t require the level of intensity or meet eligibility requirements of the IOC, Denver enhanced the primary care teams in traditional clinics.

What it means

Healthcare organizations must decide what they use to measure value. Do they measure outputs like the number of new products or services offered or the volume of patients seen, or do they measure total cost of care and patient quality of life? Once again, neither answer is incorrect, but to support industry-wide healthcare value, organizations must expand their range on this spectrum. Measuring outputs is relatively simple when compared to the more sophisticated infrastructure, strategy, and resources required to measure outcomes — particularly outcomes focused on an individual’s overall well-being.

Where is the industry?

Takeaways from our poll of cross-industry healthcare leaders:

1. Stakeholders currently find themselves spread across this spectrum from outputs to outcomes. However, poll respondents most frequently measure efficacy and quality scores and downstream and total costs.
2. Health plans are more likely to fall on the right side of the spectrum measuring total cost of care and overall health/quality of life than other stakeholder groups. In many ways, this relates to payers’ longer-term and population mindset. Payers are thinking about the general health of a population over time which naturally aligns with outcomes rather than outputs.
3. All four stakeholder strongly desire to measure outcomes with most wanting to measure overall health and quality of life. This shift will require not only a change in measurement and evaluation methods, but financial incentives. 

A case example⁶

Synergie Medication Collective is a medication contracting organization founded in January 2023 by Blue Cross and Blue Shield-affiliated companies. The organization aims to improve access and affordability to medical benefit drugs, such as those injected or infused in a clinical setting. To accomplish these goals, Synergie utilizes a three-pronged approach: risk pooling, member navigation, and outcomes tracking.

• In its risk-pooling approach, Synergie created risk-sharing agreements with drug manufactures to offer gene therapy treatment to some self-insured employers.
• Synergie partners with vendors to direct patients to preferred facilities, ensuring a consistent standard of treatment and outcomes tracking infrastructure.
• Leveraging the outcomes tracking infrastructure at their preferred network of facilities, Synergie can capture more longitudinal data with a goal of creating outcomes-based contracting for more gene therapies.

Measuring long-term outcomes inherently requires the passage of time, however, Synergie’s multi-pronged approach allows them to demonstrate select outcomes in their first year. Synergie’s focus on risk-pooling and member navigation allows them to capture experience outcomes in the short-term. Meanwhile, they continue to gather data on total cost of care and position themselves for outcomes-based contracts.

What it means

Finally, healthcare organizations feel tension in how they deliver value — with proven or experimental strategies. Proven strategies or products offer reliability with demonstrated ROI, easy buy-in, and clear clinical safety. In contrast, experimental strategies spur innovation and can provide first-mover advantage and unique differentiation. By moving first, life science companies can obtain a patent which positions them as a market leader for years to come. If a provider group is the first to work with a vendor, they can help build and pilot a product more directly designed to meet their needs. This spectrum can be incredibly tricky for healthcare organizations to balance. It takes time to establish evidence for proven strategies, and data-driven decision making can translate to great outcomes. Conversely, experiments inherently carry risk. But they can also pay off — giving an organization an upper hand.

Where is the industry?

Takeaways from our poll of cross-industry healthcare leaders:

1. Provider organizations tended to fall farther to the left on other spectrums, but they were step in step with other stakeholders here. They currently find themselves just as experimental as purchased and professional services, payers, and life sciences.
2. Currently, the healthcare industry prefers strategies with more than three years of evidence, and not every stakeholder is interested in change. While payers tend to the fall on the far right of the other spectrums, they are more moderate on this spectrum. They are currently less likely to try brand new ideas than purchased and professional services and life science. In fact, purchased and professional services are the only stakeholder group looking to leave the left side of the spectrum — 10 years of evidence or more — completely. These stakeholders are more likely to be developing new products at a rapid pace.
3. While all stakeholders are generally less interested in moving to the far right on this spectrum, a subset desire to be first movers. Respondents generally want to employ strategies with five years of evidence or fewer. While there will always (and should be) folks at every point of this spectrum, this moderate sweet spot makes sense. Organizations can’t fall behind waiting for 20 years of evidence, but few organizations can always choose experiments laden with risk.

A case example⁷

Sheba Medical Center launched a new experiment to address an existing priority — improving oncology outcomes. Sheba partnered with Caresyntax – a digital surgery startup based in Massachusetts. Caresyntax’s software allows Sheba to collect a swath of data on their own oncological procedures — from audiovisual data to patient physiological signs. The Caresyntax program combines these data with data from Sheba’s EHR records. These data are then synchronized and analyzed by AI to make quality improvement recommendations.

Sheba is focused and addressing a key, existing priority. Experiments require investment, time, and effort; they can become a drain if organizations chase experiments instead of focusing on solutions for top priorities. Organizations must selectively implement experiments — focusing on top priorities and then finding corresponding innovative solutions. When organizations start with an innovative solution instead of starting with their list of priorities, they may inadvertently drift from their most pressing needs.