How Should We Define “Value” in Health Care?
In health care we haven’t always focused on improving quality, lowering costs, and offering a better consumer experience. This is finally changing, and I’m optimistic about what this progress means for delivering better value for patients.
Value has become a key topic in health care. That was certainly the case at the annual Forbes Healthcare Summit last week. During a panel discussion, Steve Forbes asked me and three of my health care industry colleagues an interesting question: What the heck does “value” mean? This is the right question and one that requires some thought.
The first thing to address is perspective
Value has to be defined from the perspective of the consumer. We talk a lot in health care about structuring new payment models, adopting technology, making better use of data. In other words, the things that make our business complicated. We have to go beyond this internal focus and put the consumer front and center.
Next, we should consider what makes up value
I believe any discussion of value has to address these four parts:
- Cost: Health care continues to cost considerably more per person in the U.S. than in other countries. Finding a way to bring costs down is our No. 1 job because it is typically our customers #1 concern.
- Quality: Other industries make their products and services better over time, often while lowering costs. Health care needs to do the same.
- Health outcomes: In our fee-for-service world, the focus is on doing procedures and tests. It needs to be on doing whatever is required, and nothing more, to help patients get to the best possible health outcome.
- Customer experience: We know we need to make health care simpler and give consumers the resources they need to make good decisions about their care. At Blue Cross and Blue Shield of North Carolina, we think of it as approaching every customer interaction as though we’re helping a family member.
Finally, we need to think about what’s required to achieve value
Can we get there? Will everyone in health care – doctors, hospitals, insurers, pharmaceutical companies, employers, government – be in agreement on the broad goals? Or will each player define value in their own terms?
On this point, we have a lot of work to do. But I’m confident we in health care will be able to deliver better value for consumers.
When I was at the Centers for Medicare and Medicaid Services (CMS), we dramatically changed the way we paid providers to encourage a focus on quality and outcomes. In five years we went from essentially zero value-based payments to making more than $200 billion in payments through value arrangements focused on quality and total cost of care.
At Blue Cross NC we’ve continued to make progress with our provider partners. Just one example is our partnership with WakeMed Key Community Care, which has resulted in cost savings of almost $20 million while improving the coordination of care for a better patient experience.
Going back to the question at the Forbes summit, my fellow panelists touched on any number of possible definitions of value, from higher quality to better care to greater transparency in what things cost.
All of these are true. The challenge now is to weave these definitions together to transform our health care system so that patients get much better value than they’re getting today. We can do this in health care. And I’m confident that we will.
For Blue Cross NC, our mission is to improve the health of the people and communities in North Carolina and lower costs. We insure the majority of people in North Carolina in the commercial market, and for many of them, we care for them their entire lives. This is an opportunity to think of value over the long term.
We have an opportunity to be a model health care company for the nation and I know that we can achieve this goal. We will focus on delivering value to every customer and treating them like family.