Value-based healthcare: What is it and how best to implement it?

Stefan Larsson, MD, PhD

Board Member and Founder of ICHOM

Andreas Schneider

Senior Vice President / Global Head of Franchise Marketing Roche Diagnostics

Value-based healthcare: What is it and how best to implement it?

31 May 2021 | 5min

The need for a common goal

Modern healthcare is at a crossroads: costs are rising at an alarming rate, yet they are not necessarily leading to a higher quality of healthcare. The enormous investments being made are not translating into fundamental improvements in health, and we seem to be at a point of diminishing returns.

One solution that has been a hot topic in healthcare circles in recent years is the concept of value-based healthcare, or VBHC. Value-based healthcare aims to improve health and the delivery of healthcare by focusing on outcomes and value for patients. The goal would therefore become broader and shift from only treating a condition, to solving a patient’s health needs.

While the concept is not new, exactly what VBHC is – and what it is not – is still not uniformly understood. Roche Healthcare Transformers hosted an online seminar on VBHC to help dispel misconceptions, and better inform healthcare leaders as they prepare to join the VBHC discussion.

Learning from an expert in VBHC

Keynote speaker Stefan Larsson, MD, PhD and cofounder of the International Consortium for Health Outcomes Measurement (ICHOM), set the stage by highlighting the unprecedented progress that humanity has made in improving human health over the past centuries – and how this progress seems to be stalling, despite the immense resources devoted to healthcare worldwide. After an initial surge, what is spent in healthcare doesn’t translate into an increasing number of healthy life years. And that spending is unsustainable, growing at almost twice GDP.

Dr. Larsson argues that, given this, we need to step back and ask a fundamental question: what is the purpose of our national healthcare systems? Ultimately, the answer is, or should be, to have healthier citizens. If that is the case we need to measure this – are patients getting better or not? Only when we measure that are we able to know what the system is delivering. We also need to determine the resources used to achieve these outcomes. The comparison of outcomes achieved versus resources used – is the fundamental principle of VBHC. It allows us to assess improvement over time and to compare clinical centers across the world – to learn from the best and improve.

There are several examples of healthcare organizations that have applied the VBHC logic to improve what they do. Dr. Larsson highlighted the efforts of the Martini Klinik in Hamburg, the world’s largest prostate cancer clinic, and the cardiac surgery unit at the Karolinska University Hospital in Stockholm, as examples of where the relentless focus on measuring outcomes, and then using these measurements in a continuous loop to further improvement, has helped to significantly elevate the ability to deliver quantitatively better outcomes that matter to patients.

how to implement value based healthcare

COVID-19 and the drive toward VBHC

The momentum around VBHC has strengthened as a result of COVID-19. The ongoing pandemic has forced everyone to take a deep look at how critical our healthcare systems are in order to have a normal life and a properly functioning society. The key learnings from the COVID-19 pandemic are all aligned with the framework increasingly used to describe Value-based Health systems:

  • transparent measurement of key outcomes – eg. the weekly reports of mortality across the globe
  • the creation of population segments matched to appropriate interventions – for instance the differences in risk and treatment for our oldest citizens and school children
  • the need for more robust IT systems, benchmarking and research tools – standards that would have helped share learnings faster during the pandemic
  • the delivery of digital healthcare; and policy models that allow this all to take place and function smoothly
  • Increasing use of digital tools were seen across the globe, but the major differences in pandemic seen between nations was largely a matter of the role and choices by the country’s policy-makers

By learning from the pandemic and transforming HC systems to be better prepared for the next pandemic as well as managing all other major diseases more holistically – VBHC systems would be a necessary development.

While COVID-19 has put the spotlight on the critical areas of change needed, the momentum behind VBHC models has been steadily increasing worldwide. Major organizations such as the Organization for Economic Co-operation and Development (OECD), the World Bank, World Economic Forum, European Commission and the G20 all agree that the current system is unsustainable, and that healthcare needs become more patient-centric and outcomes focused in order to pave the way toward a more sustainable and healthier future.

Diving deep into VBHC with industry leaders and pioneers

VBHC is not exactly a new concept; there are many examples of successful applications, so Healthcare Transformers invited along five guest speakers to come and give valuable insights into their experiences with VBHC. They shared their experiences on implementation, adoption and utilization of these strategies, giving the audience real life examples on how VBHC can really make an impact on healthcare systems across the globe.

Prof. dr. Fred van Eenennaam, Chairman VBHC Europe & Founder The Decision Group – “I’m inspired and learn from VBHC implementations daily. They show us that it’s possible to successfully implement VBHC for patients and teams.”

Harold D. Miller, President and CEO Center for Healthcare Quality and Payment Reform – “Traditional healthcare payment systems create major barriers for providers who want to deliver value-based care. Value-based payments are needed that remove those barriers and provide the resources and flexibility needed to deliver care in better ways.”

Dr. Aernout Somsen, Cardiologist and Cofounder Cardiology Centre the Netherlands & Hartwacht –  “To keep things as they are, we have to change everything.”

Girisha Fernando, Cofounder & CEO of Lyfegen – “Purely measuring outcomes doesn’t make the change! Healthcare ecosystems need to change to enable value-based healthcare and improve patient outcomes.”

Alessandro Monterosso, Cofounder & CEO of PatchAi with Fabrizio Bellina, Marketing and Customer Innovation Manager, Roche – “One of the most important aspects for a digital health project to be successful is to go beyond implementation by involving the stakeholders to redesign the workflow behind the entire care pathway”

What questions are top of mind for healthcare leaders when listening to VBHC experts like Dr. Larsson?

Andreas Schneider from Roche got the chance to ask Dr. Larsson the questions that were at the top of your minds. Just like with our last event, we would like to follow up on those very interesting, sometimes complex and even critical questions, such as:

  • What about the patient’s quality of life instead of the life expectancy?
  • What are the main barriers for institutions to adopt VBHC and how to overcome them?
  • Are there arguments against the use of VBHC? potentially in terms of returns on R&D investments.
  • Who do you identify as the most critical player to achieve a successful VBHC system?
  • Is VBHC more difficult to achieve or organise in cancer care than in other areas?
  • How do they deal with the balance between personalized treatments in high incidence/prevalence diseases such as diabetes?

We received so many interesting questions from the audience – too many in fact to address all of them during the live Q&A period. We will be going back to Dr. Larsson in a special follow-up article to get his expert answers to all of these inspirational questions soon.

To learn more about VBHC, and to get a better idea of what a leading authority on the subject believes it may mean for the future of healthcare, we encourage you to take some time and watch the full recording of the live “Transformation through value-based healthcare models” keynote session.

Stefan Larsson, MD, PhD is an independent advisor and investor. During his 24 years with The Boston Consulting Group (BCG) Stefan led (2011-2017) the firm's global health provider and payer sector and (2017-2020) its healthcare systems sector. In addition, Stefan is a senior advisor to BCG and a fellow with BCG’s Bruce Henderson Institute where he lead the firm’s research on value-based health care.

Andreas Schneider has over 15 years of experience in various leadership roles within the Healthcare Industry after co-founding, managing and selling his own IT consultancy company.