Value-based health care: Why patient outcomes are the true north to achieve high-value care

Christina Åkerman, MD, PhD, EMBA

Affiliate Faculty at Dell Medical School, University of Texas at Austin

Value-based health care: Why patient outcomes are the true north to achieve high-value care

6 August 2020 | 15min

Quick Takes

  • Health care systems worldwide are faced with increasing pressure to deliver better quality care, yet costs are unsustainably rising

  • The value-based health care movement seeks to address this issue by redefining how health care systems measure success according to the outcomes that matter most to the patient

  • Focusing of patient outcomes has the potential to lessen or prevent the health risk for certain conditions in a population

Global health care* faces a glaring contradiction: rising costs that do not consistently equate to better quality care. The value-based health care movement seeks to address this issue by redefining how health care systems measure success according to the outcomes that matter most to the patient.

Christina Åkerman, physician and expert on value-based health care, is the world’s leading expert on developing a common global set of measurements for determining the success of care. In this educational and insightful interview, we discuss the history and principles of this movement and how it serves as a guiding foundation to achieve high-value care.  

HT: What are the origins of value-based health care and what challenges does it aim to solve? 

Christina Åkerman: This is a long story with a long history. I would like to start with:

  • The wasteful ways we spend on health
  • The unmet needs
  • How outcomes can support reaching high-value care and all the way to health

So let’s start with what we label as wasteful spending on health. The Organization for Economic Cooperation and Development (OECD) published a report in 2017 on wasteful spending in health care. The report said that at least one-fifth of health care spending could be channeled towards better use. The numbers show that many patients are unnecessarily harmed at the point of care, many patients receive unnecessary care that makes no difference to their health outcomes, or that the same benefits could be provided by using fewer resources.

In order to improve we need to put the focus on the patient. We need to seek solutions that improve their health outcomes. We need to understand their unmet needs in each medical condition. 

We need to ask patients “what matters to you?

We need to ask the patients “what matters to you?”. This is central in determining value because outcomes are the real world results that matter the most to patients. Outcomes are not structural metrics or ticking a box or ensuring that protocols and guidelines are followed.

Outcomes are the actual results of care, which does include clinical measures such as survival rates and the complications during treatments. But, outcomes that matter most to patients are how care affects their quality of life. 

Today we are not focusing very much on these types of outcomes. We are more focused on the process measures and the structure metrics. Going back to the OECD report on waste, we have to acknowledge this and notice that despite collecting vast amounts of data we, to a large extent, lack this type of patient-centered metrics.

Delivering outcomes that matter most to patients is where the value in health care lies  

To ask patients what matters to you is important. For example, the Martini-Klinik in Hamburg in Germany, asked their patients with localized prostate cancer, “what is important to you in terms of quality of life?”. They said that it’s important to stay continent and it’s important to maintain sexual function. With these two outcomes in focus, the Martini-Klinik have focused their care to lower the risks of patients becoming incontinent or having erectile dysfunction. When we then compare the results from the Martini-Klinik with the German average, we see that they have tremendously lowered the risks of these negative outcomes for  patients. 

Measuring meaningful outcomes matter: Comparing outcomes of prostate cancer care

Measuring meaningful outcomes matter - Comparing outcomes of prostate cancer care

Source: Adapted from Martini Klinik, BARMER, GEK: Report Krankenhaus 2012, Patient-reported outcomes (EORTC=PSM), 1 year after treatment, 2010

This is why focusing on what truly matters to patients can really increase value in health care and transform health care to high-value care, which will help reduce waste in health systems.

… if you do not deliver on the outcomes, it doesn’t matter how low the cost is because the value will still be zero.

When I said this is a long story with a long history, I meant that this is nothing new. In 1914 Ernest Codman from Massachusetts General Hospital in Boston, a surgeon there, talked about this as something very central. He said that every hospital should follow the patients they treat long enough to determine whether or not the treatment has been successful, and then to inquire, if not, why not? 

At the time of 1914, he wasn’t very well received and he even had to leave his position. Then he founded his own hospital, which he named “The End Result Hospital”. So this is something that has been considered for more than 100 years now. 

In 2006, Professor Michael Porter and Professor Elizabeth Teisberg, published a book “Redefining Health Care”, where they argue that the most important step to ensure value in health care is to start measuring these types of outcomes. Their value equation is about the patient’s health outcomes achieved over the cost of delivering those outcomes. That’s how they define value. And if you do not deliver on the outcomes, it doesn’t matter how low the cost is because the value will still be zero. 

Outcomes that matter most to patients are the true north in achieving high-value care.

HT: Is creating value in health care really as simple as just asking patients what matters most to them?  

Christina Åkerman: Yes. I can give you one example of what I have worked on, and it is based on the  work from Professor Michael Porter and Professor Elizabeth Teisberg. In 2012, a nonprofit organization, the International Consortium for Health Outcomes Measurement (ICHOM), was co-founded by Professor Porter’s Institute of Strategy and Competitiveness at Harvard Business School. 

In 2014, I moved to Boston to lead this organization and our focus was to define the outcomes that matter most to patients by medical condition. We brought together health care professionals, patients and carers around a certain medical condition to really understand what matters most to the individual.

There is a hierarchy of outcomes that you can use, which was published in 2010 in the New England Journal of Medicine by Professor Porter called “The Outcomes Measures Hierarchy”.1 There are different tiers of outcomes – survival is central, but also the journey to survival: How does your journey to survival look like with the care-related discomfort, pain, complications, reinterventions, readmission, that you pass through? And what type of life do you survive? This is where what matters most to patients is central and important to understand. And then you need to ask the patient “what matters most to you?”. It’s extremely important to involve patients, families and carers to understand this properly. 

It’s not only important to involve patients in the definition but also in reporting the outcomes. Outcomes should always be a combination of clinical outcomes and patient-reported outcomes. When ICHOM met with the stakeholders to define a standard set of outcomes, the health care professionals were often surprised to hear what truly mattered to patients. When defining and measuring outcomes it’s important to:

  • Combine a group of health care professionals and patients to define the outcomes 
  • Have the patient report on the outcomes along with the health care professionals

A very clear example is from the Swedish Cataract Registry, which captured outcomes for cataract treatment. They could see in the registry that the visual acuity of the majority of the patients in the registry improved. However, when you asked the patients how well they could live their life post surgery, a proportion of patients actually reported that they could do less than before and that they were worse off after treatment than before, despite having clinical improvement. 

Looking deeper they found that this was coming from a group of older patients who were doing most of their activities indoors. These activities made them dependent on their near vision, and what the treatment restored was their long vision. So they regained the long vision so that you can walk outside, you can drive the car, but these were activities that they didn’t do that much. As part of the pathway, there was no follow up with the patient after treatment for a prescription of reading glasses. So, when they regained their long vision, they had no reading glasses at hand and couldn’t continue to do what they had been able to do before, like read newspapers, do handicrafts, etc. 

This shows that you need to combine clinical outcomes with patient outcomes and you need to combine reporting from the clinical side with the patient side to be able to really measure whether a treatment is delivering the health outcomes to the individual. 

Focusing on the patient as a move towards preventive health 

HT: How is it possible to determine the monetary value of a medical intervention based on the outcomes that matter most to patients?

Christina Åkerman: 

  1. Use the objective measure of what truly matters to patients and follow how well patients can live their lives either after an episodic medical condition or living with a chronic condition
  2. Use the quality-adjusted life-year (QALY) measure in health economic models and compare between treatments
  3. Determine efficiency gains in the cost to society – how much health care is needed, or other resources that you need to draw from.  

If you put the outcomes at the center, clinicians will be able to improve the results by comparing the performance and sharing best practices to reduce wasteful spending. Hospitals will be able to differentiate themselves, like, for example, the Martini-Klinik mentioned earlier.

Eventually, (we are at the early stages of this) that means that payers will be able to negotiate contracts based on the type of end result or outcomes that matters most. Instead of paying for a specific volume or a product or a device, you will be able to pay for a solution to a certain medical condition or underserved segment in the society.

This takes us all the way to prevention. Today we spend many resources on already existing chronic conditions, and very little on prevention. With more and more understanding of the outcomes that truly matter to patients, we will be able to shift the curve to the left and start moving towards preventing certain conditions from appearing. 

Value-based health care is a means to restore health care to its original purpose, health

Because with this information available to patients, understanding what truly matters to you, the patient will be able to become involved in a completely different way in the discussion around what type of treatment would be optimal based on the outcomes that matter most to them. And then that will open up more of a co-productivity of your own health and to be able to work more towards prevention. 

Value-based health care (VBHC) has the potential to “shift the curve” to lessen or prevent the health risk for certain conditions in a population

Source: Adapted from Rose G. (1985). Int J Epidemiol 14, 32-38; Salines and Kones. (2018). J Prev Med 3, 14

So, I see that, for the first time ever, we have objective measures that all stakeholders around the patient, including the patient themselves, can agree on as the important ones to work for. And, therefore, we can benefit in all these different ways and move our whole health care into health – to restore, I would say, health care to its true purpose, which is health. 

HT: Is that the main way you expect value-based health care to transform the model – by transforming health care to health, or is it more than that?

Christina Åkerman: I actually think that value-based health care is a methodology you can use when you are really dedicating yourself to transform to high-value care. If you have the patient and the outcomes that matter most to patients at the center, you will need to work closely together across different disciplines and not in the silos that we have today by medical disciplines and specialties.

When coming together around the patient to deliver solutions, everyone will benefit – clinicians, hospitals, and the life science industry. As mentioned, what will be a big change is that you will naturally and  automatically start working much more integrated across disciplines. And that, to me, is one of the essential results of this .I don’t think that you should try to force an organizational structure. I believe very strongly that by having patients at the center and as the starting point and the end result, you will automatically start working more in an integrated way together, and you will find an organization model that suits your country and your region, based on your current situation.

HT: When you talk about all the benefits, it makes me wonder why value-based health care has not been widely adopted? What is the main hurdle? 

Christina Åkerman: I think it’s a cultural question, in the sense of, how we traditionally see health care and how we have been educated as well. If you look at how we are educated in health care, we are educated in silos. We are educated in our disciplines and specialties. We have nursing, we have physiotherapy, occupational therapy, we have social workers, and within medicine we have surgery, radiology, etc. Everything is lined up in silos where the patient is not at the center. It’s more like a structure where the patient is moving from one bit to another instead of having the patient at the center.

When you are a patient yourself, you are dependent, in a way, on the system.  And, you might not be very strong at that moment to really voice what matters to you. So it’s easy that the machinery takes over and delivers what we believe is the best. So I think it’s very much a cultural mind shift we need. 

I mean, honestly, you know much more about the hotels you go to stay in for a vacation, or restaurants you choose to visit than your local hospital. You can read about them and you can get other people’s comments on them and ratings. You know much more about the outcomes you can expect going to a hotel or a restaurant than you know about the outcomes you can expect when going to a hospital for a certain condition. 

And that is very clear when you look at the ranking systems that we have today. How can you actually say that this is the number one hospital? Because a hospital treats many, many different conditions and segments of patients. A hospital might be very good in oncology and not very good in cardiology, for example. 

That’s why I think it’s so important to go through this transformation, to move away from the silos and into integration that puts the outcomes that matter most to the patient as the true north and at the center. Then you will be able to work in a completely different way, and ranking of hospitals will be based on outcomes by medical condition. 

Setting the incentives right both internally (recognition) and externally (payment models) are necessary to make the transformation happen. Not only the incentives but education is also extremely important moving forward. So that all involved with health and health care will be educated according to the outcomes’ perspective and not in the traditional silos. To me, that cultural transformation needs to happen before we can see high-value care and health being restored in society.

Steps leaders can take now to provide value to their patients

HT: What are the steps you think health care providers need to be taking today to prepare for value-based health care?

Christina Åkerman: 

  1. Start focusing on the outcomes that matter most to patients with a specific medical condition or in a specific segment e.g. older persons. Make sure your organization has this focus, whether it’s an individual clinic, group of hospitals , a payer, or the life science industry. 
  2. Standardize outcomes to know what to measure with what survey and at what time points. Have all of your organization involved and educated on the transformation journey.
  3. Invest in interoperable informatics systems to capture the outcomes. Benchmark your results internally/externally and establish learning communities to share and learn.
  4. Make sure that incentives and reimbursement are set up based on the outcomes. This will  benefit not only the individual but also the health care system. Most payments today and incentives are based on volume. We should try to move away from volume to value because when you understand what brings value, then you can scale that value in the ecosystem created and get rid of a lot of wasteful spending.

HT: You mentioned earlier the Martini-Klinik in Hamburg. Are there any other health care systems that have successfully implemented value-based health care?

Christina Åkerman: There are many exciting examples to share when it comes to the transformation towards high-value care. To mention a few, in the Netherlands a group of hospitals, the Santeon Group, are dedicated towards putting the outcomes at the center with what they call “Care for Outcomes, Care for Improvement”. They have created a community for improvement cycles, and they have differentiated their hospitals by specializing in certain treatments.

I think they are a very interesting group of hospitals demonstrating how you can put the outcomes at the center, work in an integrated way, and work together in benchmarking and learning communities. 

If we move to the incentive side and reimbursement, Netherlands is a country that is also  quite advanced in this part of the transformation. Diabeter, is a group of clinics, taking care of young people with diabetes. They have been able to put in place a reimbursement contract over a period of 10 years with an insurer in the Netherlands, which is an exciting step towards incentives focused on outcomes and a holistic solution for their patients over a ten-year period.

HT: Are there things that people say about value-based health care that you feel are not correct, or are misconceived?

Christina Åkerman: I think that value-based health care as a term could be misinterpreted. At least in certain parts of the world, it has become a little bit like a type of organization model. And the model comes before the outcomes. But the center needs to be on the health outcomes that matter most to patients.

Value-based health care to me is not an organization model. It’s about putting the outcomes that matter most to the patient as the true north. 

The way you organize yourself comes naturally once you put the individual, the unmet needs, the outcomes that matter most to patients at the center as the true north and the starting point of your work.

HT: You mentioned that “value-based health care” is perhaps not the right term, what would you recommend we use?

Christina Åkerman: I talk about outcomes as the true north in order to achieve high-value care. Value-based health care is more like a methodology you use to achieve high-value care. I would emphasize more outcomes and outcomes-based health care. And there begins the journey to high-value care.

*Editorial note: In the context of VBHC, we respectfully separate “healthcare” into “health care” to reflect the convention used by Professor Michael Porter and Professor Elizabeth Teisberg, which signifies that health care is not only about treatment and care but about achieving health.

Christina Åkerman, MD, PhD, EMBA is Affiliate Faculty at the Dell Medical School at the University of Texas at Austin, Senior Institute Associate, ISC, Harvard Business School, and on the Steering Committee of the Coalition for Health, Ethics and Society at the European Policy Center. Until August 2018, she was the President of the International Consortium for Health Outcomes Measurement. She has also served as Director General for the Medical Products Agency in Sweden, been a Member of the Board of the European Medicines Agency and President of AstraZeneca Philippines.