Centring Value in Healthcare
October 19, 2022
To reach a goal, you need first to define it. So it’s fair to ask: What is the goal of healthcare? We might say it’s simply to make people healthier. But healthier in what ways? For how long? At what cost to the system? And how do we measure the improvement?
Value-based Health Care (VBHC) addresses all these questions. VBHC seeks to improve health outcomes in meaningful ways throughout the care path. While it doesn’t ignore costs, it steps away from the temptation to cut costs right now and instead looks at the whole cycle of care. It prioritizes prevention, early diagnosis, and timely treatment to reduce future spending on more advanced disease. It shifts the focus from delivering healthcare services (volume) to delivering health (value).
Within the sphere of specialty medicine, VBHC measures the total value of new medicines and acts on the information to benefit patients. It also establishes system-wide benchmarks, spots clinically unreasonable variations in practice, and takes steps to improve them.
WHAT VBHC IS AND WHY IT MATTERS
Back in 2004, a Harvard Business Review article called “Redefining Competition in Healthcare” helped plant the seeds of VBHC.8 The co-authors of the article, Michael Porter and Elizabeth Teisberg, argued that a zero-sum competition mindset was weighing down healthcare. “Passing costs from one player to another, like a hot potato, creates no net value,” they wrote. Instead, they invited stakeholders to “compete to be the best at addressing a particular set of problems.” That way, the system would generate value, rather than simply dividing it.
Porter later distilled these ideas into a simple definition of VBHC: outcomes relative to costs.1 Which outcomes, though? Teisberg addressed this question with a modified definition of VBHC—“outcomes that matter to patients.”2 To VBHC expert Christina Åkerman, this clarification makes all the difference. As she sees it, the problem in healthcare delivery and measurement lies in “not knowing what matters most.” Before getting our yardsticks out, “we should therefore always ask ourselves: How well do we know the outcomes that matter most to the patients we intend to serve?”9
The European Commission widens the VBHC lens to include four distinct but overlapping pillars:4 value to patients (personal value), making the best use of resources (technical value), distributing resources equitably (allocative value), and contribution of the healthcare system to societal well-being (societal value). This model could easily map onto the Canadian healthcare landscape and philosophy, which gives strong consideration to equity and social inclusion and more closely resembles European than American healthcare.
VBHC across the world
However we define it, VBHC is gaining prominence in the global healthcare agenda. In a 2021 white paper on healthcare systems innovation,10 the World Economic Forum (WEF) recommends harnessing VBHC approaches, such as evidence-based modelling studies and outcomes-based agreements, to help capture the value of precision medicine and improve access to specialty medications with life-changing potential. Jurisdictions around the world are also using VBHC principles to guide broader health decisions and policies.
While American hospitals have been applying VBHC for years, international examples may resonate more with our Canadian healthcare system. In 2010, a group of 6 hospitals in the Netherlands formed an alliance called Santeon and adopted a VBHC strategy to improve patient care.11 Starting with lung and prostate cancer, the consortium developed its own performance indicators and collected retrospective data going back 6 years. This led to an insight the group might otherwise have missed: the more expensive CT test for lung cancer didn’t necessarily outperform standard chest radiography. On the flip side, robot-assisted prostatectomies perform better than traditional surgery. Rather than purchasing additional robots, the group saved costs by concentrating robotics expertise in a single hospital.
More recently, international experts from Academia VBHC used an instrument called the Atlas of Variation in Healthcare to expose unwanted and previously unnoticed variations in clinical practice in Brazil.12 The loss of life due to cardiovascular disease, for example, varies by a factor of up to 5 among health regions, while the rate of Cesarean deliveries swings between 19.5% and 84%, a 4.3-fold variation. While some variation in outcomes is to be expected, an intervention that only works half the time signals a value problem, as does a high degree of variation between treatment centres or geographic regions. Brazil is now using the Atlas to guide its health policies.
THE VBHC OPPORTUNITY FOR CANADA
Here in Canada, we’re seeing a growing appetite for the principles of VBHC, especially since the Covid-19 pandemic, which proved once and for all that a health system can surpass itself in a hurry. A report on VBHC readiness indicates that Canada has all three of the criteria needed to get VBHC up and running:13 patient-centred care, payment models linked to quality, and standardization of healthcare quality.
With the pipeline of precision treatments putting increasing pressure on our health system resources, VBHC offers an agile and equitable approach to assessing medical innovation while ensuring access. VBHC also slides naturally into an interlocking health system like Canada’s, in which improved outcomes, efficiencies, and cost-effectiveness benefit all stakeholders, including private payers.
Quebec’s health technology assessment agency, INESSS, has put value at the centre of its strategic plan.14 Not to be outdone, the province’s Health and Wellness Commissioner has pledged to include relative value in its evaluation framework for long-term care facilities, enlisting no fewer than 71 performance indicators to the cause.15 Individual centres are riding the same wave: in collaboration with the Quebec Cancer Coalition, Montreal’s Jewish General Hospital is folding VBHC into a quality improvement initiative for colorectal cancer patients, with a similar model for people with lung cancer soon to follow in Quebec City.14 Also in the provincial capital, the University of Laval Lung Cancer Institute has value-loaded the diagnosis and molecular testing of lung cancer, slashing the time between referral and treatment from the provincial mean of 56 days to just 26 days.16
The quest for value extends across the country. In 2015, the Canadian Institute for Health Information (CIHI) launched a PROMs [Patient Reported Outcome Measures] program and recently published a PROMs data collection manual for hip and knee arthroplasty.17 New Brunswick’s Primary Healthcare Integration Initiative aims for better collaboration among healthcare services offered in the community, from ambulance services to home care.17 At Providence Health Care in Vancouver, British Columbia, VBHC is a key element in their Health Systems Redesign – an initiative which includes designing new physical spaces at St. Paul’s Hospital opening in 2027, bringing teams together to improve integration of care across the patient’s journey, and strengthening focus on what matters most to patients. Ontario has introduced bundled payment models that create incentives for integrated care, targeting such interventions as hip and knee replacement surgery and dialysis.18
“When looking at VBHC, hospitals represent the biggest opportunity,” notes Jason Sutherland, a professor at the University of British Columbia’s Faculty of Medicine.19 No surprise, as “they’re the biggest cost to the system.” With up to 15 percent of hospitalized patients lacking the community support to get discharged, bundling hospital care with short-term home care seems a logical place to start.19
The pharmaceutical industry contribution to VBHC
The past two decades have poured extraordinary innovation into the specialty pharmaceutical landscape. Immune therapies that attack specific tumour cells, treatments for ultra-rare diseases, cell therapies that can regenerate diseased tissues… previously unimaginable treatments have become a reality, and the pipeline shows no signs of slowing down. While the new medications don’t come cheap, they can save costs to the system over the long haul. At the same time, their promise outpaces the evidence typically required for HTA and payers, increasing uncertainty and leaving questions about their value despite their relevance to patient needs.
Applying a VBHC framework can help track the full value of these medications over time and in various health settings, allowing the strong performers to ride out the early data gaps and find their rightful place in the therapeutic arsenal. In this sense, VBHC can serve as an ally to pharmaceutical innovation.
Through collaborative partnerships and data-sharing arrangements with the public sector, industry can give the VBHC agenda a further push. The World Economic Forum has a few suggestions to get such partnerships off to a successful start:20 1) focus on outcomes that matter to patients, 2) engage partners across the whole health system, 3) anticipate challenges, and 4) focus on the problems within a particular health system, rather than cutting and pasting solutions from other jurisdictions.
Three pharmaceutical leaders share their thoughts about VBHC
What does VBHC represent to a major pharmaceutical company? To Angela Behboodi, Government Affairs Director for Amgen Canada, it means “improving quality and outcomes, treating patients with the interventions that are best suited to them.” Behboodi welcomes the paradigm shift. “VBHC requires us to rethink how we spend our health resources and ensure we incentivize outcomes over activities,” she says. The current healthcare delivery model is largely reactive—what Behboodi describes as “break and fix.” A value-oriented mindset also asks payers and policymakers to look beyond costs and toward better outcomes for all Canadian patients. Early and appropriate use of medicines can reduce the need for more expensive healthcare interventions down the line, easing demands on publicly funded resources.
“The right treatment, at the right time, based on each person’s unique needs and preferences” is what value means to Cynthia Di Lullo, Pfizer Canada’s Oncology Lead. “An outcome that’s valuable to one person may have less value for another, and we need to capture that.” In addition to addressing individual patients’ needs, Di Lullo sees VBHC as a way to optimize resources across the healthcare system. “Better health outcomes and a better use of resources benefits all stakeholders over the long term.” According to Di Lullo, VBHC aligns well with Pfizer’s own vision of healthcare, and “a patient-centric mindset is embedded in everything we do.”
Carlene Todd, Vice President of Access at Roche Canada, looks forward to public-private partnerships that will “truly bring industry to the VBHC discussion table.” In her view, “sharing expertise and aligning on commitments to patients can only bring good things to all parties.” While neither industry nor government can build a value-based healthcare system alone, “together we can go farther to give patients the outcomes they deserve, faster.” Roche’s strong focus on collaboration has led the company to support several platforms for change, such as the pan-Canadian Health Data Strategy Consultations and the pan-Canadian AI Strategy. “A continuous flow from data to evidence to insights is what enables us to create value,” says Todd. It’s also key to “building a resilient and sustainable healthcare system.”
As a testament to the industry’s commitment to creating value, these companies are participating in a multistakeholder VBHC demonstration project in colorectal cancer in Quebec and look forward to applying the learnings to drive best practices.
MEASURING VALUE
Once we’ve defined value and agreed that we want it, we need to measure it. This starts with diagnostic testing, which can help identify the right patients for a complex treatment. “The importance of diagnostics tends to be underestimated in relation to therapeutics”, says VBHC educator Dr. Marcia Makdisse.21 But “a timely, correct and safe diagnosis process leads to early and appropriate care and enhanced recovery, impacting positively both outcomes and costs throughout the continuum of care.” Poor diagnostic practices, on the other hand, can cause both testing complications and overuse of low-value treatments.
When measuring treatment outcomes, we need to establish what patients value most. Would that be overall survival? Reduced symptom burden? Rather than assuming, we can ask. A group of Canadian researchers did just that, in a study of people with colorectal cancer from across the country. The team used experiential tools to assess subjects’ experiences across medical, physical, mental, and emotional dimensions.22 What the researchers learned: during diagnosis, subjects placed the greatest value on compassionate communication and support from caregivers. During active treatment, meaningful discussions about options helped alleviate their anxieties. Those who recovered sought above all to regain a sense of competence and calm. The best way to design compassionate and meaningful care, the researchers concluded, is to “listen to the experts: people with lived experience.”
“To design compassionate and meaningful care, you need to listen to the experts: people with lived experience.”
For prostate cancer patients, fears of post-op incontinence and erectile dysfunction may rival or even outpace concerns about long-term health. In recognition of this reality, the Martini-Klinik, a specialty prostate cancer clinic in Germany, now uses such outcomes in evaluating the quality of its care.23 Similarly, a lung cancer clinic in Belgium demonstrated that collecting patient-centred outcomes improved value by reducing emergency department (ED) visits and time spent in a day clinic, and even ensuring better quality of death.24
PROMs and PREMs as VBHC tools
Patient-reported outcome measures (PROMs) have gained currency as an endpoint in clinical trials and other studies. PROMs focus on aspects of health that impact quality of life, such as ability to carry out day-to-day activities and mental health. A more recent category called patient-reported experience measures (PREMs) considers patients’ perceptions of their care within the health system. PROMs and PREMs serve as powerful tools in the assessment of value and, in complement to clinical and administrative data, can help inform policy, programs, and value-based care delivery.25
The Canadian Institute for Health Information (CIHI) used PREMs to assess the performance of Canadian acute-care hospitals, focusing on how hospitalized patients perceived the coordination of care, treatment by nurses, and emotional support during their stay.26 On this basis, they determined that 65% of patients had an overall “very good” hospital experience—encouraging, but with room for improvement.
The long game
To align with VBHC, outcomes measurement needs to shift from our current focus on spending to a focus on continuous improvement. Instead of tallying up the costs of a medical intervention in isolation, we need to look at its impact on the patient and healthcare system over time. To this end, the Quebec Cancer Coalition’s VBHC implementation project in colorectal cancer, spearheaded by Eva Villalba, seeks to establish a baseline cost for the whole trajectory of care relative to outcomes. “Governments should know how much the care path costs, but they’re not actually measuring it,” says Villalba. “They end up making decisions based on saving money on drug costs, which ends up costing more due to increased ER visits, complications, and rehospitalizations down the line. We’re trying to change this short-term thinking.”
The same reasoning leads Villalba to support the use of the DaVinci surgical robot, used for a range of procedures including prostate cancer surgery, gallbladder surgery and hysterectomy. “It’s cheaper for humans to do the surgery as a one-off, but the robot provides more value because it performs the surgery more precisely and with fewer complications for the patient,” she says.
The measurement of outcomes needs to zoom out to whole populations, capturing variations that may impact certain socioeconomic, demographic, or ethnic groups—such as the increased rates of diabetes in Indigenous communities or the poorer outcomes from Covid-19 in racialized communities. Teresa Tam, Canada’s chief public health officer, acknowledges the need to “prioritize the collection and analysis of race-based data across the country.”27 In a similar vein, Villalba has been agitating for a detailed cancer registry to capture the added vulnerability to lung cancer in residents of Rouyn-Noranda, a Quebec town that sprang up around the Horne copper foundry.28 Such data make it possible to create targeted prevention and treatment strategies for these communities.
The investment required to create and measure value calls for new funding and reimbursement models. Outcomes-based agreements (OBAs), for example, support value creation by tying reimbursement to outcomes. OBAs lend themselves especially well to potentially life-changing treatments that lack the traditional clinical evidence to establish value and satisfy payers. Treatments for rare conditions often fall into this category. OBAs can step in to fill the access gap while gathering real-world data to justify reimbursement – or not.
PUTTING VALUE ON THE AGENDA
The advent of highly targeted specialty treatments has given new urgency to the goal of delivering “the right treatment to the right patient at the right time,” and it’s only by measuring value that we can get there. In deciding which outcomes to measure, we need to keep asking patients: “What is important to you?”
Our current system rewards volume – the delivery of health services (such as hernia surgery or chemotherapy), irrespective of value. A VBHC-oriented system rewards an outcome rather than a service, representing a profound philosophical shift. Putting appropriate incentives for improvement in place, and measuring what we want to improve, can help make it happen.
VBHC can propel us to the broader goal of a learning healthcare system, in which research, care, social services management, and population health join forces in a self-reflective and continuously improving network.29 Rather than standing still, such a system remains in perpetual motion – “measuring, analyzing, taking action… and measuring again.”29
The recent pandemic has called attention to the need for a resilient healthcare system. By using data to improve processes, outcomes, and efficiencies, VBHC supports this objective. With the momentum gained during Covid, Canada has an opportunity to put value at the forefront of its healthcare system. It’s only by prioritizing value that we can give patients what they need: not health services, but health.
References
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29. What is a learning healthcare system? SSA Quebec. https://ssaquebec.ca/en/the-unit/learning-health-system/