The Health Advocate - Issue 53 / June 2019

Page 12

ELIZABETH TEISBERG PhD, Executive Director, Value Institute for Health and Care, Dell Medical School and McCombs School of Business, The University of Texas at Austin

SCOTT WALLACE, JD, MBA, Managing Director, Value Institute for Health and Care

SARAH O’HARA, MPH Course and Content Specialist, Value Institute for Health and Care

What is value in healthcare? What do organisations mean by value?

While reducing unnecessary costs is important,

Value-based healthcare has become a common

cost reduction alone won’t solve the problems

phrase. Throughout Australia and around the

facing healthcare. If care is ineffective at

world, healthcare organisations routinely proclaim

improving health, simply paying less for it may

that ‘value creation’ is a primary aspiration.

reduce wasteful spending, but doesn’t create

But what do these organisations mean by value? The technical definition is that value in healthcare is the improvement in patient health outcomes

value. The focus of reform must be to improve health outcomes. In that same vein, value differs from quality

for the cost of achieving those outcomes.

improvement. Quality tends to focus on improving

The healthcare system creates value when

processes, some but not all of which improve

it provides people with better health for an

outcomes. Handwashing compliance, for instance,

equivalent or lower amount of money.

is a common hospital quality indicator, but it

Value is often confused with cost reduction.

creates value only if it reduces healthcare-acquired infections.


The Health Advocate • JUNE 2019