Term: Value Based Health Care

Description: Value based health care is the implementation of standardizing the methods used to measure the quality of health care being given, as well as the pricing information. By doing this consumers would be informed about the quality of health care they are receiving as well as the price which would in turn motivate health care providers to provide a better quality care with better efficiency. In order to move forward to achieving this, the following four cornerstones must be developed.

1. Interoperable Health Information Technology
At the time being, health care is behind the curve in the interoperability aspect. Standards need to be set in place so that providers and consumers are able to exchange data accurately, efficiently, and securely. By getting rid of paper files and putting Electronic Health Records, or EHRs, into practice health care providers will have instant, secure access of patient records. In the same way, patients will be able to coordinate and monitor their care among different providers.

2. Measure and Publish Quality Information
Both consumers and providers alike need to be aware of the quality of health care given by practice, hospital, etc. Consumers should be aware of who provides the highest quality of care, or where the provider rates on a scale to determine whether or not it is a smart decision to go to them. Providers need to be aware of where their place of work rates on the scale to determine what, if anything, they need to do to improve. Organizations such as the AQU, the Hospital Quality Alliance, and the Quality Alliance Steering Company have already joined together to create standards and measures for the quality of care given.

3. Measure and Publish Price Information
With insurance companies paying for part of the care we receive, as well as our co-payments, no one really has an idea how much we are paying in total. Right now most of our spending in health care is not going to truly valuable procedures. This in turn is making health care costs rise. At this time insurers and payers are working together to provide price transparancy to the consumers. Wide participation is needed from doctors and hospitals alike to be able to get the big picture.

4. Promote Quality and Efficiency of Care
At the moment health care costs the same no matter where you go. It can be compared to buying a Corvette for the price of a Ford Focus. By providing consumers with an option between high quality at high cost or low quality at low cost, you are allowing them to personalize the care they receive. Incentives are also for doctors and at the time Medicare and insurance companies are trying out pay for performance incentives as well as competitive bidding where doctors and hospitals are rewarded for quality of outcome


Applications:
  • Lowers costs for consumers
  • Improves quality of health care
  • Provides consumers with accurate pricing information
  • Allows doctors to communicate effectively regarding a patient

Web Resources:
U.S. Department of Health and Human Services, Harvard Business School


Related Terminology:
Electronic Health Record, Price Transparency, Interoperablility

Citations/References:
Forbes Magazine, U.S. Department of Health and Human Services