Value-Based Health Care: Now is the time to focus on outcomes, not outputs

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This op-ed was originally published by The Hill Times of Ottawa on November 6, 2019. It was written by Monika Slovinec D’Angelo and Cameron MacLaine of The Conference Board of Canada.


Health care in Canada is fragmented and struggling with rising costs and varying quality of care. During the election campaign, parties touted pharmacare as a way to lower costs, but does it? How else can we pay for this big-ticket budget item? Now is the time to position Value-Based Healthcare in Canada as a transformative approach to our health systems.

Universal pharmacare, or universal public coverage of medications, was highlighted by some parties in the campaign as a way to lower costs. Indeed, all Canadians should have access to necessary medications. Yet the extent to which universal public coverage of medicines can reduce the financial burden is only speculation at this point.

In terms of cost, the primary benefit of a universal public model would be lower pharmaceutical expenditures for individuals and insurers. The shift of privately spent dollars to public expenditures must be considered, including the possible benefit reductions for current holders of private insurance. The resulting expenditures in other areas of the healthcare system, however, are rarely mentioned: the tax burden, administrative and transition costs and complexities, and the potential reduced access to necessary medicines and drug shortages due to reduced R&D investment in Canada. It’s also important to maintain that pharmacy is only one service that patients rely on in our overall health care system.

The intended and unintended consequences of policy change must be thoroughly explored; above all, the impact on patient outcomes. Not enough evidence exists to fully understand how pharmacare models can improve access to medicines, value for money, and patient outcomes. Any model must ensure continued patient access to the same range of innovative treatments to remedy illness and maintain quality of life.

We need to reduce fragmentation, reduce inefficiencies, and address the full trajectory of care from prevention and promotion of health, to treatment, rehabilitation, and home care.

Pharmacare is not a stand-alone solution. Other health services, policies, and factors such as social determinants of overall health need to be considered. Addressing factors like housing, transportation, or food security, is bound to have an impact on need for medication. Today’s care delivery is fragmented, and payment models often incentivize volume rather than outcomes—resulting in higher costs. We need to reduce fragmentation, reduce inefficiencies, and address the full trajectory of care from prevention and promotion of health, to treatment, rehabilitation, and home care.

A comprehensive, patient-centered perspective is needed to assess the value and effectiveness of our health care system. With a focus on outcomes rather than outputs (i.e., on the unit of improvement in patient health outcomes, not on the unit of service or treatment), health care dollars spent can be linked to outcomes that matter to patients, rather than to the volumes of services, processes, or products that may or may not achieve those outcomes. That’s value.

A value-based approach to health care is a transformative business model—one that drives value in the health care system through efficient provision of optimal care. It offers a patient-centric framework for designing and managing health systems in a way that delivers substantially improved health outcomes at significantly lower cost.

The model rests on three foundational principles: improving patient outcomes through systematic measurement of health outcomes that matter to patients and the costs required to deliver those outcomes across the full cycle of care; efficient use of resources through ongoing tracking of those outcomes and costs for the full trajectory of care for defined population segments; and improving access to appropriate care through customized health care service bundles that optimize value for each population segment.

With this approach, cost savings come from improved short- and long-term health outcomes (including quality of life), system efficiencies, and strategic re-investments into the system.

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Improved health outcomes are the product of integrated and coordinated care. It enables timely access to the right treatment, for the right patient, at the right time. System efficiencies are gained through appropriate use of health human resources that increases productivity of health care teams. Additionally, value-based procurement methods consider how products or solutions can reduce the total cost of care rather than focusing on the lowest possible prices.

Better patient outcomes mean fewer complications, the return to desired levels of functioning, and reduced burden on the social system. We need a healthy, productive workforce to meet and manage the growing patient population that will challenge the sustainability of health systems.

Value-Based Healthcare (VBHC) Canada was launched by The Conference Board of Canada to build on domestic and global experiences toward a value-based transformation of health care in Canada.

VBHC Canada is guided by a strategic program to build system-level capacity through knowledge exchange and leading research. The aim is to establish a foundation for policy decision-making, to understand existing assets (including data requirements and access to enable systematic measurement of outcomes and costs), inefficiencies, value of investments, and to produce practical Canadian evidence to drive value-based changes.

It’s time to move past a hypothetical one-stop solution for all that ails our health care system. Much like an individual patient with multiple needs, health care is a complex problem that requires a full picture approach, one that should focus on outcomes, not outputs.

Monika Slovinec D’Angelo

Monika Slovinec D’Angelo

Director, Health

Cameron MacLaine

Cameron MacLaine

Research Associate, Health

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