How to make value-based healthcare work in Europe

Value-based healthcare has been hailed as the ‘strategy that will fix healthcare’, with advocates claiming that putting the focus on outcomes rather than activity will help raise standards, reduce variation and equip health systems to cope with growing demand.

But the question is whether the patient-centric method proposed by the father of value-based healthcare, Harvard economist Michael Porter, fits all – or indeed any – of Europe’s universal health systems.

“Focussing on value is inevitable,” says Muir Gray, one of the leading European experts in the field. But, he says, the Porter model does not go far enough for countries with universal health coverage, that is, any developed country other than the US.

“Porter’s American approach to value doesn’t consider whether we are allocating resources to particular populations in need – people with cancer or respiratory disease, for example – or whether we are using the allocated resources for the people who would benefit most,” Gray told Healthy Measures.

Porter’s prescription can be summed up as, ‘outcomes that matter to patients, divided by the cost of achieving those outcomes’. In practice, this means working with patients to define standard outcomes for each disease area, and setting up systems to track these results.

Some hospitals have built IT systems that monitor everything from patient wellbeing to surgical complications, shining a light on variation between clinics and as a result, getting better value for money.

The focus on value has also sparked a rethink about how systems are funded. Porter wants health systems to measure and reward not what goes in but what goes out – an idea already being piloted in several centres including through a partnership between hospitals and private insurers in the Netherlands.

Gray, formerly chief knowledge officer of the National Health Service (NHS) in England and now Director of the consultancy Better Value Healthcare, argues the definition used in the US aims to get the best outcome for a patient presenting at a given clinic, but does not help a health minister or payer responsible for the health of an entire population.

Decision-makers in universal systems need to consider equitable access to care and support preventative measures to reduce future costs, Gray said. Policymakers in Europe must also consider the wider impact of ill-health on tax revenues and social welfare systems. These elements are not captured by proponents of value-based healthcare.

“The American definition of value is about outcomes and the resources needed to achieve those results,” says Gray. “We would call that efficiency. Porter’s approach may not always fit the healthcare model in countries with universal healthcare coverage where we are talking about making public health systems sustainable.”

Gray prefers the example of Scotland’s Realistic Medicine programme where doctors are encouraged to accelerate the adoption of high-value innovation and to quickly abandon low-value technologies and drugs, while staying within strict spending constraints.

Outcomes matter, not systems

For his part, Porter believes value-based healthcare can work in systems of all hues. One essential element of his model is the Integrated Practice Unit (IPU) which brings together all services for a specific disease on a single site.

The IPU has already yielded impressive results in Europe. One Dutch diabetes centre has used the Porter blueprint for specialist care to improve outcomes and curb costs, while a German prostate cancer clinic has attracted praise for using multidisciplinary value-based care to improve patient outcomes.

“Worldwide, in every health care system, the focus needs to be on value for patients,” Porter told Healthy Measures. “Whether we have a single payer system or individual provider organisations and multiple payers, outcomes that matter to patients should be the focus and controlling costs for all systems is critical if innovation is to be applied to improve the health of everyone, no matter what healthcare system is in place.” 

Europe has a variety of models of healthcare delivery, from the Dutch-style insurance-based system to the UK’s single-payer NHS. The Porter doctrine has been piloted at centres in several European countries, including parts of Wales where a value-based healthcare team collects and analyses data on how budgets are spent.

Sally Lewis, assistant medical director, NHS Wales, says its methodology draws heavily on the work of both Porter and Gray. “The strength of Porter’s analysis is in the detailed work around cost and outcome measurement, including time-driven activity-based costing,” she said. Porter also deserves credit for a global drive towards more consistent outcome monitoring through the International Consortium on Healthcare Outcome Measurement (ICHOM).

“The weakness of Porter’s work is that it does not deal with allocative value, something that is an essential consideration in a publicly-funded system as it encourages us to direct resource to where it will have the greatest impact,” said Lewis.

For decision-makers with tight budgets this can mean weighing the value of spending on cancer care against dementia services, or allocating resources to drug treatment versus rehabilitation services.

Despite differences between experts on the finer points of how to achieve better value, the push for greater attention to health outcomes continues to gather momentum.

Coupled with more investment in preventative measures, Gray said this can help steer health systems onto a more sustainable path. “We need to put much more focus on prevention and pay greater attention to measuring outcomes. We also need to factor in the resource time of patients and health professionals, and consider sustainability in the broad sense – including the health system’s carbon footprint.”