Health systems around the world face a value problem. Costs continue rising, yet there is massive variation in patients’ health outcomes. The return on investment in terms of outcomes achieved for money spent is often unclear, and sometimes even negative.

The good news? There’s an answer to this problem: value-based health systems that focus on continuously improving patient outcomes and costs.

Image: Global Coalition for Value in Healthcare

The bad news however, is that transitioning to a truly value-based health system is hard. Clinicians must capture new patient data and reorganize care delivery. Payers must negotiate new types of payment contracts. Governments must devise new regulations to support these changes. Most importantly, since the healthcare sector is notoriously complex, achieving value-based health-system transformation requires cooperation and buy-in from many players in the system.

There are no silver bullets to address this collaboration challenge, but health systems around the world are experimenting with new models of cooperation. To support these efforts, we have developed a User Guide for value-based health system transformation. The guide takes a problem-driven approach and encourages stakeholders to ask six basic questions:

1. What is the value problem we are trying to solve and for whom?

2. Who are the stakeholders needed to address this problem?

3. What are the root causes of the problem?

4. What solutions can address these root causes?

5. How will we implement our solutions?

6. What are we learning that we can scale up across the system?

To illustrate how these questions can catalyze value-based transformation, imagine a fictional country - let’s call it “Healthlandia” - aiming to improve value for lung cancer patients.

The Healthlandia lung cancer initiative

Healthlandia is a small developed country where over 95% of the population has health insurance, through a combination of private and public payers. The country has three academic medical centres with leading oncology programmes and many smaller hospitals, all privately run.

Healthlandia’s initiative to create a value-based health system for lung cancer began when the leading cancer patient advocacy organization in the region conducted a multi-country comparison of health outcomes. The report highlighted Healthlandia’s unusually wide variation in lung cancer outcomes. Average lung cancer mortality in the country was worse than the regional median, and certain Healthlandia provinces had mortality rates worse than those of the worst-performing country. What’s more, Healthlandia was spending slightly more per patient than other countries in the region, meaning the country delivered low value for lung cancer patients overall.

The report helped the patient advocacy organization convene key leaders in Healthlandia’s health system to address this problem. The group created a steering committee consisting of executives from the country’s biggest private payers and pharmaceutical and medical technology companies, Ministry of Health officials, leading clinicians at the academic medical centres, and patient representatives. Each organization also appointed representatives to a working team, which met several hours every week and which the patient advocacy organization managed. Ready with a clear case for change, and a politically neutral organization to facilitate the initiative, the group had a strong starting point for collaboration.

At first however, the working team struggled to structure its work. Each organization had its own ideas about how to tackle the problem, and everyone immediately started by promoting their own agenda. This approach made it difficult to get consensus and eroded trust among participants.

To escape this trap, the project managers proposed trying to understand the problem from the patient’s perspective, and to use that perspective to identify limitations in the current health system. This approach highlighted some key root causes of the variation in health outcomes for lung cancer:

1. Challenges measuring patient outcomes, in particular patient-reported health status, made it difficult to assess the quality of care

2. Wide variation in lung cancer screening rates meant that patients often did not get referred to treatment as early as possible

3. Differences in patients’ drug regimens were driven less by a patient’s health profile than by whether the physician knew about the many new treatments that had launched in recent years

With a better understanding of these system-wide obstacles to value, the working team could more easily focus its efforts. It designed the following targeted solutions to address each root cause.

1. The academic medical centres piloted an EMR-based approach to capture a standard set of outcomes and demographic metrics for patients, and to publicly report anonymized and risk-adjusted data to compare their performance

2. The private payers piloted a small bonus payment to primary care physicians who referred patients for lung cancer screening and evaluated the payments’ impact on screening rates

3. The Ministry of Health updated and republished its clinical algorithm of drug regimens for lung cancer patients and tracked physician awareness of the algorithm; meanwhile, the pharmaceutical companies used the data generated from solution #1 (tracking and reporting data) to conduct real-world evidence studies of their products

This portfolio of solutions had two advantages. First, it involved a broad range of players cooperating to improve patient value, but it did not preclude competition among the private sector. Rather, it provided them with the tools to compete on what really matters: patient outcomes. Second, these solutions were not “quick fixes”; rather, they provided a starting point with built-in assessments that allowed the system to learn from experience and improve over time.

Because the organizations who designed these solutions saw benefits both for patients and their own organizations, they willingly committed resources to them. But the public-private collaboration needed another key element: support from political leadership. Fortunately, because key government representatives contributed to the initiative from the outset, Healthlandia’s Minister of Health was happy to endorse it.

Executing solutions such as those identified by the Healthlandia lung cancer initiative is a complex task requiring clear governance and neutral project management. Collaborating for system-wide impact will invariably run into challenges as leaders change and disagreements arise. It will require a broad network of champions and a collaborative environment that can sustain creative tension. But such initiatives represent an important first step to address problems that matter to everyone in the health system - and especially to patients themselves.

For more information on this work and approach, please see the report "Value in Healthcare: Accelerating the Pace of Health System Transformation".