Post date: Jan 4, 2011 3:26:45 PM
Michael Porter published a piece in the New England Journal of Medicine (make sure to get the two supplements) on defining value in healthcare. He defines value as "the health outcomes achieved per dollar spent." It is a patient-centered definition that "unites the interests of all actors in the system". He goes on to say "If value improves, patients,
payers, providers, and suppliers can all benefit while the economic sustainability of the health care system increases."
There are a number of assumptions that underlie this definition. First, equitable allocation of benefits among actors. Second, compensation for services can be tied to value creation. I look to e-prescribing to see how these assumptions work out in practice. The prescriber does more work at behest of the system. The pharmacy pays to receive an e-script that strips out any value that have might been generated (e.g., formulary or DDI check) before it is sent. Any increase (and with generic substitution in most states the improvement not clear) in generic usage accrues primarily to the pharmacy benefit manager (PBM) or payer. The infomediary (partially owned by PBMs) collects 21.5 cents per prescription (translation - hundreds of millions of dollars when fully adopted). It seems the service provider gets left out in the way US e-prescribing is implemented. Obviously value is more complex than this simple analysis. I'm currently reading up on value network analysis to see if there might be a way to operationalize the health care value proposition.
References:
Allee, V 2008, 'Value Network Analysis and Value Conversion of Tangible and Intangible Assets', Journal of Intellectual Capital, Vol. 9, no. 1, p. 5-24
King, N 2008, Overcoming Ambulatory E-Prescribing Adoption Challenges: Governments Shaping Innovation on Behalf of Individual Stakeholders, IBM Center for the Business of Government. Available at SSRN: http://ssrn.com/abstract=1334653.
King, N, Christie, T & Alami, KM 2007, 'Process Implications of E-Prescribing Information Integration Models: United States Versus a Middle East Approach', E-service Journal, Vol. 5, no. 3, pp. 15-38.
Lee, TH 2010, 'Putting the Value Framework to Work', New England Journal of Medicine, Vol. 363, no. 26, pp. 2481-3.
Porter, ME 2010, 'What Is Value in Health Care?' New England Journal of Medicine, Vol. 363, no. 26, pp. 2477-81.