How often does healthcare policies change

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Nearly all actors identify cost containment and achieving an operating surplus as among their principal aims. In addition to the existence of multiple goals, different actors in the system define the objective function differently, a sign that the participants may be working at cross-purposes. I believe that many of the difficulties in improving healthcare delivery stem from confusion and disagreement about defining, measuring, and rewarding value.

The primary objective for healthcare delivery should be value for patients, measured by patient health outcomes per dollar expended to achieve those outcomes. Value is the only goal that unites the interests of all the parties in the healthcare system. Improving value is also fundamental to achieving all the other goals, such as expanding access and improving equity.

Value in any field must be defined around the customer, not the supplier. Value must also be measured by outputs, not inputs. Hence it is patient health results that matter, not the volume of services delivered. But all outcomes are achieved at some cost. Therefore, the proper objective is the value of health care delivery, or the patient health outcomes achieved relative to the total cost inputs of attaining those outcomes.

Efficiency, as well as other objectives such as safety, are subsumed by value. Health outcomes refer to the set of objective outcomes, not just patient perceptions of outcomes which can be biased toward the service experience.

There is not just one outcome of care for any health condition, but multiple outcomes that jointly constitute value. Patient circumstances and preferences will affect the weighting of these outcomes to some degree, a subject discussed later.

The costs of achieving outcomes refers to the total costs involved in care, not just the costs borne by any one actor or for any particular treatment or episode.

The mismeasurement of costs works against true value improvement, and is endemic in healthcare delivery in every country, especially in the United States, because of the way that services are organized and paid for.

Value for patients improves when equivalent outcomes are achieved at a lower cost, or better outcomes are achieved at comparable or lower cost. Yet outcomes and costs are not independent. A powerful lever to reduce costs is to improve outcomes, such as through early detection that limits the complexity of care, less invasive treatment, faster recovery, or less need for subsequent care.

The power of quality improvement to drive down costs is greater in health care than any other industry I have encountered, because of the basic truth that better health is inherently less expensive than poor health. Access to health care is a basic goal of any healthcare system, but access per se does not constitute value.

Access provides the opportunity for value to be created by the delivery system, but is not in and of itself the goal. If outcomes were universally measured, it would quickly become clear that the value of care is highly variable, even for patients with access. Improving value holds the key to expanding access to care in a way that is affordable. Equity in health care for all individuals and groups is another desirable goal, but again equity itself is not value.

Equitable care that is poorly delivered leads to a system in which everyone has equal access to suboptimal outcomes. Discussions of equity also tend to focus on inputs, not outputs. The best way to improve the equity of care, and perhaps the only way, is to measure value, ensure transparency of value, and reward value. Only in this way will the value delivered for every patient count, including individuals who are currently poorly served. Value in healthcare delivery is largely unmeasured, a striking fact about healthcare delivery not only in the United States but around the world.

Failure to measure value is the most serious self-inflicted wound of the medical profession and the broader provider community, because it has slowed innovation and brought about micromanagement of physician practice. Measuring value depends first and foremost on properly measuring health outcomes.

Patients have some initial or preexisting conditions. Services are delivered through processes of care delivery that reflect medical knowledge and are affected by patient initial conditions. The care delivery process should strongly influence the outcomes achieved. Measuring value in health care.

Some of the current challenges in measuring value are highlighted by Figure First, there is a great deal of confusion about the distinction between processes and outcomes. Many participants in the healthcare system, and most quality measurement systems in health care, confound processes and outcomes or treat processes and structures as if they were outcomes. While structural factors, protocols, guidelines, and practice standards are partial predictors of outcomes, they are not outcomes themselves Brook et al.

Adherence to these types of measures is an imperfect indicator of outcomes. Process guidelines are invariably incomplete and omit important influences on the value of care Krumholz et al.

Practice standards often fail to adapt care sufficiently to individual patient circumstances—standardized processes do not guarantee standardized outcomes.

Experience also shows that providers following identical guidelines achieve different results. Process guidelines also fail to cover the full cycle of care that actually determines value.

Thus, process measurement alone will not assure that results will improve for all patients. Moreover, process guidelines can slow innovation, because agreeing on guidelines is inevitably slow and invariably political. Medicine is constantly being refined, and guidelines can lag best practice or, conversely, lead to undue attention to processes that have yet to be definitively proven with a sufficient body of evidence.

For example, best practice in treatment of post-menopausal women with estrogen has changed several times in the last decade alone, as new evidence has become available about the risks and benefits of the treatment for particular patient subpopulations. Process control alone, then, is a risky and ultimately flawed approach to improving outcomes and increasing patient value.

In any complex system, attempting to control behavior without measuring results will tend to limit progress to incremental improvement.

Without a feedback loop involving the actual outcomes achieved, providers are denied the information they need to learn and to improve their care delivery methods. Process control is a tempting shortcut because processes are easier to measure and less controversial than outcomes, but there is no substitute for measuring both Birkmeyer et al. Another important distinction is that between health indicators and levels outcomes as shown in Figure Indicators, such as hemoglobin A 1c used in diabetes care as biological markers of blood sugar control, should be highly correlated with actual outcomes such as acute episodes and complications de Lissovoy et al.

However, such biological indicators are still predictors of results, not results themselves. To improve value in healthcare delivery, it will also be necessary to measure true outcomes and not rely solely or even predominantly on such indicators. Figure also includes patient compliance as an essential factor contributing to health outcomes. There is compelling evidence that patient compliance with recommended preventive measures, preparations for treatment e.

Yet there is a glaring absence of systematic measurement of patient compliance, a major gap in measurement. Focusing on adherence to provider practice guidelines without measuring compliance merely obscures the link between process and outcomes.

Failing to measure compliance also absolves providers and health plans of responsibility to treat compliance as integral to care delivery. There has been growing attention to patient satisfaction in health care, but sometimes in a way that obscures true value measurement. Figure separates two roles of patient satisfaction in measurement: patient satisfaction with the process of care including hospitality, amenities, etc.

There has been a tendency to rely too heavily on patient surveys in quality improvement programs, and surveys have focused mostly on the service experience. These surveys rarely cover patient compliance, a major gap. Many surveys also fail to address what is most important for value measurement, the actual health outcomes as perceived by the patient. While the service experience can be important to good outcomes, it is the outcomes themselves that constitute value. In the absence of true results measurement, patients will tend to default to friendliness, convenience, and amenities as proxies for excellence in healthcare delivery.

Providers cannot rely too heavily on service satisfaction surveys as measures of outcomes, or the value delivered. An important corollary to defining the value proposition in health care is the definition of quality. In health care, the whole notion of quality has become a source of confusion and sometimes a distraction from genuine value improvement.

Quality ought to refer to patient outcomes. Quality relative to cost determines value in health care, as it does in any field. In health care, however, most quality initiatives are focused on processes of care and compliance with evidence-based guidelines. For example, of the 71 Healthcare Effectiveness Data and Information Set measures, the most widely used quality measurement system, only six are outcomes or health indicators and the balance are process measures.

Of the comprehensive collection of quality measures found in the National Quality Measures Clearinghouse, the overwhelming majority are not outcomes AHRQ, The quality movement in health care is on a dangerous path by trying to measure and control physician practice directly, rather than measuring outcomes.

While outcome measurement is difficult, process measurement is not a substitute. There has also been a tendency to equate safety and quality. The proliferation of safety initiatives is laudable, and has produced genuine improvements for patients.

However, safety is just one aspect of quality and not necessarily the most important aspect. To say it another way, doing no harm is important, but improving the degree of recovery or the sustainability of recovery are just as important, if not more so. As I will discuss below, too much focus on safety instead of overall outcomes and value may lead to incremental process improvements affecting safety, rather than rethinking the overall delivery of care to improve total outcomes including safety.

To understand value in any field, the unit for which value is measured should conform to the unit in which value is actually created. The unit of value creation should define organizational boundaries in care delivery, which is a central tenet of organizational theory. In health care, however, both measurement and organizational structure are misaligned with value creation. In fact, one of the principal reasons why value is mismeasured in health care, or not measured at all, stems from faulty organizational structures for healthcare delivery.

A medical condition is an interrelated set of patient medical circumstances best addressed in an integrated way. Care for a medical condition, such as breast cancer, diabetes, inflammatory bowel disease, asthma, or congestive heart failure, will normally require the involvement of multiple specialties.

The definition of a medical condition includes the most common co-occurrences , or diseases that occur together. Caring for the medical condition of diabetes, for example, needs to integrate the care for hypertension and vascular disease. The unit of value creation in health care delivery—care for a medical condition encompassing the cycle of care—collides with the way delivery is currently organized in the United States and in virtually every other country.

Health care today is organized by facility e. This means that both outcomes and processes tend to be mismeasured. Also, faulty organization of care creates many hurdles to actually achieving excellent outcomes. Measurement today usually focuses on the individual providers or specialists, despite the fact that the intervention of one provider is not the sole or even the primary determinant of the overall outcomes. Measurement focuses on the discrete intervention, despite the fact that the intervention is one of many that determine outcomes.

Measurement covers short episodes, which tells an incomplete story in understanding the overall outcome. Outcomes from a few discrete interventions, or in a few medical conditions, tend to be used as proxies for the overall outcomes of the provider.

Current organizational structure in healthcare delivery makes it difficult to measure value correctly. Indeed, this is one of the most important reasons why it is poorly measured, or not measured at all. Providers, particularly, have a tendency to measure only what is under their direct control in a particular intervention, even if this is not what actually determines value. What is measured is what is easy to measure, rather than what matters for outcomes.

What is measured is also what is billed, even though the unit of reimbursement is misaligned with overall value.

Gathering long-term, longitudinal data on outcomes is surely challenging, but the cost of doing so is unnecessarily high because of the current organizational structures and practice patterns. If practice structures were realigned to cover the care cycle, the cost of long-term outcome measurement would fall dramatically. Moreover, the assumption of joint responsibility for outcomes would be natural. All these observations also apply to measuring costs. To understand the true costs of heath care delivery, one must measure the costs of all the interventions and services involved in determining the outcome.

Today each unit or department is seen as a separate revenue or cost center; no one measures the cost of the entire care cycle. Entities such as rehabilitation centers and counseling units are all but ignored in cost analysis. Many costs, such as those borne by the patient or within primary care practices, are not counted in measuring procedure-centric care. Treating drugs as a separate cost, for example, only obscures the overall value of care.

All costs must be included to measure the total cost of delivering outcomes, and overall value. While the unit of value creation is the medical condition over the cycle of care, a given patient may have multiple medical conditions. This often occurs, for example, in older patients who might have congestive heart failure and breast cancer and osteoarthritis of the hip.

Such patients are best cared for by integrated practices for each condition that coordinate with each other. Value is best measured for each medical condition, with the presence of other medical conditions a risk factor in each one. The alternative, defining a different measure of value for each patient, defeats the whole purpose of measurement.

Outcomes are the core of value in healthcare delivery. There is growing attention to measuring outcomes, which is a most welcome development. However, the practice of outcome measurement suffers from a number of problems. One of these is a tendency to look for a single ideal outcome measure for a given medical condition.

However, there is never one outcome measure in any field or endeavor, and health care is no exception. For every medical condition, there are multiple outcomes that collectively define patient value.

One commonly measured outcome is survival or death. This is just one outcome, albeit an important one. Outcomes related to safety, such as the incidence of medical errors along with their consequences, are an additional type of outcome measure. To think holistically about outcome measurement for a medical condition, outcomes can be can be conceptualized in a hierarchy, with the most fundamental outcomes, survival and patient health, achieved at the top, and other outcomes arrayed in a natural progression, such as those related to the nature and speed of the recovery process and those related to the sustainability of the results.

Although there is not time to explore the details in this discussion, it should be possible to characterize the set of outcomes for a medical condition in a fashion that lends to objective and quantitative outcome measurement.

For many patients, trade-offs may exist among individual outcomes. For example, a more complete recovery could require treatment with a greater risk of care-induced illness. Or, more complete recovery could require treatment that is more discomforting. Where there are trade-offs, individual patients may differ in the weight they place on different levels of the hierarchy, and on specific measures. The discomfort of treatment willingly endured will be affected, for example, by the degree and sustainability of health achieved.

For example, cosmetic considerations may weigh heavily against risk of recurrence, such as in the choice of the amount of the breast resected for breast cancer patients, or long-term sustainability of recovery may matter less to older patients.

A complete understanding of all aspects of such an outcome hierarchy matters more, not less, when different groups of patients value individual outcomes differently. Thus, the first step to a systematic approach to value improvement is a disciplined approach to defining and describing the total set of outcomes. In most fields, including medicine, progress in improving value is iterative and evolving.

Excellent performance on one quality attribute leads to attention on improving others although improvements may also occur simultaneously.

Over time, innovations seek to relax trade-offs among quality dimensions. In healthcare delivery, the concept of an outcome measures hierarchy emphasizes that progress can be made at different rates at different levels. As survival rates improve, for example, more attention can be focused on the speed and discomfort of treatment. Once effectiveness in recovery reaches an acceptable level, attention can shift to relaxing trade-offs between effectiveness and risk of complications, as in cancer therapy.

By measuring the entire outcome hierarchy, such improvement is not only encouraged but made more transparent and systematic. And viewing outcomes in a hierarchy reveals opportunities for dramatic value improvements in existing therapies as well as in the development of more cost-effective therapies that address disease earlier in the causal chain. This is a potential source of great optimism for the future in terms of cost containment.

If we posit a hierarchy of outcome measures for a medical condition, this raises the question of how the importance of each one should be determined. These are important questions, which can easily derail outcome measurement. They have led to the effort to monetize outcomes by, for example, calculating the value of human life or measuring the monetary benefits of improved productivity. If outcomes can be monetized, they can be aggregated and directly compared to costs to determine benefit-cost of value.

Seeking to monetize individual outcomes is tempting, but unnecessary and even misleading and distracting in value measurement. Monetizing even tangible outcomes such as improved survival is fraught with complexity, and often arbitrary. Monetizing more subjective or intangible outcomes is problematic.

How should less arduous or less discomforting treatment be monetized? How should cosmetic or appearance improvements be valued? With multiple outcomes, as we have noted, the value and weights will also vary by patient.

Attempting to calculate a single aggregate outcome measure for all patients, or for each patient, is not the right approach to outcome measurement, at least given the current state of practice. Instead, the focus should be on improving the set of outcomes and value in the sense that some outcomes improve without sacrificing others. For this purpose, outcomes need not be monetized, and individual outcome measures need not be aggregated. Similarly, factoring initial health state into outcome measurement is an important issue.

For healthcare production efficiency on the EF curve in Quadrant IV, there are two ways to evaluate efficiency: efficient resource allocation and efficiency of technological development to deliver healthcare services.

The RE in this quadrant indicates the reimbursement rate of the government to healthcare service providers. A rise in RE rotates this line toward the HC axes thus making it a steeper line. Quadrant II shows that a more health-educated individual needs less government subsidy.

The subsidy correspondingly declines from GS1 to GS2, because people with a higher level of education tend to lead healthier life styles. Better health-educated people utilize health and other market inputs, and their own time to produce a greater health output. This increase would greatly benefit the society. Another critical rationale on Figure 1 , a decrease in income level would pivot the health status curve H from H Y1 to H Y2. This situation is analogous to an increase in income tax.

After careful cleaning and application of age constraints e. The previous discussion in Theoretical Framework: Diagrammatic Presentation implies an increase in education or health education raises general health, namely health stock, in the long run.

This shift in health stock will decrease the use of healthcare services, thus reducing healthcare costs. We used statistics method of ordinary least squares and paired its results with the elasticity concept in health economic theory. We also evaluated the effect of education on physician visits. The results are consistent with our theoretical hypothesis, which is presented in Figure 1. This income decrease also increases the number of physician visits per year by Estimates show that, in an optimal case, a healthy person visits their physician once or twice per year.

The concentration index [CI] is implemented in this study to measure health inequality The index ranges between 0 and 1. A low index indicates more equality or equal distribution, while a high index indicates more disparity or unequal distribution.

Our results show that the financial burden of healthcare falls disproportionately on the unhealthy segment of the population, i. Limited health knowledge is an enormous cost burden on government healthcare systems and increases the risk of errors in medication, patient compliance, and treatment.

Healthcare financing has a significant impact on health inequality. It is imperative to develop a public healthcare financing system for the population that promotes equality. A recent increase in healthcare costs can be traced to an increase in access disparity.

It is already known that worsening economic factors such as decreasing income are debilitating for the health of population.

The education variable in this study supports the hypothesis that formal and informal health education will lead to a more healthy population in the long run.

In the short run, government led preventive care is a viable option that should be explored. It is essential for policy makers to make healthcare more affordable and accessible in order to reduce general healthcare inequality and lessen the overall healthcare-cost burden. The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

The views presented here are those of the authors and do not necessarily represent those of the funding agency nor those of their affiliated institutions. Health disparities and health equity: the issue is justice. Am J Public Health — Krieger N. Methods for the scientific study of discrimination and health: an ecosocial approach. Census Bureau Google Scholar. Ettner SL. New evidence on the relationship between income and health.

J Health Econ 15 — Wildman J. The impact of income inequality on individual and societal health: absolute income, relative income and statistical artefacts. Health Econ 10 — Equity in health and health care: the Chinese experience. Soc Sci Med 49 — Access disparity and health inequality of the elderly: unmet needs and delays healthcare.

Challenges of health measurement in studies of health disparities. Soc Sci Med — Health information and the demand for preventive care among the elderly in Taiwan.

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A chief executive officer shared that he honestly could not assess how much, if any, of a consumer impact there might be due to current levels of skepticism about the utility of price transparency shopping tools.

He noted recent research suggesting that, even if granted more information, people are not very good shoppers of healthcare services. Participants noted that this reluctance from healthcare consumers might change over time and that healthcare organizations need to focus on educating and supporting consumer acceptance and usage of price transparency tools.

He suggested that the focus would be more about bipartisan issues as opposed to those demanding substantive partisan agreement. Drug pricing was noted as one bipartisan issue that may see some change.

Another area of the discussion centered on the permanency of policies that were temporarily reversed over the last year during the course of the pandemic. Policy extensions for things that probably should have been fixed long ago, telehealth for example which took a pandemic to shine a light on, would likely be made permanent.

Ferris noted how open enrollment for individual markets had been extended and that eligibility for and levels of subsidies provided to individual members using ACA marketplaces has been expanded over the last year.

Ferris queried participants as to whether those policies might be made permanent and what impact might result from reverting back to previous subsidy determinations as compared to the current environment where a million new individuals have enrolled into the ACA Marketplace. Open enrollment policies were raised by one attendee as conditional based on employment levels and likely influenced by state-level needs and policy determinations.

While one participant noted the potential for more permanent changes to eligibility for subsidies and the level of subsidies, that participant also noted that subsidies related to COBRA coverage would likely not be made permanent because COBRA is directly impacted by the dynamics regarding unemployment and the need for coverage extension.

Given mid-year changes to open enrollment periods and subsidy levels, a high degree of uncertainty as to what health plan populations look like can exist — all while health plans are building packages for the next benefit year. A number of areas were identified as top of mind for both health systems and health plans and ripe for new regulations and development of formal policies:.

One participant noted that the entry of non-traditional market participants like Amazon are just the results of not addressing the cost of care through the ACA over the last decade. And certainly for Ferris asked panelists what they see as the role of technology in addressing policy changes and how technology will make an impact beyond the ACA — to consumers, providers, health plans, payers, and hospitals.

That model is tough to scale and so clinicians are best focused on high clinical acuity and complex care. And that includes leveraging remote patient monitoring capability, wearables, Etc. And so right now for a commercial line of business, you can do, for example, digital coaching and get reimbursed for it.

So, I think, as it becomes more commonplace in the commercial market in evolution it will be more common in government programs. I think technology is going to reinvent the shopping experience in healthcare for both obtaining health insurance as well as care delivery.

If we wonder what technology should do, we have to realize that Amazon is a technology company that brought the store to the house. And Netflix is a technology solution.

And Uber is a technology solution. Value in any field must be defined around the customer, not the supplier. Value must also be measured by outputs, not inputs.

Hence it is patient health results that matter, not the volume of services delivered. But all outcomes are achieved at some cost.

Therefore, the proper objective is the value of health care delivery, or the patient health outcomes achieved relative to the total cost inputs of attaining those outcomes. Efficiency, as well as other objectives such as safety, are subsumed by value. Health outcomes refer to the set of objective outcomes, not just patient perceptions of outcomes which can be biased toward the service experience.

There is not just one outcome of care for any health condition, but multiple outcomes that jointly constitute value. Patient circumstances and preferences will affect the weighting of these outcomes to some degree, a subject discussed later. The costs of achieving outcomes refers to the total costs involved in care, not just the costs borne by any one actor or for any particular treatment or episode.

The mismeasurement of costs works against true value improvement, and is endemic in healthcare delivery in every country, especially in the United States, because of the way that services are organized and paid for.

Value for patients improves when equivalent outcomes are achieved at a lower cost, or better outcomes are achieved at comparable or lower cost. Yet outcomes and costs are not independent. A powerful lever to reduce costs is to improve outcomes, such as through early detection that limits the complexity of care, less invasive treatment, faster recovery, or less need for subsequent care. The power of quality improvement to drive down costs is greater in health care than any other industry I have encountered, because of the basic truth that better health is inherently less expensive than poor health.

Access to health care is a basic goal of any healthcare system, but access per se does not constitute value. Access provides the opportunity for value to be created by the delivery system, but is not in and of itself the goal. If outcomes were universally measured, it would quickly become clear that the value of care is highly variable, even for patients with access.

Improving value holds the key to expanding access to care in a way that is affordable. Equity in health care for all individuals and groups is another desirable goal, but again equity itself is not value. Equitable care that is poorly delivered leads to a system in which everyone has equal access to suboptimal outcomes. Discussions of equity also tend to focus on inputs, not outputs. The best way to improve the equity of care, and perhaps the only way, is to measure value, ensure transparency of value, and reward value.

Only in this way will the value delivered for every patient count, including individuals who are currently poorly served. Value in healthcare delivery is largely unmeasured, a striking fact about healthcare delivery not only in the United States but around the world.

Failure to measure value is the most serious self-inflicted wound of the medical profession and the broader provider community, because it has slowed innovation and brought about micromanagement of physician practice. Measuring value depends first and foremost on properly measuring health outcomes.

Patients have some initial or preexisting conditions. Services are delivered through processes of care delivery that reflect medical knowledge and are affected by patient initial conditions.

The care delivery process should strongly influence the outcomes achieved. Measuring value in health care. Some of the current challenges in measuring value are highlighted by Figure First, there is a great deal of confusion about the distinction between processes and outcomes. Many participants in the healthcare system, and most quality measurement systems in health care, confound processes and outcomes or treat processes and structures as if they were outcomes.

While structural factors, protocols, guidelines, and practice standards are partial predictors of outcomes, they are not outcomes themselves Brook et al.

Adherence to these types of measures is an imperfect indicator of outcomes. Process guidelines are invariably incomplete and omit important influences on the value of care Krumholz et al.

Practice standards often fail to adapt care sufficiently to individual patient circumstances—standardized processes do not guarantee standardized outcomes. Experience also shows that providers following identical guidelines achieve different results.

Process guidelines also fail to cover the full cycle of care that actually determines value. Thus, process measurement alone will not assure that results will improve for all patients.

Moreover, process guidelines can slow innovation, because agreeing on guidelines is inevitably slow and invariably political. Medicine is constantly being refined, and guidelines can lag best practice or, conversely, lead to undue attention to processes that have yet to be definitively proven with a sufficient body of evidence.

For example, best practice in treatment of post-menopausal women with estrogen has changed several times in the last decade alone, as new evidence has become available about the risks and benefits of the treatment for particular patient subpopulations. Process control alone, then, is a risky and ultimately flawed approach to improving outcomes and increasing patient value. In any complex system, attempting to control behavior without measuring results will tend to limit progress to incremental improvement.

Without a feedback loop involving the actual outcomes achieved, providers are denied the information they need to learn and to improve their care delivery methods. Process control is a tempting shortcut because processes are easier to measure and less controversial than outcomes, but there is no substitute for measuring both Birkmeyer et al.

Another important distinction is that between health indicators and levels outcomes as shown in Figure Indicators, such as hemoglobin A 1c used in diabetes care as biological markers of blood sugar control, should be highly correlated with actual outcomes such as acute episodes and complications de Lissovoy et al. However, such biological indicators are still predictors of results, not results themselves. To improve value in healthcare delivery, it will also be necessary to measure true outcomes and not rely solely or even predominantly on such indicators.

Figure also includes patient compliance as an essential factor contributing to health outcomes. There is compelling evidence that patient compliance with recommended preventive measures, preparations for treatment e. Yet there is a glaring absence of systematic measurement of patient compliance, a major gap in measurement. Focusing on adherence to provider practice guidelines without measuring compliance merely obscures the link between process and outcomes.

Failing to measure compliance also absolves providers and health plans of responsibility to treat compliance as integral to care delivery. There has been growing attention to patient satisfaction in health care, but sometimes in a way that obscures true value measurement.

Figure separates two roles of patient satisfaction in measurement: patient satisfaction with the process of care including hospitality, amenities, etc. There has been a tendency to rely too heavily on patient surveys in quality improvement programs, and surveys have focused mostly on the service experience. These surveys rarely cover patient compliance, a major gap. Many surveys also fail to address what is most important for value measurement, the actual health outcomes as perceived by the patient.

While the service experience can be important to good outcomes, it is the outcomes themselves that constitute value. In the absence of true results measurement, patients will tend to default to friendliness, convenience, and amenities as proxies for excellence in healthcare delivery. Providers cannot rely too heavily on service satisfaction surveys as measures of outcomes, or the value delivered.

An important corollary to defining the value proposition in health care is the definition of quality. In health care, the whole notion of quality has become a source of confusion and sometimes a distraction from genuine value improvement. Quality ought to refer to patient outcomes. Quality relative to cost determines value in health care, as it does in any field. In health care, however, most quality initiatives are focused on processes of care and compliance with evidence-based guidelines.

For example, of the 71 Healthcare Effectiveness Data and Information Set measures, the most widely used quality measurement system, only six are outcomes or health indicators and the balance are process measures. Of the comprehensive collection of quality measures found in the National Quality Measures Clearinghouse, the overwhelming majority are not outcomes AHRQ, The quality movement in health care is on a dangerous path by trying to measure and control physician practice directly, rather than measuring outcomes.

While outcome measurement is difficult, process measurement is not a substitute. There has also been a tendency to equate safety and quality. The proliferation of safety initiatives is laudable, and has produced genuine improvements for patients. However, safety is just one aspect of quality and not necessarily the most important aspect.

To say it another way, doing no harm is important, but improving the degree of recovery or the sustainability of recovery are just as important, if not more so. As I will discuss below, too much focus on safety instead of overall outcomes and value may lead to incremental process improvements affecting safety, rather than rethinking the overall delivery of care to improve total outcomes including safety.

To understand value in any field, the unit for which value is measured should conform to the unit in which value is actually created. The unit of value creation should define organizational boundaries in care delivery, which is a central tenet of organizational theory. In health care, however, both measurement and organizational structure are misaligned with value creation.

In fact, one of the principal reasons why value is mismeasured in health care, or not measured at all, stems from faulty organizational structures for healthcare delivery. A medical condition is an interrelated set of patient medical circumstances best addressed in an integrated way. Care for a medical condition, such as breast cancer, diabetes, inflammatory bowel disease, asthma, or congestive heart failure, will normally require the involvement of multiple specialties.

The definition of a medical condition includes the most common co-occurrences , or diseases that occur together. Caring for the medical condition of diabetes, for example, needs to integrate the care for hypertension and vascular disease. The unit of value creation in health care delivery—care for a medical condition encompassing the cycle of care—collides with the way delivery is currently organized in the United States and in virtually every other country. Health care today is organized by facility e.

This means that both outcomes and processes tend to be mismeasured. Also, faulty organization of care creates many hurdles to actually achieving excellent outcomes. Measurement today usually focuses on the individual providers or specialists, despite the fact that the intervention of one provider is not the sole or even the primary determinant of the overall outcomes.

Measurement focuses on the discrete intervention, despite the fact that the intervention is one of many that determine outcomes. Measurement covers short episodes, which tells an incomplete story in understanding the overall outcome. Outcomes from a few discrete interventions, or in a few medical conditions, tend to be used as proxies for the overall outcomes of the provider. Current organizational structure in healthcare delivery makes it difficult to measure value correctly.

Indeed, this is one of the most important reasons why it is poorly measured, or not measured at all. Providers, particularly, have a tendency to measure only what is under their direct control in a particular intervention, even if this is not what actually determines value. What is measured is what is easy to measure, rather than what matters for outcomes.

What is measured is also what is billed, even though the unit of reimbursement is misaligned with overall value. Gathering long-term, longitudinal data on outcomes is surely challenging, but the cost of doing so is unnecessarily high because of the current organizational structures and practice patterns.

If practice structures were realigned to cover the care cycle, the cost of long-term outcome measurement would fall dramatically.

Moreover, the assumption of joint responsibility for outcomes would be natural. All these observations also apply to measuring costs. To understand the true costs of heath care delivery, one must measure the costs of all the interventions and services involved in determining the outcome. Today each unit or department is seen as a separate revenue or cost center; no one measures the cost of the entire care cycle.

Entities such as rehabilitation centers and counseling units are all but ignored in cost analysis. Many costs, such as those borne by the patient or within primary care practices, are not counted in measuring procedure-centric care. Treating drugs as a separate cost, for example, only obscures the overall value of care.

All costs must be included to measure the total cost of delivering outcomes, and overall value. While the unit of value creation is the medical condition over the cycle of care, a given patient may have multiple medical conditions. This often occurs, for example, in older patients who might have congestive heart failure and breast cancer and osteoarthritis of the hip. Such patients are best cared for by integrated practices for each condition that coordinate with each other.

Value is best measured for each medical condition, with the presence of other medical conditions a risk factor in each one. The alternative, defining a different measure of value for each patient, defeats the whole purpose of measurement. Outcomes are the core of value in healthcare delivery. There is growing attention to measuring outcomes, which is a most welcome development. However, the practice of outcome measurement suffers from a number of problems.

One of these is a tendency to look for a single ideal outcome measure for a given medical condition. However, there is never one outcome measure in any field or endeavor, and health care is no exception. For every medical condition, there are multiple outcomes that collectively define patient value.

One commonly measured outcome is survival or death. This is just one outcome, albeit an important one. Outcomes related to safety, such as the incidence of medical errors along with their consequences, are an additional type of outcome measure. To think holistically about outcome measurement for a medical condition, outcomes can be can be conceptualized in a hierarchy, with the most fundamental outcomes, survival and patient health, achieved at the top, and other outcomes arrayed in a natural progression, such as those related to the nature and speed of the recovery process and those related to the sustainability of the results.

Although there is not time to explore the details in this discussion, it should be possible to characterize the set of outcomes for a medical condition in a fashion that lends to objective and quantitative outcome measurement. For many patients, trade-offs may exist among individual outcomes.

For example, a more complete recovery could require treatment with a greater risk of care-induced illness. Or, more complete recovery could require treatment that is more discomforting. Where there are trade-offs, individual patients may differ in the weight they place on different levels of the hierarchy, and on specific measures. The discomfort of treatment willingly endured will be affected, for example, by the degree and sustainability of health achieved.

For example, cosmetic considerations may weigh heavily against risk of recurrence, such as in the choice of the amount of the breast resected for breast cancer patients, or long-term sustainability of recovery may matter less to older patients.

A complete understanding of all aspects of such an outcome hierarchy matters more, not less, when different groups of patients value individual outcomes differently. Thus, the first step to a systematic approach to value improvement is a disciplined approach to defining and describing the total set of outcomes.

In most fields, including medicine, progress in improving value is iterative and evolving. Excellent performance on one quality attribute leads to attention on improving others although improvements may also occur simultaneously. Over time, innovations seek to relax trade-offs among quality dimensions.

In healthcare delivery, the concept of an outcome measures hierarchy emphasizes that progress can be made at different rates at different levels. As survival rates improve, for example, more attention can be focused on the speed and discomfort of treatment. Once effectiveness in recovery reaches an acceptable level, attention can shift to relaxing trade-offs between effectiveness and risk of complications, as in cancer therapy. By measuring the entire outcome hierarchy, such improvement is not only encouraged but made more transparent and systematic.

And viewing outcomes in a hierarchy reveals opportunities for dramatic value improvements in existing therapies as well as in the development of more cost-effective therapies that address disease earlier in the causal chain.

This is a potential source of great optimism for the future in terms of cost containment. If we posit a hierarchy of outcome measures for a medical condition, this raises the question of how the importance of each one should be determined.

These are important questions, which can easily derail outcome measurement. They have led to the effort to monetize outcomes by, for example, calculating the value of human life or measuring the monetary benefits of improved productivity.

If outcomes can be monetized, they can be aggregated and directly compared to costs to determine benefit-cost of value. Seeking to monetize individual outcomes is tempting, but unnecessary and even misleading and distracting in value measurement. Monetizing even tangible outcomes such as improved survival is fraught with complexity, and often arbitrary.

Monetizing more subjective or intangible outcomes is problematic. How should less arduous or less discomforting treatment be monetized? How should cosmetic or appearance improvements be valued? With multiple outcomes, as we have noted, the value and weights will also vary by patient. Attempting to calculate a single aggregate outcome measure for all patients, or for each patient, is not the right approach to outcome measurement, at least given the current state of practice.

Instead, the focus should be on improving the set of outcomes and value in the sense that some outcomes improve without sacrificing others. For this purpose, outcomes need not be monetized, and individual outcome measures need not be aggregated.

Similarly, factoring initial health state into outcome measurement is an important issue. Several efforts to gather and report outcomes have failed because inadequate risk adjustment led to resistance and rejection by the medical community Porter and Teisberg, Even in its current imperfect state, however, getting on with understanding the relevant initial conditions and adjusting for them is essential to improving value itself.

For example, the lack of case adjustment methods is a root cause of the underpayment of providers for more complex cases, both in the United States and elsewhere. Finally, the task of appropriately measuring costs requires close attention. Cost measurement needs to follow some essential principles, including: measuring the full costs of care, not the portion of costs borne by any one actor or the portion of costs taking any one form e. Value must be the fundamental goal of any healthcare system.

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