The Value Equation: Enhancing Patient Outcomes While Constraining Costs

Abstract

INTRODUCTION The United States healthcare system continues to struggle with extremely high cost and variable quality of care. This year alone, the United States is projected to spend $2.8 trillion on healthcare, comprising approximately 18% of the entire U.S. gross domestic product. This is more than that of Australia, Brazil, Canada, China, France, Germany, Italy, Japan and the United Kingdom combined gross domestic product. This growth in cost is completely unsustainable and is threatening all aspects of the U.S. economy, as there is less to invest in infrastructure, education and other public programs. In the words of Donald Berwick, former Administrator of the Centers for Medicare and Medicaid Service (CMS) “what healthcare takes, others lose.” For individual families, healthcare premiums have doubled in the past 10 years, reducing income gains for average families and for the providers that treat them. Despite these great costs, health outcomes are no better in the United States compared to other less costly countries, including ongoing preventable morbidity and mortality. Owing to the scope, breadth and effect of the problem to U.S. citizens, the public focus on the issue is understandably growing with great intensity. What providers, patients, employers and the public alike are all yearning for is to understand, be able to measure and enhance the value of U.S. healthcare, all of which have a vested interest in improving quality and lowering cost. Healthcare value defines and measures both the quality and the actual cost of healthcare provided. The future success of the U.S. healthcare system and the U.S. economy as a whole are completely dependent on our ability to measure and improve healthcare value. Although this concept seems quite simple, understanding and measuring both quality and cost are quite complicated. This article reviews the definition of healthcare value, the types of quality outcomes currently being measured (and should be measured), how cost is currently being measured (and should be measured), programmatic attempts to improve value to date and a framework for improving value within the U.S. healthcare system.