Reorienting Towards Value: a value-based approach to UHC

Summary

A value-based approach to UHC is implemented on the financing structure of the Power to the People scenario. Medical schemes as known in the private sector are eventually closed off, but may apply to become UHC funds that serve the public through a multi-payer approach to UHC. It’s assumed that at least a few schemes (most likely the largest ones) continue to exist in the form of UHC funds. Health facilities are continually improved as needed and are not necessarily accredited. Accountability is built and maintained using strong data systems and strengthened by the multi-purchaser environment which provides user choice. Purchasers compete on value. The measurement systems are crucial and require tracking of cost and outcome information per user. Measurements are the same across providers, which consist of public facilities and private providers. There is a strong emphasis on primary care, which eventually leads to a decrease in the need for hospitalisations. As with the Power to the People scenario, the public sector is improved, medical schemes in their current form are closed and OOP expenditure and corruption drop over time. Overall health costs are herded in over time as there’s a shift away from expensive hospital treatments towards cheaper preventative care.

What drives costs in this scenario?

In the conceptualisation of access to quality care for all, it front-ends the notion of quality and forces deeper thinking about what we mean by quality, how to measure quality and how to incentivise quality. Historical approaches to UHC, which focus on the access component of the conceptualisation, run the risk of orienting health care systems to volume, instead of value. This creates a longterm sustainability risk because the cost of the system increases as volumes rise. The implicit assumption is that a higher volume of service delivery leads to improved outcomes, but global research indicates that this is not true. The role of volume orientation in the South African private sector is illustrative of the risks associated with this paradigm. Research from the Lancet Global Commission on High Quality Health Systems indicates that “of the mortality amenable to healthcare, 60% is due to poor quality of care, compared to 40% due to lack of access” 18 .

Value-based approaches have a continuous improvement mindset built in – something that is lacking in the current articulation of the NHI reforms. With a value-based approach, it is less about accrediting facilities, and more about working with facilities to improve the quality of care that is delivered.

This scenario (Table 10) allows for, similar to Power to the People, a multi-payer approach to UHC. This potentially creates better bottom-up accountability, compelling purchasers to achieve greater efficiencies, which could lead to lower administrative costs and lower health expenditure over time.

Table 10: Assumptions driving costs for Reorienting Towards Value in model framework

Population served • Entire population is served although some may still opt to pay (out-of-pocket) for private providers

Revenue collection & pooling • Assumed to be the same as in Power to the People

Purchasing • Assumed to be the same as in Power to the People

Reorienting Towards Value