2 Determinants of Value: Patients’ Perspective

Chapter 2 Determinants of Value: Patients’ Perspective

Regardless of the product or services being purchased, one thing is clear— no one likes to pay for something that doesn’t work. The industry can no longer hide behind its “uniqueness” to deflect attention from the important debate regarding the value of its services. The traditional arguments offered about the complexity of healthcare services can no longer insulate the industry from scrutiny. The rising cost of healthcare services coupled with increasing copays is causing patients to question the value of what they are getting. The patient perspective of value is particularly important now, as patients are responsible for more and more of the costs of their care.

Today, more than one in four Americans report challenges paying for their medical bills, and about 79 percent of cancer patients report moderate to catastrophic financial burden related to their care. Low-income families often spend more than 20 percent of their after-tax income on out-of-pocket healthcare spending, even when enrolled in low- or no-deductible plans (Seidman et al., 2017). Patients typically ponder the following aspects of their encounter to determine the value of the healthcare services they receive:

◾ The extent to which the chief complaint was addressed or resolved ◾ The extent to which their symptoms were effectively addressed ◾ The patient’s perception of whether he/she was treated like a “whole person” ◾ The true cost of the service received ◾ How much of a hassle it was to access and receive the service

◾ Whether the service was delivered with empathy and compassion ◾ The extent to which the staff and clinicians enhanced the patient’s understanding and knowledge of his/her condition/symptoms to take better care of themselves or prevent a recurrence ◾ The extent to which other knowledgeable people would confirm the scientific validity of the treatment option provided

In certain cases, it is very difficult to measure value in the context of a short or sporadic patient encounter, that is, what a patient might express is the perception of value-as-you-go. In some cases, these assessments of value can only be made over a long time; however, patients continue to assess their experience for as long as it takes. The healthcare market behaves differently from other markets. Value in the context of clinical outcomes may require a longer assessment via a longitudinal study. The value of a healthcare service is informed by the time horizon over which its value is determined. Ideally, value should be measured over the patient’s lifetime. In practice, measurement is limited to shorter time frames due to various market factors (e.g., patients switch insurers multiple times throughout their lives, other co-morbidities, fragmented care, etc.).

Healthcare consumers lack the information necessary to make the best purchasing decisions when confronted with a health condition or crisis. Most healthcare practitioners would admit that the healthcare system is simply too complex. Healthcare decisions sometimes carry with them enormous consequences, with irremediable effects. In this regard, the healthcare marketplace does not behave like other markets. One of the profoundly enduring requirements of a functioning healthcare market is the provision that the purchasers of services will understand what they are getting.

There are several reasons why healthcare organizations need a clear definition of value. If the concept of value is to be taken seriously, the rewards, reimbursements, and incentives applied to the systems that deliver care would have to be aligned with value creation. The concept of value is meaningless unless we can accurately measure it. Some organizations erroneously measure value in terms of quantity or volume of activities performed or the process of care. Patients may not appreciate the fact that a healthcare facility or practitioner has performed so many unnecessary procedures on them. Real value should be measured in terms of clinical and service outcomes relative to costs in the context of the customers’ total, complete experience.

Another real challenge with the value proposition is that some providers tend to define and measure value in terms of the aspects of care they directly control or affect. These providers argue that the particular aspects of the services they control worked out well, stating that they do not control what the other providers do. While this might be true in certain cases, it does not address the patients’ perception of value. This is analogous to a basketball team in which a star player scores 50 points but for a losing cause. There can be no winners on a losing team! This explains why some physicians fail to accept joint responsibility for outcomes, blaming lack of control over “outside” providers involved in care, even when those providers work for the same hospital.

When organizations focus on cost reduction without regard for the associated outcomes, they make a mockery of the concept of value. According to Porter and Teisberg (2006), The proper unit for measuring value should encompass all services or activities that jointly determine success in meeting a set of patient needs. These needs are determined by the patient’s medical condition, defined as an interrelated set of medical circumstances that are best addressed in an integrated way. The definition of a medical condition includes the most common associated conditions—meaning that care for diabetes, for example, must integrate care for conditions such as hypertension, renal disease, retinal disease, and vascular disease and that value should be measured for everything included in that care.

Keckley (2015) notes that, in most industries, value as defined by consumers is associated with four attributes:

◾ Accessibility: “Can I get what I need or want from you?” ◾ Service: “Is dealing with you a pleasant experience?” ◾ Effectiveness: “Is what you’re providing going to satisfy my need or want?” ◾ Costs: “What’s the cost to me and my family, and is it worth it?”

The healthcare industry continues to offer a myriad of reasons why it cannot adopt these dimensions of value. Knowing what a test, procedure, drug, or visit costs before the service is rendered would be an important factor in the patient’s ability to assess value. If the healthcare industry is serious about its value proposition, it can make such information available to patients. Healthcare organizations can take this concept to the next level by delivering the information through the consumer’s smartphone with comparison pricing readily accessible. Most providers struggle with the concept