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VBHC: 3. VBHC in Detail

3. Value-based Healthcare in Detail

The Value-based Healthcare principles

The key principles of a VBHC system aim at balancing quality, financial and process considerations [26][30][31].

In order to achieve higher value in the healthcare system, it is necessary:

  • to reduce wasteful care by basing decision-making on information
  • to ensure that healthcare providers reduce care costs while maintaining high quality
  • to provide and communicate care that patients perceive as high value
  • to aim at higher patient involvement in order to match patients’ needs
  • to follow a deeper value-based behaviour
  • to establish a stronger clinical and financial rapport
  • to keep track of all the activities conducted from start to end

The Value-based Healthcare components

Michael Porter, who introduced the definition of value in a VBHC system, developed the strategic agenda for moving to a high-value health care delivery system [32]. According to Porter, such agenda has six components.

The integrated practice units (IPUs) are teams that consist of various professionals that are responsible for the total care of a medical condition and its complications [33]. Such teams follow the patient’s wellbeing over the entire journey, minimising additional costs created by unnecessary interventions [23].

It is essential to track and measure the relevant patient data to ensure that patient outcomes are improved. Data analysis shows how outcomes have improved throughout time while linking them to incurred costs [13].

The idea is to ultimately develop bundled payments for reimbursing providers for improving patient outcomes.

Rather than directing the patient to multisite organisations where to get treatments, there is the need to integrate systems in order to eliminate the fragmentation and duplication of care, and to optimize the types of care delivered at each location.

If value is to be increased on a large scale, providers for a particular medical condition need to serve patients beyond their immediate geographic areas: they need to extend their reach through the strategic expansion of excellent IPUs. Following the VBHC principles, geographic expansion should focus on improving value and not volume.

The importance of accessing patient data through different devices owned by different stakeholders (data interoperability) is fundamental to enable VBHC [34]. An information technology platform allows the other five components to be implemented.

[13] World Economic Forum. Value in Healthcare: Accelerating the Pace of Healthcare System Transformation. Geneva, Switzerland: World Economic Forum; 2018.

[23] Michael P, Porter M. What is Value in Healthcare. New England Journal of Medicine, OBIO KANADA. 2010.

[26] Kaplan B. Use Better Measurement of Costs and Outcomes to Align the Healthcare System around value: Master Class for Healthcare Costing for Value Institute Conference Healthcare Costing for Value Institute  2015 April

[30] Porter ME, Lee TH. The strategy that will fix health care. Harvard Business Review, 2013;91(10):1-19.

[31] International Consortium for Health Outcomes Measurement [Internet]. Boston: ICHOM;2020. [citated 18 May 2020]. Available from:

[32] Porter M. What is value in health care? N Engl J Med. 2010;363(26):2477‐2481. doi:10.1056/NEJMp1011024

[33] Martin LA NC, Mountford J, Bisognano M, Nolan TW. Increasing Efficiency and Enhancing Value in Health Care: Ways to Achieve Savings in Operating Costs per Year. Cambridge, Massachusetts: Institute for Healthcare Improvement; 2009.

[34] Liebowitz S. Why health care costs too much? Cato policy analysis, no. 211. Retrieved March 14, 2010. 1994.

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