BOX 4-1

Value in Health Care

Patient value … is the compass that must guide the strategic and operational choices of every provider group, hospital, clinic, and physician practice

Porter and Teisberg (2006)


IOM Roundtable on Evidence-Based Medicine’s Definition of Value:


Value in health care is expressed as the physical health and sense of well-being achieved relative to the cost. This means getting the right care at the right time to the right patient for the right price…. Value in health care … depends on vantage point and circumstance. Perceived value will vary according to one’s view as a patient, caregiver, family member, neighbor, community leader, employer, health care manager, innovator, or policy official.

Sometimes the determination of value is complicated by the fact that a benefit received is the result of a cost shared or borne elsewhere. This is typical of activities in which there is advantage or necessity to arrange for pooling of resources to make it possible for groups of people to benefit…. In these cases, the gain is considered from two perspectives: the individual gain for one person’s investment and the social gain from the collective investment. Value from pooled arrangements is expressed as the aggregate gains relative to the aggregate costs.

Rewarding caregivers who deliver high-value care … should be a central goal of incentives embedded in health care financing. Accomplishing this aim will require analytic tools and capacity beyond those currently available, including development of the capacity to study relative safety and effectiveness; to inform, assess, and integrate patient preferences; to better characterize and target groups at particular risk; to understand and balance the various elements of cost; to fashion the principles needed to ensure an appropriate balance between an individual’s value proposition and that of the aggregate for a population; to systematically track the results of health care interventions; and to identify the system elements most conducive to high-value health care (IOM Roundtable on Evidence-Based Medicine, 2008).

To this committee, research related to establishing value creates actionable information about the relative benefits and costs of preventive and treatment technologies, procedures, and methods of organizing, delivering, and paying for services. Assessments of value should include measures of both individual and societal costs and benefits (quality of life, productivity) and would be useful to policy makers, payers, purchasers, providers, health care professionals, and the public.

This preeminence of value in comparing professionals and providers (individual physicians, hospitals, and the like) applies equally to comparisons of medical treatments used in treating a disease, of alternative preventive measures, or varying organizational structures for care. As Porter and Teisberg (2006) conclude, “If value for patients truly governed every provider choice, the health outcomes per dollar expended in the U.S. health care system would improve dramatically.”



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