pitals should be the main focus as it can trump à la carte incentives in determining whether individuals or organizations focus on volume vs. value. Additionally, Gilfillan highlights how systems approaches can produce reliable processes that minimize errors and how systems can be designed to put evidence-based knowledge in the real-time care workflow.

Anne F. Weiss and Bianca M. Freda of The Robert Wood Johnson Foundation describe the Aligning Forces for Quality (AF4Q) initiative. Active in 17 regions around the country, leadership teams of multiple stakeholders are involved in crafting performance measures, building quality improvement infrastructure, and assessing ways to better engage the public in the concept of a learning health system. The authors state that through the AF4Q initiative, the Foundation hopes to learn how to improve messaging, encourage community participation, and stimulate a learning culture.


Michael E. Chernew, M.D.
Harvard University

All stakeholders agree that the healthcare system should promote value: the amount of benefits received per dollar spent. Clinical improvements are likely the most significant benefit, but nonclinical benefits, such as reassurance, are important as well. Admittedly, benefit is in the eye of the beholder, but it is useful in this context to define benefits from a patient-centric perspective. Value calculations should use a broad definition of costs, including medical and nonmedical costs associated with care. Many tools can be used to promote value, including the design of provider payment and benefits, the focus of this paper.

The general theory of how value is created in competitive markets is straightforward. Consumers know their preferences. They face prices. They make choices. In a perfectly competitive setting, economists define the outcomes of those choices as reflecting value. This model is subject to extensions and caveats as markets deviate from perfect competition, but for the most part, it captures how market economies work.

In imperfect markets, consumers may not be making the right choices (in their diet, for example), but solutions often require more paternalism than economists typically prefer. When problems arise within such markets, private or public information is often provided to improve choice, or markets are regulated to prevent the most serious problems. But in most markets, interventions are modest, and market forces are the benchmark strategy used to generate value. The problem in health care is that for a number of reasons related to imperfect markets and the salience of health, the problems are more severe.

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