The Value Word

The American Journal of Pharmacy Benefits, September/October 2012, Volume 4, Issue 5

How do we define and measure value in terms of healthcare?

There is a great deal of talk about “value” in health care today. Value-based purchasing, value based-benefits, value-based contracting. There are 4 questions that come to mind when I hear the word VALUE.

• How do you define value?

• Value to whom?

• How do you measure value?

• How long do you have to wait until you see the value?

In many ways I believe that the first 2 questions need to be answered as 1. When I buy a car, the value is attributed to me because it is my money buying the car. I will also be the one that defi nes what value means. Is it the look of the car, the reliability, or maybe the gas mileage? It is a bit more confusing when it comes to healthcare. In most cases there are 2 different purchasers of the service: the employer or government entity and the healthcare consumer. Some level of value must be attributed to both “purchasers.” I was recently at a conference where a benefits director from an employer was speaking about its benefits structure. They have had a value-based benefits methodology for quite a while, although it has evolved over time. This person acknowledged that in creating their benefit design (focusing on the pharmacy benefi t), they looked fi rst to see if there was value attributed to the company. Was this medication life or organ system saving? If the answer was yes, then it was considered of value to both their employee and the company. If the answer was no, and the medication was of value to the employee only, it was still covered but not to the same degree. In this case it is only the employee (healthcare consumer) that has to define or decide what the meaning of value is to them. This seems to me to be the right way to assign and define value.

If we all agree that value is defined by the purchaser(s), the next issue that has to be addressed is how do we decide how and when to measure value. This question has come into focus due to a greater number of the drugs in the pipeline being high-cost specialty medications. Is the drug lifesaving, does it decrease healthcare spend, increase workplace productivity, or allow the healthcare consumer a better quality of life? How you measure each of these attributes will differ. Some measurements will require “hard data” such as medical claims whereas others are patient self-reported data. I believe we are relatively early in true outcomes measures and that is an area that will continue to evolve. In the meantime we have to start somewhere. Over the last number of years most of our healthcare measures were process oriented. I am often frustrated that data-driven outcomes are often treated like a piñata. Everyone likes to take a whack at it. Instead we need to look at data and outcomes as a way for us all to improve and reach a goal.

The final issue that needs addressing is the issue of time lapse from the event or service until the time that the value is recognized. This can be a more diffi cult issue to answer. The value of a glycated hemoglobin or lipid test may not be seen for years, but nonetheless, no one would question the value of these laboratory tests. Once again, the analysis of value must remain contextual.

As we look to defi ne the value of health and healthcare resources in this county we need to push aside our fear of questioning. I would argue that asking these questions and then making healthcare decisions based on the answers is not a form of rationing but in fact access to quality care for all.