When you think of “value-based health care,” what comes to mind? Is it all about cost?
It’s far from breaking news that the United States leads the pack in health spending, with an average annual spend of 17.2 percent of gross domestic product (GDP). However eye-catching that statistic may be, is the share of U.S. GDP the right measure to gauge the success of health care in this country? What about the quality of care delivered for each dollar spent? What about competition and innovation, incentivized by better results for patients, rather than simply maintaining standard of care? Ultimately, a consumer determines the value of any product by more than just cost.
As an example, in the early 2000s, a flip phone may have set you back $50 to $100. It may have been unreliable or quick to “pocket dial” one of your contacts. In general, though, the quality of the phone was commensurate with the cost. As the demand for superior phones grew, competition in the market rapidly expanded as well, leading to technological breakthroughs.
Today, the newest version of the iPhone costs $1,000 or more. If we evaluated the value of today’s iPhone compared to yesteryear’s flip phone based purely on cost, we would likely conclude that our current phone spending is out of control and unreasonable. However, if we factored in the quality of an iPhone per dollar spent, it would be difficult to argue that the quality-to-cost ratio isn’t valuable, considering its ability to match many functions of a laptop computer from your pocket. An expensive smart phone also meets the economic definition of value in the free market by having consumers willing to pay for it.
In a similar fashion, achieving value in health care is about more than simply cutting costs or accepting a higher price assuming that it translates to increased quality. Have increasing healthcare costs provided increasing value, similar to cell phones? Most would likely answer with a resounding “no.” Better stewardship of our resources, alignment of incentives, and a greater focus on patient-centered outcomes would certainly decrease healthcare spending dramatically in the United States. In most areas of human health, equivalent outcomes could be obtained at markedly reduced costs. Some areas would see greater investment in improving outcomes; however, this would be no cause for alarm if overall costs were dramatically decreased.
So, how do we define value in musculoskeletal health care? Is it purely dollars spent? Are outcomes based on anecdotes or evidence? Should it be the cost of a single procedure, the cost of treating a single condition, or an analysis of what we are getting for each dollar spent to treat a patient during the full cycle of musculoskeletal care? Can value be framed with a multifactorial, nuanced definition that allows for ease of translation from page to practice?
What does the Academy think?
When surveyed during the 2019 AAOS National Orthopaedic Leadership Conference, members of the Board of Specialty Societies (BOS) and Board of Councilors (BOC) overwhelmingly agreed (83 percent) that value should be “measured by outcomes achieved, not volume of services delivered.” Additionally, most attendees (93 percent) agreed that, in value-based health care, cost reduction is best accomplished by spending more on some services to reduce the need for others, rather than decreasing reimbursement or focusing on à la carte costs of individual services. The majority (77 percent) welcomed value-based health care, but half of those respondents felt ill-prepared for it. Most (59 percent) stated that the role of AAOS in regard to value-based health care is to help create a level playing field and equip members to compete on value so that most will benefit on behalf of their patients. Somewhat surprisingly, 39 percent of orthopaedic leaders said that the role of AAOS is to best position members to participate in highly competitive arenas regardless of “winners and losers.” A small minority (2 percent) felt that the primary role of AAOS is to protect all members, even if doing so makes us less competitive overall.
Although, in principle, there is universal agreement that the creation of value is wholly dependent on patient-centered outcomes, the perception is that many stakeholders place a disproportionate emphasis on cost as an independent variable. Musculoskeletal healthcare professionals are at the blunt end of seemingly endless interpretations and evolving definitions of “value” utilized to make reimbursement, legislative, and regulatory decisions. For most healthcare professionals, it likely appears that creating value is simply a code word for cutting costs, and when it comes to cutting costs, healthcare professionals are the easiest target.
The importance of advocating for, and on behalf of, Academy membership through the lens of member-developed definitions of “quality” and “value” is a central focus for the Academy’s new 2019–2023 Strategic Plan, initiated during the tenure of AAOS President Kristy L. Weber, MD, FAAOS. To accomplish the construction of these definitions, Robert H. Quinn, MD, led discussions with members of the AAOS BOC, BOS, and Council on Research and Quality throughout 2019 in an effort to develop and refine the key components of “quality” and “value” from the standpoint of musculoskeletal healthcare professionals. Michael Porter’s definition of value (“value is defined as health outcomes achieved per dollar spent”) served as the nucleus of the Academy’s definition of value. However, additional language and key terms specific to musculoskeletal health care were carefully included and refined to separate the definition of both “quality” and “value,” as they are often intermingled and/or used interchangeably.
During its December 2019 meeting, the Board of Directors approved the definitions of quality and value developed by the aforementioned groups, which are presented in the graphic above.
The development of standard definitions of quality and value around which AAOS membership can rally will be advantageous for leaders and members to access when interacting with external stakeholders as they relate to value-based musculoskeletal health care. Furthermore, instituting member-led definitions of quality and value into the vernacular of AAOS membership and external bodies stakes claim to the Academy’s definition of value, rather than having others define it.
Robert H. Quinn, MD, FAAOS, is chair of the AAOS Council on Research and Quality.
Jayson Murray, MA, is the director of the AAOS Department of Clinical Quality and Value.
- OECD iLibrary: Health at a Glance 2019: OECD Indicators. Available at: https://www.oecd-ilibrary.org/social-issues-migration-health/health-at-a-glance-2019_4dd50c09-en. Accessed November 19, 2019.
Porter ME: What is value in health care? N Engl J Med 2010;363:2477-81.