Value-based Public Policy

Imagine focusing a new policy—and the metrics used to monitor its success—not on number of people served or the percentage of costs cut but on the value created for citizens, a concept that involves both the quality of service and its cost.

This kind of value-based public policy is gaining momentum as the proliferation of new systems and capabilities in digital makes it possible to collect more data and share the information broadly with agencies and the public.

Value-based Health Care

Some of the most visible and most successful initiatives in value-based public policy have emerged in the field of health care, where the goals of higher quality and lower cost have traditionally been at odds. 

Value-based health care delivers higher-quality patient outcomes at the same or lower total cost for a given condition. Improved value in health care delivery relies on the following:

  • The detailed analysis of existing high-quality outcomes data
  • The identification of current best practices
  • The widespread dissemination of those practices to reduce unwanted variations in clinical practice and improve health outcomes 

This approach organizes a health care system—in a country, territory, or institution—around the continuous measurement of outcomes, notably the quality and safety of care. It focuses on large categories of disease states, in a systematic and sophisticated way—typically by designing and collecting data on patients’ quality of life after medical interventions such as surgeries or physical or drug therapies. This evidence allows medical teams to identify the treatments and practices proved to be the most effective and cost efficient.

The Promise of Value-Based Approaches

Value-based health care helps countries address today’s triple threat: First, the types and effectiveness of treatments can vary widely across illnesses: Not only are there disparities over whether drug or surgical treatments are chosen for the same illness, but also the effectiveness of those treatments can vary widely across physicians, regions, or countries. For example, patients with heart failure can be as much as 3 times likelier to die in one country than another.

Second, citizens’ are being more active participants in their health care regimens and are seeking greater transparency into the options and the decisions made in care selection. Third, care costs are rising steeply even as the public budgets are fallings precipitously. The rise of available data on health care and the increased sophistication of data processing represent a major opportunity, provided they are indeed used to guide operations and decisions.

Several initiatives based on this approach have been launched all over the world, for various conditions, such as cancers and heart disease. The transparency of the approach makes it possible to rally the entire medical profession—hospitals, doctors, and private practitioners—around what matters most to them: the quality and safety of care It also gives them a singular focus around which to align their interests and objectives with those of paying agencies, health care regulators, public and private health insurers, and the pharmaceutical industry.

In value-based health care systems:

  • Patients know with greater certainty which doctors and hospitals deliver better care at the same or lower cost, as well as which drugs, procedures, and devices would work best for them
  • Payers reimburse based on outcomes and push patients toward care delivery with better outcomes
  • Providers compete based on achieved medical outcomes, thereby attracting more patients, referrals, and payer support
  • Suppliers take a more holistic approach, strategically selecting where to play and what to offer to improve outcomes

The Next Level of Value

Early results in the field of health care provide two lessons on action in the public realm: First, constant measurement and reporting results in transparent outcomes, which are enough to increase the quality of care, as institutions seek to emulate the best performance. Second, the quality of care can be compared across various institutions in a country or even with international peers, and successful processes can be rolled up across departments, regions, or nations

Education, safety, and social policy (the care of vulnerable populations) are ripe for these approaches. In the field of education, for instance, issues such as high dropout rates could be more fully understood—and risk factors more easily identified—through comprehensive data capture of the incidence of dropout and the demographic and psychosocial factors. This would enable the earlier identification of students at risk. Next, continued monitoring of the programs applied and their results would determine the most effective solutions and enable the sharing of best practices across schools, regions, and nations.