Finding value in healthcare

This article was written in partnership with Ziad El-Khoury, Managing Partner at  EKP Legal Counsel. 

The issue of healthcare resources outstripping demand is a concern worldwide. This is particularly the case in tax-based and socially funded systems but, no matter the payer model, the need to do more for less is present. One way of attempting to do so is ensuring that best value is achieved when purchasing healthcare products and services, and the concept of value-based healthcare is increasingly discussed. But what does this mean, and how are healthcare systems around the world looking to use value-based principles to solve funding concerns and improve the quality of outcomes achieved for patients? 

Looking closer to home, where are middle east health systems in terms of considering and adopting value-based approaches to healthcare? EKP has partnered with UK-based Hill Dickinson LLP, a law firm with experience working with clients to develop and operationalise value-based approaches. In the first of this series of articles we consider what value-based healthcare is, and how value-based healthcare approaches are developing both worldwide, and closer to both our homes.

What is value-based healthcare? 

Value-based healthcare (VBH) is an outcome focused approach in which both providers and suppliers of healthcare services and products are paid based on outcomes achieved for patients by those services and products. Providers and suppliers share the financial risk that the outcomes are accomplished. The concept of value is broad, encompassing three key elements – (i) outcomes; (ii) other stakeholder benefits; and (iii) total cost of care. It is a patient-centred approach which also aims to maximise the value to society more broadly in terms of healthcare spending. There is a broad spectrum within which value-based approaches can be used, from individual products or services purchased by a single healthcare provider to whole health and social care pathways in which multiple suppliers and providers work together to achieve best value outcomes for patients. Clearly, the complexity involved in procuring and contracting for these types of approaches increases depending on the breadth of the solution being offered.  

How are value-based approaches being adopted? 

Not surprisingly given global resource pressures, value-based approaches are being frequently discussed worldwide. However, such approaches are being used more extensively in some systems than others, including across an array of care and treatment pathways, whether in insurance based and tax / socially funded models. 

Examples include: 

• Integrated teams of providers working collaboratively to target improved outcomes for cardiac patients
• Supply of wound care products based on an assessment of the total cost of treatment, as opposed to individual units being supplied
• Value-based approaches to procuring and contracting for chronic and long-term conditions including mental health conditions and diabetes

Given the shared risk approach, value-based approaches require partnering between those supplying products and services and the providers delivering these to patients. For pathway-wide approaches, collaboration is also needed between different specialist providers and those working with patients at different levels, from primary through to secondary and tertiary care. Social care providers may also be involved, and there must also be substantial engagement with individual care givers (the doctors, nurses and other healthcare professionals involved) to assess value being achieved, and most importantly with the patients themselves to understand how they interpret the value and assess outcomes to them. Extensive good quality data on these outcomes is also needed which can be challenging to source and share.  

From a legal perspective, the process of operationalising a value-based approach involves engagement from an early stage in the procurement process to ensure that all parties involved have a clear idea of how the relationship between them can and should work. It is also imperative that the parties start discussing how results can be achieved through an appropriate contracting approach. 

In the UK, while there are examples of value-based approaches being investigated and, in some instances, adopted, the picture is mixed. The Welsh NHS has a longstanding relationship with the model - ‘Prudent Healthcare’ was a Welsh policy initiative which was developed into an ongoing approach around the principles of value-based healthcare (VBHC) as a delivery mechanism in a number of areas. The English NHS is showing increased interest, including, centrally, via its sourcing, delivery and supply organisation, NHS Supply Chain, running a number of pilots for value-based procurement approaches. Moreover, recent reforms to the structure of the NHS aimed at increasing collaboration between different bodies within healthcare systems are providing opportunities to look differently at achieving value. 

Where are KSA and UAE on value-based healthcare? 

The Ministry of Health in Saudi Arabia is closely focused on integrating a value-based approach into the healthcare system. Since the update to the Government Tender and Public Procurement Law of Saudi Arabia, the process for awarding bids is generally two staged. Bidders must submit an initial commercial proposal detailing the services and outcome that will be provided and then a second separate proposal detailing the cost. The Ministry of Health will first select the proposals with the greatest outcomes whilst then turning to the financial proposals to select a winner based on the value.  

Within the UAE, clear motivators for a shift to value-based approaches include the rapid growth in ageing population, high prevalence of chronic non-communicable disease, and the influence of increasing patient demand for more personalised care and choice. 

Moving from theory to practice - what next? 

It is fair to say that while there are many motivating factors and widespread enthusiasm for adopting value-based approaches to healthcare, the move from theory to practice is more difficult to achieve. In some parts of the world, for example the US, and some parts of Europe, the concept is better understood and initiatives well-advanced, in others, more development work is needed. Within healthcare systems there needs to be engagement between providers to consider what they can achieve through working together, and with suppliers to build trust and form relationships which can be used as a strong foundation on which to share the risk of delivering value focused patient-centred outcomes. Data sources need to be investigated, mined and built to monitor progress and support the models adopted. From the legal perspective, engagement at an early stage is required between parties to ensure that their intentions can be put into practice, develop, and work practically long term.