Pay For Value In Healthcare

Decent Essays
Historically, the pricing of medicine has not been defined by the value it brings. On the provider side, whether the provider is a facility such as a hospital, or a person such as a doctor, payment is based on delivering a service regardless of the outcome of that service. Unless there is a guarantee, we pay for numerous services in the same way. If my air conditioner breaks down, regardless if they can fix it or not, I pay for service technicians to repair the damage. If I receive an unsatisfactory haircut and do not like the results, I pay for the service, however, in the future, I will take my business somewhere else.. As I try to think of an analogous model for “pay for value”, a comparable example is the airline industry. Baring an “act…show more content…
Currently, we have not defined what that value is, nor to whom receives that value. For instance, is the value living longer, a lower per unit cost to a payer, or some other defined outcome? In addition, is it an individual value or a societal value? Especially in healthcare, these are all extremely difficult questions to answer.. Value has been explained as having three components, quality, cost, and service. However, as a society, we still need to spend time defining “the who”.. If I think of the value as an individual, the metrics might be Healthy Days as the quality indicator, a net promotor score as the service indicator, and total cost to me as the cost measurement. Yet, if I think about the value from a societal perspective, the metrics might be different. For instance, Healthy Days may still be the quality indicator and net promotor score might be for service, but the cost, taking into account Quality Adjusted Life Years might be a different number. If the value deemed is for the payer of the risk, the metrics will look completely different. In this situation, quality would be a measure of something more finite related around a disease indicator, and service might be the same, or it could be an indicator of activation or engagement, and the cost would be the total cost of care held by the risk bearer. Therefore, there could be multiple combinations of the
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