336 pages · 2025
Value Management in Healthcare
How to Establish a Value Management Office to Support Value-Based Outcomes in Healthcare
By Nathan William Tierney
- Published
- February 13, 2025
- Imprint
- Productivity Press
- Edition
- 2nd Edition
- ISBN
- 9781003493556
Overview
About this book
Our current healthcare system is broken. The Organisation for Economic Co-operation and Development (OECD) predicts healthcare costs could increase from 6% to 14% of GDP by 2060. The cause of this increase is due to (1) a global aging population, (2) growing affluence, (3) rise in chronic diseases, and (4) better-informed patients, all of which raises the demand for healthcare. In 2006, Michael Porter and Elizabeth Teisberg authored the book Redefining Health Care: Creating Value-Based Competition on Results. In it, they present their analysis of the root causes plaguing the healthcare industry and make the case for why providers, suppliers, consumers, and employers should move toward a patient-centric approach that optimizes value for patients. According to Porter, "value for patients should be the overarching principle for our broken system." Given the current state of global healthcare, there is urgency to achieve widespread adoption of this new approach. The updated second edition of this book discusses two major issues driving the importance of value-based care. The first is the emergence of artificial intelligence, which has the potential to significantly impact and enhance value-based healthcare in several ways such as delivering personalized medicine, predictive analytics for patient outcomes, and improving population health management. The second issue is why value-based care continues to struggle in scaling. While value-based healthcare has shown promise in improving patient outcomes and controlling costs, there have been challenges in implementation such as transitioning from the traditional fee-for-service model, data interoperability issues, and limited standardization of health outcomes. These challenges do not necessarily mean that value-based healthcare has failed. Instead, they highlight the complexities of the work involved and the need to follow a process as provided in this book. The intent of this book is to equip all healthcare delivery organizations with a guide for putting the value-based concept into practice. With updated material and case studies, this book defines the practice of value-based healthcare as value management. The book explores Mr. Porter’s value equation (Value = Costs/Outcomes), which is central to value management, and provides a step-by-step process for how to calculate the components of this equation. On the outcomes side, the book presents the value realization framework, which translates organizational mission and strategy into a comprehensive set of performance measures and contextualizes the measures for healthcare delivery.
Subjects
Economics, Finance, Business & Industry, Health and Social Care
Inside the book
Table of contents
Select a chapter to read its abstract.
Chapter Chapter 1Executive Summary
Pages: 8
In healthcare, the overarching goal of providers, as well as other stakeholders, must be to improve value for patients. Here, value is defined as the health outcomes achieved that matter most to patients relative to the cost of achieving those outcomes. Improving value requires improving one or more outcomes without raising costs, lowering costs without compromising outcomes, or both. [1] Outcomes empower patients, clinicians, and payers and will influence the future healthcare delivery landscape in the following three distinct ways: Patients shall choose the providers for their care based on outcome value scores. Providers shall be data-informed to make targeted improvements and learn. Payers shall measure return on investment and direct patients to high-value providers. 1
Chapter Chapter 2Healthcare Landscape
Pages: 9
After reading this chapter, the reader will be able to answer the following questions: Why is it important to understand the rapidly changing healthcare landscape? What are other countries actively doing to achieve value-based healthcare standards? How will implementing a value-based approach improve outcomes while also reducing costs? What if organizations created a value management office?
Chapter Chapter 3How to Measure Value
Pages: 19
After reading this chapter, the reader will be able to answer the following questions: Why are the healthcare perspectives and outcomes on a balanced scorecard important? What is value as an equation? How does an organization link value as a program in a health outcome setting? What if each program or health information technology (IT) project had value defined from the start?
Chapter Chapter 4Value Management Office
Pages: 10
After reading this chapter, the reader will be able to answer the following questions: Why is it important for organizations to create a Value Management Office (VMO)? What is the concept, mission, and vision of a VMO? How do management dashboards and performance scorecards provide value? What if organizations do not establish a VMO?
Chapter Chapter 5Value Realization Framework
Pages: 24
After reading this chapter, the reader will be able to answer the following questions: Why is the value realization framework important to healthcare delivery organizations (HDOs)? What is the definition of a critical success factor? Key results indicator? Key performance indicator? How does an organization apply value management? How does an organization apply the value realization framework? What if an organization does not define their desired outcomes?
Chapter Chapter 6Steps in the Value Realization Framework
Pages: 47
After reading this chapter, the reader will be able to answer the following questions: Why is it important to follow a process toward defining value? What are the three outputs from Task 3: Build a hierarchy of critical success factors (CSFs)? How do key performance indicators (KPIs) help organizations? What if the success is not defined upfront?
Chapter Chapter 7Outcome Metrics
Pages: 49
After reading this chapter, the reader will be able to answer the following questions: Why is it important to measure the six perspectives of healthcare? What are the six focus areas of healthcare? How does an organization measure clinical outcomes? What if an organization does not measure patient and employee satisfaction?
Chapter Chapter 8Common Operating Picture
Pages: 22
After reading this chapter, the reader will be able to answer the following questions: Why is a common operating picture (COP) important for an organization? What are the three dimensions of the COP? How can business analytics (BA) be used to better assist the hospital assign appointments when referring a patient to physical therapy to increase patient satisfaction and reduce wait times? Why analyze population health simulations? What would happen if other factors or variances of the variable were considered?
Chapter Chapter 9Program Core Metrics
Pages: 9
After reading this chapter, the reader will be able to answer the following questions: Why are program value measurement key performance indicators for the common operating picture (COP) important? What is the role of a project management office (PMO) versus a Value Management Office (VMO)? How can the schedule performance index impact cost variance? What if the quality of a product does not meet user acceptance criteria?
Chapter Chapter 10Technical Metrics
Pages: 15
After reading this chapter, the reader will be able to answer the following questions: What is the importance of systems performance? What does information technology (IT) support performance measure? How do ISO 9126 standards influence healthcare delivery organizations (HDOs)? What if fault tolerances for an electronic health record (EHR)/electronic medical record (EMR) are not established prior to implementation?
Chapter Chapter 11Other Index Metrics
Pages: 4
After reading this chapter, the reader will be able to answer the following questions: Why consider using other metrics? What is a product portfolio index? How can a research and development (R&D) success index benefit my organization? What other index metrics can be used?
Chapter Chapter 12Change Management
Pages: 21
After reading this chapter, the reader will be able to answer the following questions: What are the most important recommendations for adopting the Value Management Office (VMO) in the organization? Why is it so important to manage the change?
Chapter Chapter 13Summary of Key Points
Pages: 2
The key points to remember from this book include the following:
Chapter Chapter 14Has Value-Based Care Failed?
Pages: 24
After reading this chapter, the reader will be able to answer the following questions: What are the primary challenges and complexities associated with transitioning from traditional fee-for-service models to value-based care in healthcare organizations? How do data interoperability issues impact the effectiveness and success of value-based care initiatives, and what are the potential solutions to address these challenges? What strategies can healthcare organizations implement to overcome patient selection bias, financial barriers, and incentive misalignments to fully realize the benefits of value-based care?
Chapter Chapter 15The Transformative Role of Artificial Intelligence (AI) in Advancing Value-Based Healthcare
Pages: 15
After reading this chapter, the reader will be able to answer the following questions: How does artificial intelligence (AI) enhance predictive analytics for risk stratification in value-based healthcare? What role does AI play in population health management and how does it contribute to preventive care? In what ways does AI contribute to personalized medicine and the development of tailored treatment plans?
Chapter Chapter 16A Father's Perspective of Type 1 Diabetes and Its Impact on His Child
Pages: 26
After reading this chapter, the reader will be able to answer the following questions: What were the key historical milestones in the understanding and treatment of Type 1 diabetes (T1D)? How did ancient civilizations contribute to the early understanding of diabetes? What are the modern technological advancements that have improved the management of T1D? What are the ongoing research areas and potential future treatments for T1D mentioned in the chapter? How can a value management approach help those with T1D and their families?
Chapter Chapter 17Reflections
Pages: 6
Thanks to the power of social collaboration, my son Sebastian achieved a desired health outcome. If it wasn't for a complete stranger, we would never have known what provider to choose. If sick, injured, diagnosed with cancer, or suffering from a chronic disease, it is the health outcome that matters most to any parent, child, or person. As people, we deserve to know a predictable outcome prior to receiving a given treatment, while also being accountable for our own behavior that may affect the outcome. Sebastian has made a full recovery and, at only 11 years old, displays empathy and kindness at a level remarkable for his age. We have watched him interact with the newest addition to our family, Indra, in a manner that makes me wonder if there was another outcome outside the physical one. He suffered through 2 years uncomfortably, in and out of doctors’ offices to the point that he still fears them, but emotionally he has calmed into an “old soul,” someone who repays kindness to his baby sister and others … without asking for anything else in return. Despite his early age, there is no doubt that my son has learned the value of selflessness. Shouldn't we all take note?