Why VALUE is Important to Population Health?

By | August 28, 2018

“Population Health” has numerous definitions. Most commonly it is “Health outcomes of a group of individuals, including the distribution of such outcomes within the group.” The key words are “health” and “group.” At the most expansive level, the wellness of our entire society encompasses this meaning. There in deciding to define the value to include the whole community requires us also to determine what are the drivers of value? Value has a quality, service, and cost component. When we broaden the definition of quality, it encompasses both a subjective and objective component. Thus, we must analyze the value within the context of both a clinical mindset as well as how an intervention has improved my quality of life.

One such model is measuring the cost for one Quality Adjusted Life Year (QALY) and immunizations fit into this mindset. The lower the cost per QALY is associated with the concept of a valuable investment in prevention, which leads to better health and well-being of those in a defined group. As we become more adept in treating chronic conditions in a manner that focuses on prevention, our measurement of value must also shift.

Treatment of Hepatitis B is another example. If it is identified within a person, we now can eradicate the disease. In fact, a recent analysis published by Toy et al., in Health Affairs revealed that the cost per QALY is $103 (assuming the cost of medication is no higher than $114 per month). As science progresses and allows us to intervene in disease states earlier, we must also consider the value created. Unfortunately, new treatments may be prohibitively expensive in such a calculation; however, as the cost of medical care falls, the intervention may fall within an acceptable range. Thus, it is important to measure the value both with our eyes on the present, yet also into the future.

What is particularly interesting about the example above is the qualifier on the cost of treatment per month. Including this component in the conversation allows us to visualize where we may be at a given moment and can also be a goal to achieve. Solving the equation for the variable of cost per unit time is a method of defining where we need to be initially, at a given time. If we do not maintain a lens of both considerations, we run the risk of stifling innovation. This methodology allows us to create value-based pricing.

Regardless of the model implemented, measuring the value created is paramount to our improving and sustaining the health and well-being of those we serve. Addressing the complexity of the situation requires us to adapt our measurement of value to optimize our desired results.