What is the definition of value in healthcare? In a previous post, we talked about how the U.S. healthcare system is transitioning from a fee-for-service to a pay-for-performance system. Central to this transition is the concept of value in healthcare. To expand on this, we recently discussed the evolving healthcare landscape with a panel of healthcare providers; we specifically asked how their organizations are changing their approach to delivering value to the communities they serve. These panelists delivered a wealth of strategies for serving patients and communities effectively under the new value-based business paradigm. Here are a few key takeaways:
3 Strategies for Defining Value in Healthcare
Dr. William Mayfield, Chief Surgical Officer at WellStar Health System, discussed how the rapid acceleration of surgical expenses combined with the reduction in reimbursements by the government and private payers has put downward pressure on hospital profit margins. Given that surgical services traditionally have driven profitability in healthcare systems, this is a new challenge for providers who are now forced to change how they partner with suppliers. During the panel, we discussed how other health systems are evolving to meet this challenge
Betty Jo Rocchio, Vice President of Perioperative Performance Acceleration at Mercy Health, defined value as providing the best outcomes for the patient at the lowest possible cost. To reflect this, her institution has moved away from a supply focus toward patient needs and outcomes.
Roccio looks for suppliers who demonstrate how they can help Mercy make better value decisions. Suppliers who understand how to help clients increase value – in whatever way the individual hospital or health system defines that term – will be considered true partners in delivering high-quality healthcare.
The evolving partnership between health systems and suppliers is no longer solely focused on products and sales transactions. “It's about the right supply at the right time for the right patient in the right context,” Rocchio said. Providers need to set aside the old concept of “buy more” for less in favor of forging valuable relationships with suppliers that help them meet their supply chain needs in a new, more precise way.
Although this value-focused partnership between healthcare systems and suppliers is still in its early days, our recent panel discussion shows willingness from both the provider and supplier side to work together to provide better value to patients.
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James Boye-Doe is a senior healthcare marketing leader and growth strategist, with over 15 years of experience in marketing and technology leadership roles with category-leading organizations in the healthcare, SaaS and data networking industries. Currently serving as Director, Head of US Specialty Marketing for the Minimally Invasive Therapies Group (MITG) of Medtronic, he is responsible for leading the charge to establish specialty growth platforms that increase access to care, improve patient outcomes and drive sustainable procedure growth in focus disease states.
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