Home Perspectives & Insights Solving the Healthcare Value Equation – Part 2

Solving the Healthcare Value Equation – Part 2

Perspectives & Insights · March 2, 2022 · Comments off

May 22, 2022
Copyright 2022 – Don Gerdts. All rights reserved.

Part 2:  The Opposing Forces of Stakeholders in the Healthcare Ecosystem

While healthcare and population health certainly are not simple, one can simplify the healthcare value equation ( Value = E[Q+S] / [∑(P*U)] ) to its elemental values:  Value = Effectiveness / Cost.  In this view of healthcare value, effectiveness represents the combination of quality of care and patient satisfaction, and cost reflects the summation of the prices for utilization, care management, and administration.

Like we learned in algebra class, one solves the unknown values by solving for and substituting known values.  So, to drive the discussion of how to solve the healthcare value equation, we’ll substitute the variables of the equation with the stakeholders of the healthcare ecosystem whose roles most affect the variables. 

For this discussion, the stakeholders in the healthcare ecosystem are:

People =              Patients and Policyholders
Providers =         Practitioners, clinics, hospitals, post-acute facilities, etc.
Producers =        Pharma and medical technology
Payers =              Health plans, government, employers
Policymakers = Federal and State HHS and Legislatures

Substituting the stakeholder roles for the variables in the healthcare value equation, the result is:

Value = (People + Policymakers) / (Providers + Producers + Payers)

An equation depicting the relationship of healthcare stakeholders in value-based care

In subsequent posts, I’ll examine how each of the stakeholders impacts the healthcare value equation.

TripleAim Strategy Advisors can help stakeholders in the healthcare ecosystem as a consultant or advisor to provide insights and develop strategies to advance equitable, value-based care.

Contact us to discuss this important topic or see additional ways we can help!

Don

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