Contributor: John Harris, WG'88
To learn more about John, click here.
We have all heard about the “shift from volume to value.” Providers have many names for this, including value-based payment, population health, accountable care, shared risk, network tiering, patient-centered care, and consumer-driven care.
As a consultant advising providers and payers on this transition, the term I prefer is value-based competition. It’s an odd term, because in a competitive market, competition is always “value-based” – consumers make decisions based on cost and perceived quality. But healthcare has been a very inefficient market. Insurance protected consumers from the cost of their decisions, physicians decided for patients, information to make good decisions was lacking, and little effort went into defining and reporting quality.
I often return to an insight from Professor Jack Hershey, who said that healthcare is like any other sector of the market…….. except for the impact of insurance, physicians, government payments, regulation, and the moral issues associated with life and death decisions.
However, despite these barriers, healthcare is transforming, or at least forces are trying to transform healthcare. This fall, at our annual alumni conference, we are discussing “The Value Ripple Effect,” examining the causes and consequences of the push for value that is rippling its way through the healthcare system. Each year, members of the Wharton Healthcare Management Alumni Association gather for a conference with limited attendance to support more intimate discussion of critical issues. We exchange insights among industry leaders, including Wharton alumni in the business of healthcare.
This particular alumni conference topic makes it possible for leading purchasers, payers, providers, suppliers, bankers, and entrepreneurs to discuss how they are working with their immediate customers and vendors in new arrangements that reward value. And we will all wrestle with what is a fad and what changes are here to stay.
If you are not at the conference, we hope you will join the conversation about this and other important and complex issues through the Wharton Healthcare Knowledge Network, our online discussion community.