The Meanings of Value
WORDS play a pivotal role in our thoughts and actions. Unfortunately for those of us who daily deal in the world of value-based care, the multiple ways we use the word “value” in the business world, including the healthcare industry, bewilders people new to the concept of value-based care and blurs the meaning of value for others in the industry (who, likely, should know better!). Last time I looked, there were 19 different definitions of “value” in the dictionary. This assortment of definitions helps explain why we sometimes spawn such confusion around the concept of Value-Based Care in medicine.
In the context of healthcare delivery, value is defined as: value = (quality / cost) x experience. We create value when we enhance quality, optimize cost, and/or enrich experience for both the patients as well as the healthcare providers. Common meanings of “value” that resonate with this notion of value are using it to describe a personal concept of deep meaning - ideals, customs, and institutions - and also when we speak of value as a treasure having merit or importance.
To best create value in healthcare, we must hold the concept close to our hearts, feeling passion for the creation of value in the care of patients. Likewise, as I’ve explained in my book, Value in Healthcare, if we don’t treasure the components of healthcare delivery - patients, physicians, and staff - they simply become cogs in the wheels of industry and widgets rolled off the production line.
Other characterizations of “value,” though, blur the meaning in the context of healthcare, especially used in the context of business and discussions of value-based care. We say the word value, but the intended meaning can easily push us down the wrong path. I would suggest the following alternatives in conversation:
“Jane’s knowledge of astrophysics really brings value to the enterprise.” When we speak of an asset or person bringing value to an organization, let’s instead speak of its benefit. “Jane’s astrophysics knowledge is a great benefit to the company.”
“The value of this company may be greater if revenue is grossed up rather than using the net.” Avoid discussing the value of a company when we mean its valuation, worth, or an appraisal. “The investment worth of this company may be greater ….”
Relative Value Units (in healthcare reimbursement) - just call then RVUs, as they are truly a unit of production, not a measurement or reference to the creation of value.
“The company was able to extract value from the market.” There is really no such thing as extracting value. In this context, we are, instead, referring to inordinate creation of revenue through market manipulation or regulatory optimization at the disproportionate cost to certain stakeholders. Value in the healthcare industry, value that benefits all the participants, can only be created, or destroyed.
Let’s keep value clear and clean when discussing its presence (or absence) in healthcare. That will keep us focused on value creation and not let the detracting definitions distract us from our quest for value.
