Assessing value in healthcare today is easier said than done. The term gets thrown around a lot but few have a solid grasp on how it should be evaluated. In my experience, there are four main requirements for a good value assessment:

  1. Define it specifically
  2. Measure it accurately
  3. Compare it meaningfully
  4. Communicate it clearly

Define value specifically. Without a specific definition of value for a given situation, it becomes impossible to measure, compare, or communicate it. Too often, value is used without a clear indication of what it means. Regardless of the situation, one of the key questions to ask when defining value is: “Value to whom?” For almost any activity, be it research, investment, or quality improvement, the value produced will be different depending on the perspective. Whether one discovers a new treatment, successfully reduces the likelihood of an adverse event, or improves the efficiency of care, the associated value will differ for payers, providers, administrators, and patients. If you seek to assess the value of an activity, clearly defining what value means will almost always be in terms of a specific perspective or interested party.

Additionally, a definition of value does not have to include dollars. Value is subjective and can change over time, so technically there is no “right” way to define it. However, if you fail to define it at all, your intended audience will have no frame of reference from which to evaluate its magnitude. Providing a specific definition allows you to determine how best to measure it, compare it, and communicate it.

Measure value accurately. Some would argue that of the four, this one is the most challenging. A big reason why is that much of what is considered valuable about a change or improvement in treatment or care may be intangible. Quality of life, patient experience, caregiver burden, burnout, stress, anxiety – these are all critical aspects of how valuable we consider care to be, and all are difficult to accurately measure.

However, having a specific definition will help tremendously. For example, if you define value as the monetary return payers would realize from fewer adverse events, then it becomes clear that measuring value will involve measuring the reduction in care utilization and subsequent cost avoidance. If, instead, you define value as an improved working environment and job satisfaction for providers, then measurements of value will likely involve assessments of emotional health and burnout. Notably, determining how to define value and how to measure it are often considered in tandem. You should ensure that there is a way to measure value the way you are proposing to define it before you settle on a final definition.

Compare value meaningfully. A difficulty encountered by those who conduct return on investment (ROI) analyses is establishing what constitutes a “good” or “acceptable” return. Unlike in manufacturing or banking, a small (or even slightly negative) financial ROI on healthcare activities may be acceptable if it accompanies a significant improvement in care quality. Similarly, almost any assessment of value will require a determination of how much value is needed or accepted. Often, this involves more subjective determinations to set thresholds or goals. Sometimes, there are similar activities that we can reference and use as a baseline or comparison set for our own value determination. Even so, these comparisons typically require some amount of creativity or specialized knowledge to provide meaning.

Communicate value clearly. Rarely will we endeavor to improve patient care without intentions of spreading the news of a success to other settings, populations, or situations. Even if value has been defined, measured, and compared, it will fail to effect change or influence others unless it is communicated clearly. The good news is that if the previous three steps have been successfully navigated, many of the building blocks for good communication exist. Still required, however, is to select a method and venue for dissemination (e.g., a conference, a paper, an oral report, etc.), and to develop the appropriate materials that balance thoroughness with clarity. To dive into the details of how best to do this would require more room than is available, but given how often this step is forgotten entirely, it is enough here to simply note its importance.

Finally, you can probably tell that the steps described above involve a mix of technical expertise and practical consideration. Combining them into an effective evaluation requires more than just training and experience. I have said before that “Quality Improvement is a creative endeavor.” Well, so is value assessment.