Why don’t we talk about value in healthcare? We have an understandable interest in ensuring that there is an objective quality to the services we provide but we seem to put less effort into looking at the value that services create.
In some ways it is understandable, we still see quality through the lens of classical economic theory. The attempt to commodify healthcare assumes that every episode of delivery is consistent, in terms of quality, therefore is received equally. This objective truth of quality is sound in theory, but we all know that it doesn’t stand up to the complexity of the people that come into contact with services.
This traditional view also tends to see value as purely an economic marker that is released as service delivery is consumed by patients. The challenge is that the economic value released by delivering a service is arbitrarily set and doesn’t take any account of the individual value experienced by patients. In fact, patients play an insignificant role in determining the economic value of episodes of contact.
The lack of consideration of what value is delivered through services means that we miss an excellent opportunity for service improvement.
Treatment is not something that can be done to people in the abstract. There is always a need for agreement in the way that treatment is delivered. The point where treatment and patients work together is the real point that value is created.
The economic framework of service-dominant logic provides us with a very different mindset to understand what value is in terms of healthcare. The theory, developed by Stephen Vargo and Robert Lusch attempts to get away from the idea of markets and the exchange of goods; instead of seeing all economic activity as an exchange of service within service ecosystems.
This model provides healthcare with an opportunity to see the quality in a very different way. The most striking element of service-dominant logic is the realisation that value is only co-created by everyone involved in the delivery of a service. This is something we all know to be true in health delivery. Treatment is not something that can be done to people in the abstract. There is always a need for agreement in the way that treatment is delivered. The point where treatment and patients work together is the real point that value is created.
Another axiom of service-dominant logic, that should resonate with people in healthcare, is that value is always unique, and phenomenologically determined by the beneficiary. We know that patients don’t want treatment for the sake of treatment. They want the change in their life situation that treatment will, hopefully, deliver. Therefore, the value of a treatment is co-created by the patient and health provider and will be unique in each case.
Recognising the key role of co-created value highlights the benefits of a collaborative system.
Although this might seem like an interesting philosophical position to take, it also has practical benefits. By recognising how value works in service delivery we begin to build a more constructive relationship with patients. Because outcomes can never be anticipated, the change in value realised by beneficiaries provides a basis for learning. This is the key to building learning competency.
Recognising the key role of co-created value highlights the benefits of a collaborative system. Collaboration improves viability. Because increased communication highlights errors which can be learned from, therefore increasing efficiency.
We know that rapid changes in structures of society, demographics, ethnography and technology mean that what we understand about patients quickly becomes outdated. The first practical step we should take is to recognise that all services are only as good as the value proposition they make. When designing new services do, we really understand what it is that patients want to achieve? Do we understand what the core activities are (jobs to be done) that have caused patients to accept the value proposition offered?
This understanding cuts to the very centre of many of our most intractable health care issues. What is it about the value proposition that is offered by A&E that makes it more readily accepted than alternatives? What is the value proposition of public health? Do we miss an opportunity to influence healthy behaviours because we do not understand the value that people want to realise?
Generally, we don’t get a lot of opportunities to think about the motivation behind why people use services because the assumption is they need to in order to “get better.”
Simple value proposition activities can provide you with an opportunity to better understand the nature of the service you provide and help you to think about why people use it. This, in turn, helps to clarify whether or not you really are co-creating value.
As we better understand the value we create we also recognise that the safe delivery of that value is the true measure of quality. I would really like to hear from anyone that is interested in helping us co-create some value – send me an email if you’d like to find out more.