June 20, 2024

Value-based healthcare (VBHC) has become one of the most up-to-date hot topics and widely used terms among C-suite leaders in modern healthcare. The initiatives have been escalating, ever since Porter and Teisberg introduced the concept of value-based competition in their seminal book titled ‘Redefining Healthcare’ (2006), in response to the increasing cost of healthcare in the US and the failure of reforms to improve health outcomes and contain costs.

When talking about healthcare, the focus is often on the cost of providing treatment. Porter and Teisberg introduce seven principles of value-based competition — with the value being the main objective, simply defined as “the quality of patient outcomes relative to the dollars expended”.

Value = health outcomes that matter to patients/cost of delivering healthcare

The principals emphasise that the focus should be on value for patients, not just to lower costs, and there must be unrestricted competition based on the results. The competition should also focus on medical conditions over the full cycle of care while ensuring that high-quality care is less costly, and the competition is on regional and national levels. At the same time, the value is driven by provider experience, scale, and learning at the medical condition level. It is crucial for value-based competition (VBC) that information on results and prices needed must be widely available. As a final recommendation to foster VBC, innovations that increase value must be strongly rewarded.   

In KSA, VBHC entails a change from conventional fee-for-service models to strategies that put patient satisfaction, efficiency, and results first. The Saudi government has expressed interest in implementing VBHC to improve the efficiency and quality of healthcare.

Each country is addressing VBHC concept implementation based on their context perspective, strategic priority, available resources, cultural needs, and combating challenges to ensure alignment and coordination at all levels of healthcare delivery and substantial collaboration efforts, with the patient and his/her well-being placed at the centre of the system. The World Economic Forum (WEF) has provided a comprehensive framework for a Value-based Health System. The measurement of outcomes and costs incurred to deliver those outcomes are systematically collected and measured”.

Related: Trends in international healthcare collaborations in Saudi Arabia and across the GCC

To support this model, WEF has identified four enablers:

  1. An integrated informatics infrastructure to capture, share, and analyse health outcomes.
  2. Analytic tools for benchmarking and research.
  3. New forms of value-based payments that introduce incentives for continuous improvement in patient value.
  4. New roles and organisational models that allow better access to appropriate care.

Having a vibrant society with fulfilling lives, where all can live healthy, be healthy, and care for their health is a strategic goal of the Kingdom of Saudi Arabia Vision 2030. The Vision is committed to the healthcare sector that promotes competition and transparency among providers” that inevitably will enhance the capability, efficiency, and productivity of care and treatment, and increase the options available to our citizens”.

Among others, Vision 2030 is determined to optimise and better utilise the capacity of our hospitals and healthcare centres. These clear vision statements represent strong foundations to achieve the Vision 2030 health sector goal of increasing the average life expectancy from 74 to 80 years. At the same time, they represent a strong mandate for all regulators in the Kingdom to work towards these goals by utilising contemporary concepts of funding healthcare services.

Therefore, value-based healthcare (VBHC) is an established strategic objective of the Kingdom of Saudi Arabia’s healthcare transformation agenda. As an integral part of this transformation, the Council of Health Insurance (CHI) envisions a regulatory role that supports this objective and direction. In this context, the CHI has begun a process of initiating a series of VBHC enabler initiatives.

Thus far, CHI has progressed significantly in standardising data and introducing Minimum Data Set (MDS); launching contemporary health information exchange platform (i.e. NPHIES), and introducing patient classification systems (AR-DRG and SBS). It has also raised the requirements and standards around Health Information Management (clinical coding, training, accreditation, and billing).

In my opinion, there are six key fundamental components to VBHC enabler initiatives in Saudi Arabia:

Patient-centred care: Emphasise actual patients’ needs and preferences in treatment decisions to improve overall satisfaction and outcomes.

Outcome measurement: Use metrics to evaluate the efficacy and calibre of care; this approach focuses on health outcomes rather than the quantity of services provided.

Payment reform: Transition from fee-for-service to value-based payment models, where healthcare providers are incentivised to achieve positive patient outcomes.

Data integration: Implement robust health information systems to facilitate data sharing among healthcare providers, enabling better coordination and continuity of care.

Performance transparency: Make healthcare performance data accessible to the public, fostering accountability, and encouraging competition among providers.

Care coordination: Enhance collaboration among healthcare providers to ensure seamless transitions of care and avoid unnecessary services.

How the insurance sector in KSA will benefit from value-based healthcare (VBHC)

The insurance sector in Saudi Arabia will overcome many everlasting challenges in the next coming years and thrive from the VBHC initiatives sought by the Saudi government strategy. These initiatives shall achieve several benefits to the insurance sector in Saudi Arabia. The value-based healthcare (VBHC) can bring:

Cost containment: VBHC focuses on improving outcomes and efficiency, which can lead to better management of healthcare costs. Insurance companies stand to benefit from reduced expenses associated with unnecessary tests or treatments, ultimately contributing to more sustainable and predictable costs.

Quality assurance: VBHC emphasises the delivery of high-quality care and improved patient outcomes. Insurers can leverage this to negotiate better partnerships with healthcare providers, ensuring that the care covered by insurance plans aligns with established quality standards.

Risk management: By promoting preventive care and proactive health management, VBHC can help insurers mitigate long-term health risks. This shift towards preventive measures can lead to a healthier population, reducing the frequency and severity of claims for insurance companies.

Data-driven decision making: VBHC relies on data analysis to measure outcomes and identify areas for improvement. Insurers can use this data to make informed decisions about coverage, network partnerships, and risk assessments, ultimately enhancing their ability to provide effective insurance products.

Enhanced patient engagement: VBHC encourages patient involvement in their care. Insurers can leverage this by promoting wellness programmes, incentivising healthy behaviours, and using technology to engage policyholders in their health management, potentially reducing the likelihood of expensive health issues.

Collaborative partnerships: VBHC fosters collaboration between insurers and healthcare providers. Building strong partnerships can lead to more integrated and coordinated care, ensuring that insurance plans align with best practices and deliver value to policyholders.

Improved customer satisfaction: As VBHC aims to enhance patient experience and outcomes, insurers adopting these principles may see increased customer satisfaction. Satisfied policyholders are more likely to remain loyal, contributing to the overall success and sustainability of insurance programmes.

Incentives alignment: VBHC encourages aligning incentives across the healthcare ecosystem. Insurers can work with providers to establish shared goals, fostering a collaborative environment that benefits both parties and, ultimately, the insured population.

In conclusion, the adoption of VBHC principles in Saudi Arabia can positively impact the insurance sector by promoting cost-effective, high-quality care, improving risk management, and enhancing the overall value proposition for policyholders.

Related: Establish collaborative partnerships in Saudi’s transformative journey

Accreditations, patient safety, and public health that support VBHC initiatives in KSA

The establishment of different Saudi national programmes as infrastructure to standardise and advance the quality of care and care delivery, patient safety, healthcare providers competency, and public health represented by the Centre Board for Accrediting Health Institutions (CBAHI), the Saudi Patient Safety Centre (SPSC), the Saudi Commission for Health Specialties (SCFHS) and the newly Public Health Authority (PHA – WEQAYA), shall support the Kingdom’s strategy towards HCVB goals alignments and fully carry its implementation and outcomes efficiently.   

Accreditation plays a crucial role in supporting the implementation of value-based healthcare by establishing standards and ensuring that healthcare providers meet certain quality benchmarks. In the context of VBHC, accreditation helps validate the commitment of healthcare organisations to deliver high-value care. A master healthcare provider can clearly observe how accreditation and VBHC are interconnected in many ways:

Quality standards: Accreditation bodies set and uphold quality standards for healthcare facilities. Meeting these standards is aligned with the goals of VBHC, which prioritise delivering quality care and achieving positive patient outcomes.

Patient-centred focus: Both accreditation and VBHC emphasise a patient-centred approach. Accreditation standards often include criteria related to patient satisfaction and involvement, aligning with the core principles of VBHC.

Outcome measurement: Accreditation processes typically involve assessing outcomes and performance indicators. This aligns with the VBHC principle of measuring and improving outcomes to ensure value in healthcare delivery.

Continuous improvement: Accreditation encourages continuous improvement in healthcare practices. VBHC also emphasises ongoing assessment and improvement, making accreditation a supportive mechanism for healthcare organisations striving to enhance value.

Incentives for quality: Accreditation can serve as a mechanism to incentivise healthcare providers to adhere to VBHC principles. Achieving and maintaining accreditation status may be linked to financial incentives or improved market reputation, reinforcing the adoption of value-based practices.

Data integration: Both accreditation and VBHC require effective data management and integration. Accreditation processes often involve data collection and analysis, supporting the data-driven approach inherent in VBHC for measuring outcomes and improving care delivery.

In summary, accreditation provides a structured framework for healthcare organisations to align with VBHC principles. It helps ensure that healthcare services are not only accredited but also contribute to improved patient outcomes and overall value in healthcare delivery.

Finally, we view the VBHC holds great potential to improve overall healthcare quality, delivery, patient safety, healthcare providers calibers, effectiveness, productivity, incentives, transparency, and efficiency in the country, and hopefully, the model will mature over the next few years to reach the summit in 2030.   

References available on request.

SuppliedDr. Nashat Nafouri

Dr. Nashat Nafouri

Dr. Nashat Nafouri is the Chair of Healthcare Interest Group, Executive Officer of Saudi Quality Council, and Executive Consultant of Quality Logic. He will be speaking at the Quality Management conference at Arab Health 2024.

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