Linking outcomes to costs: A unified measure to advance value-based healthcare

Abstract

Guided by the Value-Based Healthcare framework, the healthcare sector increasingly aims to maximize patient value by improving the quality of care while containing costs, which requires aligning the interests of patients, health providers and payers. This study addresses the need for advanced patient value measurement techniques to navigate this complex balance by introducing a four-step framework that combines Data Envelopment Analysis (DEA) and Time-Driven Activity-Based Costing. The framework starts by defining Decision-Making Units and specifying the treatment pathway (Step 1), followed by selecting the relevant inputs (i.e., costs) and outputs (i.e., health outcomes) (Step 2). Next, the DEA model is tailored to fit the specific medical context (Step 3), ultimately translating the value equation into unified, individual value scores that rank patients by perceived value (Step 4). Unlike traditional healthcare evaluations, the multiple health outcomes are connected to granular costing information without relying on monetary values or subjective weighting. Using real-life data from a case study focused on psoriasis, we demonstrate that value assessments significantly differ when considering a comprehensive set of health outcomes, rather than relying on a single primary outcome or treating costs and outcomes separately. These holistic value scores are used to pinpoint inefficiencies on an individual level, analyse patterns of health improvements through cluster analysis, and assess the impact of contextual variables on value creation using econometric analysis. Our results revealed the complex interplay between outcomes and costs by identifying factors like the presence of comorbidities, which had no direct influence on costs or outcomes, as overall value driver. In summary, this research proposes an intuitive metric for value benchmarks across time, health providers and treatments, ultimately contributing to the effective delivery of personalized and value-based healthcare.