Rafael Bengoa: Five prerequisites for value-based healthcare

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Dr. Rafael Bengoa

Oct 16, 2018 - reading time 6 mins

By Dr. Rafael Bengoa

Director, Institute for Health & Strategy


Dr. Rafael Bengoa is an expert in management and public health and a strong advocate of universal public health. Considered one of the fathers of Osakidetza (Basque Health Service), he has forged an impressive path within the public health landscape. Alongside Patricia Arratibel, he is presently the co-director of The Institute for Health & Strategy in Bilbao, Spain. Previously Dr. Bengoa acted as the Minister of Health of the IX legislature of the Basque Government was Vice Chairman of Advisory Group Horizon 20/20 of the EU and was Director of Health Systems in WHO-HQ until 2006. Presently he advises on policy level reforms to the Governments of Spain, France and the USA during Obamacare. More recently he has led the expert panel for Northern Ireland, (Systems, Not Structures) and participated as expert in the Scottish Digital and Health panel. He is Senior Leadership Fellow at Harvard University and teaches in several business schools.

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Dr. Rafael Bengoa is a passionate believer in value-based healthcare, but he knows that implementing such a radical overhaul of any health system has its challenges. In this post, Dr. Bengoa explores five fundamental changes that need to happen before we can be ready for a value-based healthcare system.                 

Doctor records temperature with ear thermometer

Stop over-intellectualizing and focus on practical solutions

What does value-based healthcare actually mean? There are two different definitions. There is the Porter definition, which measures healthcare value as a hard calculation: patient health outcomes divided by the costs of delivering those outcomes. This definition has taken hold in places like the United States, where healthcare tends to be focused on the individual. It has struck a chord both for payers as for providers and the knowhow is growing.


The University of Oxford’s Nuffield Department of Primary Care Health Sciences has a different definition, which focuses on the idea of a delivery system which is much more integrated and focuses on the health of the wider population rather than individual healthcare. This population perspective is particularly prevalent in places like Europe, where individual healthcare access is covered in policy terms and where health systems are trying to focus their efforts on broader population health.

It’s all too easy to for the conversation to drift too far away from reality. We need a more concrete discussion focusing on the ‘how’ rather than the ‘why’.

Whichever definition you choose, the problem is that you’re still having a discussion on intellectual terms. It’s all too easy for the conversation to drift too far away from a reality that people will understand. We need a more concrete discussion focusing on the ‘how’ rather than the ‘why’ – how will we move towards value-based healthcare in our day-to-day systems, what are the key blockers, and how can we overcome them?

Build a health agenda, not an illness agenda

Around the world, healthcare systems are preoccupied with cost control, worrying about their balance sheets, managing unions, and managing changes to professional roles and seeing how to control pharmaceutical costs. These are all real problems but tend to encourage us to focus on the short term rather than on what is important. Against this backdrop it’s very difficult to organize a proactive healthcare system, one which is focused on managing the health of the population and managing chronic conditions, rather than just passively reacting to patients coming into the system.


It’s hard to move beyond an illness agenda. The strength of organizational culture can make it very difficult to introduce radical change in this direction. But healthcare can provide so much more than reactive treatment of illness, and in order to encourage a more proactive and holistic view of healthcare provision, it’s important for policy-makers to re-organize and manage both agendas – the short term and the long term. Some call this ambidextrous management. We call it simply learning to manage a double agenda. Value will come from learning how to do this at all levels of care.

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Make the word ‘value’ mean something tangible

Whatever we do, we need to get doctors and nurses involved and engaged, both from the top down and the bottom up. A challenge here is that, in the abstract, it isn’t immediately obvious what value-based healthcare means. How do we define ‘value’? If we continue to talk to them about population health and health management, there’s a risk of losing their attention as these issues are far away from their everyday experiences and roles.


To overcome this, we have to start with an understanding of the context in which healthcare professionals (HCPs) work, and this means talking about patient safety and quality of care. By making that link, they will start to connect with the word ‘value’, as will their managers. Little by little, we can explore broader notions of value-based healthcare, but it’s more important to start with issues and definitions that HCPs can easily relate to.

Give patients real power over the process

Patient engagement is key to the success of value-based healthcare systems. If patients can see the benefits, and are empowered to make choices, the delivery of value-based healthcare will be more successful.


There are many technologies and initiatives out there aimed at this. During my time in government in the Basque Country (2009-2012) we introduced electronic health records for 2.5 million people.  This gave them access to their health records at any time of day or night, while providing HCPs with access to the same patient record in primary care centers and hospitals in real time. We did the same with electronic prescriptions. Technology is not the only process to engage patients, but it is one of the key enablers.

We need to find ways of returning more power to patients.

Despite these efforts, however, healthcare systems haven’t completely moved towards patient empowerment. At the moment it’s looking unlikely that patients will be a key driver of change, as they are not empowered or organized. Even when patients do have choice, they don’t use it – they change doctors or insurance plans infrequently, even if they’ve had bad experiences. We need to find ways of returning more power to patients: many HCPs are trying to do this through social prescribing and personalized health recommendations.

Be open to honest discussion

Most countries I’m familiar with do not have value-based healthcare on their agenda. Policy-makers may be aware of wider issues in healthcare, but their day-to-day is spent managing the financial side of the system. Put it this way: they are not waking up in the morning wanting to genuinely transform healthcare. They tend to maintain and improve the status quo, but that is insufficient with the challenges we all have in terms of quality and sustainability.


It is necessary to launch a broader discussion and collective learning around the ideas and options available for models based on value and not just on cost. A common pitfall, especially for people in the technology sector, is talking to policy-makers about the benefits of digital solutions as providing value without fully understanding or analyzing underlying policy aims required for these technologies to have a chance of being embedded in that system.


Better communication among stakeholders will make everyone realize they are on the same page, with the same aims, and that working together is the only way to bring about truly valuable healthcare.

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