What Happened to the Value Proposition in Healthcare?

Leigh Anne Cappello
Jan 7, 2016 · 7 min read

It occurred to me the other day that one of the fundamental building blocks in the design of any business model (if not THE fundamental building block), the value proposition, seems to have gotten lost in the course of the multi centuries-old healthcare business model. Many may argue otherwise, since the topic of ‘value’ has flooded every conversation around the need for change in our healthcare system — value-based care, fee-for value, value-based measurement. The difference is that these conversations about value are simple math equations of quality over cost and are seen more through the lens of the institution than the lens of the end user. The customer or end user value proposition is largely ignored in these conversations, and yet key to the successful transformation of our healthcare system.

I like Wikipedia’s definition for Value Proposition best: A value proposition is a promise of value to be delivered and acknowledged and a belief from the customer that value will be delivered and experienced. It’s the words ‘promise’ and ‘belief’ that I find most striking relative to the realities of the healthcare business model. When was the last time a large healthcare system clearly defined their promise of value to their patients? Perhaps even more, when was the last time we explored or measured whether or not our end users believe that value will be delivered and experienced? And if not, why?

In the course of my role as Patient Experience Lab Director at the Business Innovation Factory, I have read many mission and vision statements for large healthcare systems. Impressive. Missions to provide the best, most compassionate care, with the latest technologies, supported by the best physicians, and proven through the volumes of research and awards. I read vision statements painting a future picture of remaining or becoming the leading providers and innovators in medicine. But rarely do I see a statement that proves they know what I want and need, why I want and need it, and why I should believe they will provide it to me. It is just assumed I want to be healed, quickly, by the best my community has to offer. And even more rarely do I realize these promises in the existing system. It’s pretty much business as usual, with a (much welcomed) whiff of compassion, concern, and pleasantries slapped onto the existing business model.

In the quality-over-cost equation, the predominant metric is whether or not the patient was ‘healed’ effectively and efficiently. But were they happy? Was their stress managed effectively? Did their family feel engaged, in control, or assured? Do they understand what happened to them? Do they know how to avoid it going forward? Do they know what to do next time this happens? What if these are all things the patient values in addition to being ‘healed’? If the answer to any of these is no, then maybe we have taken our eye off the value proposition ball.

It’s perfectly explainable, really. In healthcare, unlike other service-based industries, we are talking about your HEALTH. Which is not so distantly connected to your LIFE. If things go wrong, you could DIE. Yikes. So it makes sense that our priorities all boil down to the medicine, the science, and the clinically based solutions. It therefore certainly makes sense that we think the clinical, medical, administrative leaders of this industry should be solely responsible for solving the problems in the system.

Further, as consumers of healthcare, we enable all this behavior because we are first and foremost, scared. We do seek out the ‘smartest’ and ‘best’ doctors, the most reputable hospitals, the right medicines etc. We need all that. But what we forget is that health and well-being aren’t just impacted by our physical states, our genetics, or our functionality. Health and well-being are social, emotional, behavioral, and spiritual. If our service providers don’t understand the holistic perspective from our end user experience standpoint, they are most definitely not doing two things: 1) maximizing their effectiveness and 2) creating happy, healthy customers who will come back again and again.

That brings me to another topic — the primary care business model in the fee-for-service model. Glurg. I feel for these docs who got into medicine to help people, and can only say business is ‘good’ when there are lots of sick people…coming back over and over again. OK, so we are working to change that. But is the ‘value’-based model even appealing to primary care docs? They may be reducing their costs and keeping patients healthier, but can they make enough money to pay off their student loans and their doctor-esque lifestyles? How about their stress levels? What if primary care docs started to build business models around the other factors in the value proposition equation? Might they get back to their pre-med vision of what helping people would be like?

OK. So how do we do all that?

First: We must SHIFT our lens of thinking about the value we deliver to include the end user perspective. What do THEY value across all aspects of their healthcare? What do they dismiss as irrelevant in their experiences? How do we use these insights to more clearly understand the unmet wants and needs and then wrap a business proposition around them? How do we create a value proposition for our patients that is as clear and exciting as this one pulled from one of the greatest product/service companies of this century, ZAPPOS “Create WOW with every experience.” See, Zappos doesn’t consider themselves a shoe store, or an online marketplace. They call themselves a ‘service company that happens to sell shoes, clothing and accessories’. They know what their customers want and value in their shopping experiences and they give them that. The result? Huge profits. And do you know who their most profitable customers are? The ones with the most returns. Can you imagine a healthcare model where the ‘frequent fliers’ became the healthiest and most profitable?

Second: We need to involve our patients in the CO-CREATION of our new business models. Healthcare is a monster. We are not going to fix it by tweaking the existing system. And we most definitely will not fix it by getting a bunch of healthcare executives in a room to imagine what they think their end users want and need. Their lenses are too gunked up with insitutional thinking. We have to get in a sandbox with patients and families and imagine a new experience, with them, and not for them.

Third: We have to PROTOTYPE and TEST these models in the real world — with real patients, physicians, administrators — so we can learn what works, what doesn’t, and what we need to iterate upon until we get it right.

I recently read a post titled Value Propositions for Healthcare Providers from an insightful organization seeking to make change in healthcare through the promotion of self-managed care. I couldn’t agree more that the time is now for more self-managed care. We have the tools, the technology, the curious and driven Boomer and Millennial generations…why wouldn’t, couldn’t, shouldn’t we take on a more self-managed approach to healthcare?

But I took pause when I saw the explanation behind the #1 Value Proposition suggestion, ‘Change Behavior and Lower Healthcare Costs,” for two reasons: First, we can’t change behavior without knowing what will motivate our patients and families to do so. In other words, what do they value and how do we leverage that to create change? It’s not just about ‘training them’ to learn how to self-manage, and if we take that approach we will fail more often than win, especially with the high-cost, vulnerable populations who have more to lose, where the stakes and pressure are highest, and who cost the system the most money. And second, if our focus is simply on costs to the system, we are again missing the point. Patients who are not motivated, understood, respected and valued for their needs and wants will continue to blindly drive costs up in our system. If our focus is centered more around lowering their costs for instance, while maximizing health and well being, and driving new revenue streams into the system through innovative product/service offerings, we will have a win-win.

Here’s what I want and need, in case you were wondering. I want more than to be healed, quickly, by the best the community has to offer. I want price/cost transparency. I want emotional support for my entire family. I want trusted 24–7 access to advice for the likely remedial, but oh-so-important-in-the-moment issues. I need clearer explanations for visual learners. I want holistic/natural options to evaluate alongside the medical ones. I want to buy products that help me live a healthier life available at point of purchase in my doctors office. I want customization around my health goals/plans. I need all my doctors to talk to each other. And so much more.

Is anyone listening? Does anyone care? I promise I will save you money if I you do something about all this. And I promise I will pay appropriately for the value these solutions would provide me. And come back for more.


BIF Speak

Stories about the power of stories in transformation, business model innovation, community, healthcare, education, and the citizen experience, from the Business Innovation Factory.

Leigh Anne Cappello

Written by

Friend of the Future; Patient Experience Lab Director at Business Innovation Factory; CHANGE AGEnt; Social Robot-assist

BIF Speak

BIF Speak

Stories about the power of stories in transformation, business model innovation, community, healthcare, education, and the citizen experience, from the Business Innovation Factory.

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