Value management: optimizing quality, service, and cost

Hospitals have wrestled with balancing quality, service, and cost for years--and the visibility and urgency around measuring and communicating real metrics has grown exponentially in the last decade. However, even today, most hospital leaders cannot articulate or demonstrate the "value" they provide to patients and payers. Instead of developing a strategic direction that is based around a core value proposition, they focus their strategic efforts on tactical decisions like physician recruitment, facility expansion, and physician alignment. In the healthcare paradigm of the next decade, alignment of various tactical initiatives will require a more coherent understanding of the hospital's core value positioning. The authors draw on their experience in a variety of healthcare settings to suggest that for most hospitals, quality (i.e., clinical outcomes and patient safety) will become the most visible indicator of value, and introduce a framework to help healthcare providers influence their value positioning based on this variable.