Contracting value: Shifting paradigms 

‘Value’ is a key term in the current crisis in healthcare globally, emphasizing that our problems in containing costs are just as crucial to tackle as our problems in capturing and ensuring quality.

Contracting value shifting paradigms:

Contracting value is a thinking piece that is going to be provocative in the life of some readers. It is going to put you in the face of the client, and it’s going to make them realize that KPMG has something to say about the future of healthcare and something to say about where national country’s policy of insurance  company should be pushing healthcare towards. Some people are going to be angry, some people are going to love it , this is exactly what we feel thought leadership should be doing and I mean that’s how you can use it.


The core idea of contracting value is that you know we really need to refocus on how we set the payment system in healthcare and how we realign the payment system in healthcare to generate high quality low cost care. What contracting value then sets how to do is basically has three principles.


The first insider of the report is that are a very crucial reason for that our payment systems whether it is in market bases or in the national systems. The payment systems actually stimulate providers and professionals to deliver exactly the kind of outcomes that we are getting i.e. too much money with not enough quality that’s lesson number one


Lesson number two is that in order to change that we are really going to have to think differently about the kind of ways we pay and contract or commission care and the way to go is to move from paying for individual steps or from working with huge budgets that you know that cap over everything. We have to really move towards integrated bundled payments for integrated trajectories of care and that’s the second lesson.


The third one is that once you see that once you realize how to do that and that’s actually it sounds theoretical but it actually is not that difficult, it’s actually many countries that are already doing that and regions that are playing with this. Once you do that it is imperative that you measure the quality of care over that same care trajectory so that you really can get a grasp on what are we paying on this care, what are the outcomes of that i.e. you found the key to Contracting value.


A crucial inside of the last couple years is that if we would get the quality of the healthcare system better that’s probably the best way to reduce cost because very often improve quality comes by reducing waste, by preventing an infection which will then not cost money by preventing a reoperation which costs money, by preventing somebody with diabetes to sort of go out of control which costs money, so by improving the quality of healthcare is actually the best way to reduce cost in a way that you know patients love, providers love and professionals love

In fact, our current crisis can only be solved if we tackle these issues as two sides of the same coin. Value, after all, is outcome relative to costs: reducing costs while improving outcomes is obviously the ideal route to take.

Mark Britnell
Quality and Costs
High quality, Low care
Building blocks
Value creation
Contracting value - Conclusion

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