Value based pricing: can it work?
Value based pricing: can it work?
The idea of paying for “value” in healthcare was boosted by Harvard business strategist Michael Porter, who argued that healthcare should focus on value for patients, defined as “health outcome per dollar of cost expended.”1 Competition in the US healthcare system, he argued, had failed because it did not focus on value. Although aimed at the US system, his terminology was widely adopted. In the United Kingdom, new NHS policies were presented in value terms. Paying hospitals by activity was termed “payment by results,” and the system for paying family doctors for specified activities was titled Quality Outcomes Framework. Value based pricing for branded drugs, which will come into force in 2014, is part of this trend. Although the system was intended to improve access to new drugs, the decision to include wider societal costs in the assessment of value could have unintended consequences.
Raftery, James
27c2661d-6c4f-448a-bf36-9a89ec72bd6b
11 October 2013
Raftery, James
27c2661d-6c4f-448a-bf36-9a89ec72bd6b
Raftery, James
(2013)
Value based pricing: can it work?
British Medical Journal, 347 (f5941).
(doi:10.1136/bmj.f5941).
Abstract
The idea of paying for “value” in healthcare was boosted by Harvard business strategist Michael Porter, who argued that healthcare should focus on value for patients, defined as “health outcome per dollar of cost expended.”1 Competition in the US healthcare system, he argued, had failed because it did not focus on value. Although aimed at the US system, his terminology was widely adopted. In the United Kingdom, new NHS policies were presented in value terms. Paying hospitals by activity was termed “payment by results,” and the system for paying family doctors for specified activities was titled Quality Outcomes Framework. Value based pricing for branded drugs, which will come into force in 2014, is part of this trend. Although the system was intended to improve access to new drugs, the decision to include wider societal costs in the assessment of value could have unintended consequences.
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Published date: 11 October 2013
Organisations:
Primary Care & Population Sciences
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Local EPrints ID: 368612
URI: http://eprints.soton.ac.uk/id/eprint/368612
ISSN: 0959-8138
PURE UUID: 538077ab-91a0-458a-8e25-5441f1881e8a
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Date deposited: 06 Sep 2014 13:53
Last modified: 14 Mar 2024 17:50
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