Value is the defining topic in health care, but do we really know what patients consider valuable?
At the most basic level, value is a calculation that weighs benefits against costs. We all make these mental value calculations daily on dozens of topics (e.g., buying branded vs. off-brand paper towels or deciding if a new streaming service is worth it). But how do we make these calculations when it comes to our health care?
This raises some basic questions. What are benefits? What are costs? What are the ways in which people assess the tangible and intangible costs and benefits of their own health care?
Reservoir set out to answer these questions through a year-long research project that aimed to develop a quantitative model that identifies the universal drivers of how patients perceive value across multiple health care sectors and products. We began by digging into the existing body of work around value and conducted focus groups and interviews with leading experts. This research helped to inform hypotheses of the attributes that patients consider when assessing both sides of the value equation: the perceived benefits vs. the perceived costs. We ultimately arrived at nearly 100 discrete attributes.
We then conducted a survey with 1,000 patients across a wide range of medical conditions from rare disease to chronic illnesses to those needing acute care for an injury. Respondents rated the attributes across one of five different health care sectors (biopharma, health insurance, device, diagnostics, hospitals and physicians). We were seeking to build a model that provides the broadest framework to understand the universal attributes of how patients assess value across the entire health care ecosystem.
The first and most important step in analyzing the data across all of these attributes was to determine how certain attributes cluster together to help define an underlying latent concept. We applied advanced factor analysis and partial least squares analytics to identify the common and distinct drivers of both sides of the value equation (benefits and costs) and the relationships between them.
We discovered that at the highest level, benefits are defined across three key dimensions: individual, emotional and societal. These dimensions break down further into thirteen unique drivers measured by 39 individual attributes measured in the survey. For example, attributes focused on treatment success, reliability and alleviating pain naturally clustered together into the “Efficacy” driver. The cost side of the equation is comprised of three key drivers: individual, intangible and system costs, measured by 13 individual attributes. Many attributes didn’t make the cut because they were statistically poor measures of value. This model provides a window into how patients conceptualize the benefits and costs of health care. With this window, we can better advise clients on how to most effectively communicate their value proposition.
When assessing the benefits side of the equation, we discovered that the top two drivers are what we call “Humanity” and “Peace of Mind.” Humanity is about how health care products and services create a personal connection to patients by treating them like individuals, understanding their needs, and being seen as an advocate for them. Peace of Mind is a perception that the health care product or service provides freedom from fear and anxiety, making patients feel safe and secure. When patients assess value, clinical outcomes are important, but they are a threshold expectation. Evoking an emotional benefit (Peace of Mind) and a personalized relationship (Humanity) is more likely to trigger a differentiated value proposition.
The hierarchy we identified across the entire spectrum of health care sectors looks different depending on the individual sector, as well as individual therapeutic areas, products, service offerings and all other parts of the health care system that seek to demonstrate a patient-centric value proposition. The Health Value Quotient model is a framework for helping companies understand the value equation for their patients. How can Reservoir’s Health Value Quotient support your organization? Get in touch with me via email.