Value and values in healthcare
More and more professionals feel the moral transition permeating their profession and ask themselves the question: is business value still enough? What does it mean to also focus on societal values?
Then I say: look at healthcare.
Author: Xander Koolman
Healthcare in the Netherlands is largely organised through private organisations. Hospitals, clinics, pharmacies, suppliers and insurers must remain economically healthy. They have to stay in the black, build up sufficient reserves, be able to make investments, attract staff and sometimes raise capital. Not all of these organisations are profit-oriented. Sometimes making a profit is even formally ruled out. But even then, they remain private organisations, with their own interest in ensuring continuity, their own financial incentives and their own ways of passing on risks or retaining revenues.
You see that in hospitals, for example. They are usually non-profit, but an important part of medical production and decision-making runs through the medical specialist company. Crucial choices are made there, and that is where financial returns can indeed accrue to the partners. In this way, public values and private interests in healthcare are constantly intertwined.
At the same time, society expects these private organisations to achieve public goals: quality, accessibility and affordability. The latter is particularly complicated, because affordability is rarely in the direct interest of an individual provider. A hospital does not automatically benefit from less production. An investor does not automatically benefit from lower margins. A professional does not automatically benefit from a system in which doing less is sometimes better care.
'As soon as we try to translate societal values into rules, indicators and financial incentives, there is a risk that we will mainly reward what is demonstrable, countable and verifiable, not necessarily what is really of value.'
That is why a huge system of legislation, supervision, funding, contracting, quality indicators and accountability has been built around healthcare. All these mechanisms try to steer private organisations in the direction of public goals. That is understandable, but also vulnerable. Because as soon as we try to translate societal values into rules, indicators and financial incentives, there is a risk that we will mainly reward what is demonstrable, countable and verifiable — not necessarily what is really of value.
'On paper, this can result in a neat economic analysis. But in the meantime, you ask that nurse, doctor or care worker to live with the consequences. '
There is something else. Suppose we approach all this as economists often do: by rationally weighing up consequences. Then you can calculate, for example, what an extra nurse on the night shift costs. You can try to calculate how many incidents are prevented by this, how much harm to health is avoided and whether the benefits outweigh the costs. On paper, this can result in a neat economic analysis.
But in the meantime, you ask that nurse, doctor or care worker to live with the consequences of such a trade-off. To stand alone at a moment when she knows that someone should have been standing next to her. To bear professional responsibility within an organisation that has calculated away its moral space. You can’t just put that on the professional’s plate.
That’s exactly where the tension lies. On the one hand, there are financial and organisational goals: continuity, solvency, return and efficiency. Behind these lie the system goals: quality, accessibility and affordability. And running right through them are the professional norms and values of healthcare providers: providing good care, preventing harm, being close and taking responsibility for the patient in front of you.
'The patient can get stuck between financial interests, organisational logic and public ambitions.'
We economists are in the middle of that game. We help make trade-offs visible. We use calculations to assess efficiency, budget impact, incentives and distribution. This is valuable, but also dangerous if we forget that not everything that matters can be neatly calculated. The patient can get stuck between financial interests, organisational logic and public ambitions. The professional can get caught in the wringer between what the system rewards and what good care requires.
My lesson to that alumnus would therefore be: putting societal values at the centre does not start with a better slogan, but with acknowledging tension. Between return and public responsibility. Between the short term and the long term. Between measurable performance and moral obligations. And between the interests of the organisation, society, the professional and the patient.
'Putting societal values at the centre does not start with a better slogan, but with acknowledging tension.'
That tension does not disappear. It requires alignment, boundaries and the willingness to compromise. Also at the expense of shareholder value. If that willingness is lacking — for example, on the part of an investor who wants to get the maximum return from a healthcare organisation in the short term — we must dare to say that such a form of ownership is not suited to healthcare.
This also requires something from economists, directors and professionals who work in or around healthcare. Not just technical expertise, but professional ethics. Where is the balance? I cannot prescribe it in general terms. But I do know one thing: if you don’t think about it consciously, you will certainly not strike that balance.
Xander Koolman is Professor of Health Economics and Head of the section of Health Economics at Vrije Universiteit Amsterdam. He obtained his PhD from Erasmus University Rotterdam in 2006 and subsequently worked at institutions including Delft University of Technology, and was affiliated with both the Harvard School of Public Health (2007) and the Department of Economics at MIT (2010-2011). Koolman teaches, among other things, on dilemmas in pharmaceutical markets. His research focuses on the accessibility and efficiency of healthcare systems. Through his analyses of healthcare reforms and inequality in access to care, he informs the policy debate on affordable and accessible healthcare.
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