Bridging the Gap

Module 7


The Value Equation in Healthcare


The US healthcare system suffers from high costs that do not yield commensurately high levels of quality. One of the unique aspects of healthcare in the United States is the way it is financed. Many other countries have one publicly administered universal insurance provider. In the US healthcare is financed through a multitude of public and private insurace programs administered by purchasers. The primary purchasers are Medicare and Medicaid for public care programs, and employers or purchasing cooperatives for private healthcare programs. These purchasers subsidize, arrange and contract for the cost of healthcare services received by their beneficiaries.

In the past two decades these purchasers have become more active in the purchasing process, becoming more interested in the quality and cost of services provided. This shift to value-based has never been more needed after several years of increasing healthcare premiums. These increases come at a time of economic uncertainty and have prompted many purchasers to insist on high quality care at more reasonable cost. It is important for you to understand the current climate in which every healthcare organization, health plan, hospitals, physician practice, even employers are in the process of transitioning to value-based care and alternative reimbursement models.


By the end of this module the learner will be able to:

  • Explain the components of healthcare value equation.
  • Describe the goals of value-based purchasing.
  • Give examples of activities associated with value-based purchasing.
Content Outline
  1. The healthcare value proposition
  2. Goals of value-based healthcare purchasing
    1. Improved final outcomes
      1. Improved health status
      2. Greater satisfaction with health plans and care delivery
      3. Lower cost
      4. Greater competitiveness in the labor market
    2. Improved intermediate outcomes
      1. More consumers choosing high quality plans
      2. More appropriate utilization of services
      3. More evidence of healthy behaviors
      4. Fewer medication errors
  3. III. Strategies to improve healthcare value
    1. Change behaviors and Decisions of Individuals
    2. Change the performance of healthcare organizations and practitioners
    3. Improve the use of data and information for purchasing and payment
Links to Differentiated Essential Competencies
  1. Member of the profession
    1. Assume responsibility and accountability for the quality of nursing care provided to patients families and communities
  2. Provider of Patient Centered Care
    1. Use clinical reasoning and knowledge based on the baccalaureate degree nursing program of study, evidence-based practice outcomes, and research studies as the basis for decision-making and comprehensive patient care.
    2. Evaluate and report patient, family, population, and community outcomes and responses to therapeutic interventions in comparison to benchmarks from evidence-based practice and research findings, and plan follow-up nursing care.
  3. Member of the Healthcare Team
    1. Coordinate, collaborate, and communicate with patients, families, populations, communities, and the interdisciplinary health care team to plan, deliver, and evaluate care.
    2. Communicate and manage information using technology to support decision making to improve patient care and delivery systems
Links to Texas Concept Based Curriculum

Concepts Professional

  • Communication
  • Professionalism
  • Teamwork and collaboration

Concepts Health Care System

  • Healthcare Organizations
  • Evidence-Based Practice
  • Health Policy
  • Health Information and Technology
  • Leadership and Management
  • Quality Improvement

American Association of Preferred Provider Organizations (2014). AAPPO study: Consumer-driven health plans grew by 15 percent last year [news release]. Washington, D.C. Retrieved from

Bundorf, M.K. (2012). Consumer-directed health plans: Do they deliver? Robert Wood Johnson Foundation, Retrieved from .

Federal Register (2011). Medicare program; hospital inpatient value-based purchasing program. Final rule. May 6; 76(88):26490-547. Centers for Medicare & Medicaid Services (CMS), Health and Human Services.

Geisel, J. (2015). Enrollment in high-deductible plans continues to rise. Business Insurance.

Retrieved from

Japsen B. (2015). UnitedHealth's $43 billion exit from fee-for-service medicine. Forbes. Retrieved from http://

Japsen B. (2015). Value-based care will drive Aetna's future goals. Forbes.

The Centers for Medicare and Medicaid Services (2017). Core Measures. Retrieved from

Discussion Questions

Do you think that incentive payments for healthcare really improve the overall quality of care?

How do patient satisfaction and evidence-based pratice and core measures affect hospital peformance on cost and quality?

As a student how might you find out what performance measures are important that impact hospital reimburmesement on the unit where you do your clinical rotations?