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Posted on 04 Jun 2019

Value based health care (VBHC) has been in the spotlight here at VAHI recently, as we’ve been looking at what’s happening abroad, interstate and right here in Victoria.

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What is value based health care?

Value-based health care (VBHC) is a way of organising health care to maximise the outcomes that matter to patients, relative to the end-to-end costs of their care. It does this by taking a long view – considering value not based on a single healthcare encounter, but in terms of the outcomes of a full pathway of care and the resources involved along the way. VBHC also takes a system view: instead of asking an individual clinician to work harder or do better to improve care, it looks at how all aspects of a health system can enable better value in care delivery.

In a value-based healthcare system:

  • patients have their needs addressed in an integrated way
  • clinicians have the data they need to continuously improve care
  • organisations have incentives that are aligned with value for patients.

VBHC is on the rise in Australia, with statewide uptake in New South Wales and successful pilots in cancer and dental care in Western Australia and Victoria, respectively. This follows almost a decade of accelerating uptake around the world, as health systems have turned to VBHC as a strategy for dealing with challenges such as:

  • a growing and ageing population
  • increasing rates of chronic disease
  • health inequality in the population
  • rising healthcare costs
  • unwarranted variation in care and health outcomes
  • increasing patient expectations.

International learnings

Kira Leeb, Executive Director, Health and Systems Performance Reporting at VAHI, joined an international study tour on VBHC at the end of April. Kira visited organisations across Sweden, the Netherlands and the United Kingdom, to learn from them about their approaches to VBHC.

Kira observed the VBHC cycle – meeting the people who developed and maintain the data and information systems that support VBHC, and the clinicians who regularly use the data as part of their practice improvement process.

Drawn from the organisations she visited on the study tour, Kira listed her top six factors for success in implementing VBHC: 

  1. Having supportive leadership at all levels, to maintain VBHC as the strategic direction.
  2. Having clearly defined goals, including why the initiatives are being undertaken.
  3. Using a robust measurement system, that brings together high quality, reliable data from multiple sources.
  4. Monitoring and feeding data back to providers, clinicians, patients and other stakeholders.
  5. Making available educational material and support in using the data—to both clinicians and consumers (improving data literacy).
  6. Ensuring accountability for ‘actioning’ results generated from the monitoring system.

‘While these principles are valuable, the overarching message of “just get started” was probably the most powerful – these organisations have been able to learn, adapt and refine since beginning their VBHC journey – most at least five years or more ago,’ said Kira.

Value based healthcare in Australia

To understand more about the data and information management systems Victoria may need to support VBHC, VAHI discussed the current state of VBHC systems in Australia at the inaugural meeting of its Strategic Advisory Committee on 20 May 2019.

The Strategic Advisory Committee consists of 13 expert members from across the Victorian and Australian health sector. It will advise the agency on issues and challenges of long-term significance and how VAHI may position itself to deal with them in future. 

The Committee heard from member Dr Jean-Frederic Levesque, CEO of the Agency for Clinical Innovation (NSW). New South Wales is widely considered a VBHC leader in Australia, and the agency he leads has been instrumental in supporting the implementation of various NSW Health-led VBHC initiatives. These now include statewide initiatives involving all local health districts improving value across a broad range of patient cohorts – inclusive of diabetes, renal, musculoskeletal, cancer, respiratory disease and other conditions. Significant investments in data systems have accompanied this, to be rolled out in the near future.

Jean-Frederic outlined the main challenges NSW is facing in expanding and embedding work in VBHC. Many of these relate to the notion that ‘value is easier said than measured’.


  • The VBHC system needs to measure both patients’ experience of care and their outcomes. Experiences are equally important as outcomes yet they are more difficult to consider as part of the value endeavour, so outcomes have traditionally taken precedent in assessment of the benefits of value-based approaches.
  • Measurement of outcomes need to shift from the simple measurement of ‘quality of life indices’ to broader assessment of value, by asking questions such as: ‘What is important to you in your care?’ ‘Were you asked about what you wanted?’ ‘Within what is feasible, did your care deliver what was important to you?’
  • Value for a patient as an individual is sometimes at odds with value for most patients. Population-level outcomes are important but can conflict with individual values and outcomes – achieving a balance between an individual and a population approach can be difficult. 
  • Current measurement frameworks focus on performance, not necessarily value. Ensuring the measurement of aspects including access and appropriateness contribute to measuring value.

Early progress in Victoria

The Committee also heard from the Health Reform Office at the Department of Health and Human Services (the Department) about VBHC in Victoria.

The first major implementation of VBHC in Victoria has been at Dental Health Services Victoria (DHSV), where a proof-of-concept pilot is underway. Early results show significant increases in preventative interventions and clinicians working to the top of their scope of practice, along with a reduction in low value care, and improved patient appointment attendance. A pioneering collection of patient outcomes is showing promising results, and DHSV is now working to scale this model of care.

Further VBHC work is currently being explored by clinician groups (e.g. the Victorian Stroke Clinical Network) and health services (e.g. Peninsula Health, for musculoskeletal care), with the aim of further improving outcome and resource use for reinvestment in improving patient care.

Within the Department, Safer Care Victoria and VAHI, work is underway to better align system levers with value, in support of these projects and others. This includes a focus on workforce capability and culture, development of integrated data collections and information systems, care integration, flexible funding and value-based performance accountabilities, with a focus on social determinants embedded throughout all of the above.

Committee members shared their experiences and perspectives for what VBHC could look like in Victoria, agreeing on three key ingredients:

  1. Being able to access linked data – including primary care data held by the Commonwealth and data from private hospitals – for measurement of health outcomes across the entire health system.
  2. Investing in effective preventive and population health strategies – with the result that fewer people develop and need care for multiple chronic conditions.
  3. Including the patient voice throughout the model, to ensure care is meeting patient expectations.

As VBHC gains momentum in Australia, VAHI’s investment in clinical quality registries and the Victorian Healthcare Experience Survey are just some initial data sources that could support the successful implementation of VBHC in Victoria. The next steps for investing in data and information management systems will result from continued discussions across Victorian health agencies, and with our interstate and international partners. 

Stay tuned for more information on VBHC in future issues of VAHI news.