The case examples in particular are very consistent in highlighting what works in terms of policy instruments: the economic means that are emphasized as the main policy instrument in the VBHC literature are utilized in each one, but their steering capacity is very limited—financial incentives only cover 1–5% of the remuneration. The case examples also do not rely on regulation. Instead, they are all based on continuously utilized information—the regular tracking and evaluating of outcomes and systematic dialogue about the data and the outcomes to ensure the continuity of the steering process, and, in the end, the cost-effectiveness of the services.
Based on the case analysis we identified three essential parts: (1) the principles of value-based steering; (2) the steering process; and (3) the Value Steering Canvas.
Figure 1 illustrates the principles of steering. Based on the cases, outcomes and cost data collected from customers and patients are the engine of the entire steering system, and all the policy instruments are connected to the data. The commissioner obliges the service providers to collect the data, which is then pooled. The commissioner utilizes the data to inform the service providers and professionals about the outcomes of the services, and to allocate resources. The commissioning body can create reimbursement models for service providers based on their outcomes or use it to reframe the budget, which can mean either rewarding for performance or supporting services where outcomes are below target. Dialogue builds trust and mutual understanding, modifies and strengthens steering, and fills the inevitable gaps in the data.
The principles of steering, in essence, answer the question of how outcomes data can be utilized in defining the vision and objectives and coupled with steering mechanisms.
Figure 2 illustrates the process of steering. It describes how the steering model is built and maintained. First, the commissioner defines concrete large-scale objectives. Then the population is segmented (based on their service needs) and objectives are defined for each segment and for each type of service provider.
Based on the case analysis, the main difficulties in creating a value-based service system is aligning the objectives of patient segments with the objectives of service providers. The system is based on customer segmentation, but the steering is directed at the service providers. A service provider may have various patient segments with varying objectives. As an example, a health center may be responsible for non-severe acute patients and chronic patients.
In addition, a single service provider may take care of only part of the care or service pathway. Thus, service pathways will require integration and coordination. In practice this means that the role of the service provider in the care pathway has to be taken into account when defining the outcomes objectives. In addition, the network of service providers is developed through interaction between the commissioner and the service providers, that is, using information and dialogue as policy instruments. Finally, the content and the process of steering, as well as the objectives, are evaluated and renewed based on the outcomes data.
The process of steering answers the question of how individual-level outcomes (n = 1) and service providers caring for many different patient segments can be coupled.
Figure 3 illustrates the third part of the steering model, the Value Steering Canvas (VSC), which can be used as a tool when designing and implementing a value-based steering model. We modelled the VSC loosely on the Business Model Canvas, originally introduced in 2005 by Osterwalder [31]. The VSC is a tool for the commissioner to design the details of the value-based steering of both the provider and the patients, and to help align the goals of the patient segments with the incentives of the providers.
The VSC combines the most relevant attributes of the service provider and the customers/patients. It takes into account the goals of the service provider as well as the needs of the patient segments. It includes 9 elements or boxes. The titles of the boxes as well as the descriptions of their intended content are described next. It should be noted that the detailed content of the boxes in Fig. 3 is only meant as an example and is not based on research.
At the top of the VSC, the provider is named. The left-hand side of the figure represents the service provider.
Services
describe the services produced by the service provider for the commissioner. Only services potentially aimed at the same patient segments should be listed here. If the provider is large, there may be many more services produced, but unless the patient segments overlap, these should be ignored (or rather, they are the building blocks of another VSC). When the commissioner and the object of steering are different organizations, there is usually a contract between them that regulates the service production. As a rule of thumb, there should be one VSC per contract. For example, the services listed here could be outsourced primary healthcare outpatient services. While the provider may also produce home care, unless this is part of the same contract or otherwise tightly coupled to the provision of primary healthcare services, this should be ignored.
Role & relationships
describes the role of this particular service provider within the network of service providers serving the same patients, and its relationships to these other providers. For example, other service providers in the care path of the same patients should be mentioned here. In our example of primary care, this box could include secondary care providers to whom this provider refers patients.
Goals
describes the ultimate goals of the service provider. These depend on whether the provider is for-profit or non-profit, and whether it is part of the same organization as the commissioner (internal) or not (external). These attributes affect the intrinsic incentives of the provider.
The right-hand side of the figure represents the patients.
Patient segments
describe the patient segments served. Again, only the relevant ones should be included. In our example, the provider serves only adult patients, which should be mentioned in this box. The patients should be segmented in a meaningful way, preferably (as outcomes are relevant here) based on their service needs in a way that is meaningful in terms of their expected outcomes.
Objectives
describe the relevant objectives for the patient segments. The objectives should be thought of in terms of outcomes—they should conceivably lead to better outcomes. For example, for the chronically ill, good control of the disease is usually a meaningful objective, as it is in many cases statistically linked to fewer adverse outcomes. For example, good HbA1C control in diabetes mellitus is linked with fewer vascular and renal complications. It should be noted that the objectives are usually different for each patient segment.
Needs
describe the high-level needs of the patient segments, that is, what they need in order to reach the objectives. Again, these are usually different for each segment. For example, for diabetes patients to reach good control, they need continuity of care, which could mean their own personal nurse (and/or physician) and a written care plan.
Relevant outcomes
are a synthesis of the opposing sides: they are the overlap between what the patients need and what the service provider does. The outcomes are at the heart of the steering model: they are what is measured, and they are what the incentives aim at.
Outcomes-based steering of the provider
includes the outcome metrics and the steering instruments through which the commissioner steers the service provider. This includes all the steering instruments, such as economic instruments (bonus/sanction model), information (measuring outcomes and sharing the information), dialogue (forums for discussing the outcomes), and regulation (contracts and other norms).
The economic instruments often revolve around a bonus/sanction model, where economic incentives are coupled with outcome measures. This is the case for Santeon hospitals, which receive 95–105% of their base tariff from the payer based on the outcomes reached.
Coercive policy instruments are often thought to be the strongest ones, but regulation has its limitations. Each contractual obligation needs a potential sanction for failure to comply, otherwise it is meaningless. Therefore, it is essentially a bonus/sanction model without the bonus [13]. Even so, things that can and should be regulated from the point of view of value-based steering include measuring the outcomes and sharing the data: only comprehensive data can fuel the steering engine, ensuring that the policy instruments relying on the outcomes data operate on reliable information.
Healthcare professionals, almost without exception, have high moral standards and an obligation to their patients, which is a strong motivator. Therefore, information steering in the form of sharing data is a particularly efficient policy instrument in the context of healthcare. A simple thing such as measuring disease control and reporting it per professional is usually enough to make the professionals benchmark against each other, striving to learn from their more successful counterparts. Any manager reporting such results to their employees should handle it with great discretion, so as to avoid ranking the professionals or blaming the ones with poorer outcomes. Case mix should be taken into consideration, and wherever possible, the set of measures should be all-encompassing so that everyone excels at something.
Outcomes-based steering of the patients
describes the means of steering patients, and the responsibilities (service provider or commissioner). Both commissioner and service provider play a role in steering patients toward better outcomes. Typical things to consider here are lifestyle choices, such as nutrition and exercise, which are paramount for achieving good outcomes, yet both the commissioner and the service provider have at best a limited possibility of influencing them.
We suggest that the VSC be used by the commissioner for creating a value-based steering model for a service provider. The VSC can be used as a blueprint for negotiations between commissioner and service provider, thus creating a win-win situation.