Value-based healthcare in the GCC: how changing our philosophy could drive better patient outcomes

For healthcare providers, governments, regulators and, of course, patients, improving the delivery and outcomes of healthcare against the backdrop of fast-growing populations and chronic disease is an urgent goal. But a fundamental shift in the philosophy behind healthcare is required. Part of that essential restructuring is to align stakeholders behind a philosophy promoting results and prevention rather than activity and volume. That is, it’s far more sustainable to pay providers for results –patient outcomes – than to pay out large sums based simply on activity and treatment volumes.

With that in mind, and considering the UAE’s over-supplied market, healthcare providers in the region are looking at models that can deliver on those aims while maintaining financial viability. And value-based healthcare – a model that delivers the highest possible return on healthcare spend – is becoming a crucial element of GCC nations’ masterplans when designing their future economies and improving their populations’ health so that economic visions can be delivered successfully. Patients experience better outcomes, payers see more value for money and less waste, and government health ministries can better plan for sustainable healthcare.

Value-based healthcare (VBHC): what is it?

Although cost reduction is a desirable outcome in value-based healthcare, and one that aligns with many of the features of a value-based system, the predominant goal and philosophy of the VBHC model is to create more value for patients by improving patient outcomes. As one academic research paper notes, “if the real goal of value-based health care were cost reduction, pain killers and compassion would be sufficient.” In other words, a system creates value by pursuing better patient outcomes, and only by pursuing better outcomes.

The brainchild of Harvard University Professor Michael Porter, VBHC is designed to restructure global healthcare systems, “with the overarching goal of value for patients – not access, cost containment, convenience, or customer service”. The metric used for determining value is therefore relatively simple: prioritising and optimising patient outcomes relative to the costs of achieving them. In short, patient health outcomes per dollar spent.

As such, VBHC emphasises the right care by the most appropriate provider in the most suitable setting, in combination with good and effective management of the population’s social risk factors, socio-economic conditions and general health.

How is VBHC being implemented elsewhere?

In the UK, the University of Oxford’s Centre for Evidence-Based Medicine (CEBM) drew attention back in 2019 to the problems involved with large, sluggish, top-heavy legacy health systems where restructuring is painfully slow. These systems, it said, were unable to agree on a definition of the concept and noted that “the lack of skills required to deliver value-based healthcare and a clear understanding of the barriers to effective development and implementation inhibits the health system in addressing problems.” And the problems it identified? Overdiagnosis, too much medicine, sloppy resource allocation and expensive technologies that hadn’t been assessed or evidenced sufficiently.

Elsewhere in Europe, some are witnessing increasing success from implementing value-based systems. Sweden is an exemplar when it comes to the VBHC model, and unlike other legacy systems, its ability to keep track of its population’s health data through the establishment of several hundred national quality registries some twenty years ago has, along with the widespread digitalisation of healthcare, positioned the country to more readily and easily adopt an effective VBHC model fit for the population’s future needs. As The Economist’s Intelligence Unit notes, “with its disease registries, electronic records and plenty of real-world data…the potential for further development of the use of predictive analytics, machine learning and applications for artificial intelligence (AI) is enormous.”

Sweden’s healthcare model has historically been informed by its strong social democratic traditions, with egalitarianism fiercely protected under healthcare legislation. National taxation provides the primary funding for healthcare and, as such, is founded on broadly similar principles to the UK’s free cradle-to-grave National Health Service (NHS). But Sweden’s 21 regions oversee delivering healthcare and paying for it, and that degree of decentralisation has allowed for some experimentation to find new ways to address the challenges faced by developed nations. GCC coutries face many of the same challenges, including ageing populations, growing levels of chronic disease and pressure on healthcare budgets.

As the managing director of the Swedish Institute for Health Economics puts it, “the regions are free to organise the delivery of healthcare within the bounds of the law. Otherwise, there is a free mandate as to whether to provide it themselves or to rely upon private providers.”  Sweden’s speed of adoption is therefore partly predicated on this decentralisation, as is its ability to experiment at a regional and even local level. As the Swedish Institute for Health Economics notes, “if we talk about organising healthcare along value-based lines, there is nothing at the national level.”

Alternative payment models have led Sweden’s primary-care sector to encourage providers to pursue results and efficiencies rather than simply activity and volume. The Economist reports that payments tend to be based on capitation for registered patients, arrived at via an estimate of the so-called illness burden. Across Sweden’s local government authorities, the vast majority have now established risk-adjusted capitation with an eye on the fact that some primary-care providers will inevitably be operating in areas with challenging socio-economic conditions.

What does this mean for the GCC’s healthcare philosophy?

The advantage for many GCC nations is that they’re not burdened by cumbersome legacy healthcare infrastructures and are therefore more agile when it comes to transforming and restructuring these vital systems. What’s more, health spending in the region is increasing at a faster rate than in western economies across the EU and North America, making the move to value-based healthcare an increasingly attractive proposition. Saudi Arabia is set to see an annual growth rate in healthcare expenditure of almost 10% between now and 2029, with the UAE close behind at 7%.

Saudi Arabia enjoys a degree of decentralisation that partially reflects Sweden’s model. Recent organisational and operational reforms in KSA have shifted the Ministry of Health from a regulator and provider to an exclusively regulatory and supervisory role. These changes have passed responsibility for the delivery of healthcare to a “health holding company” (HHC), which controls and manages all public healthcare provision. Independent companies now form health clusters, acting as corporatised public bodies, to deliver public healthcare. With the power to offer tenders and contracts to private operators in exchange for managing and operating these independent health facilities, these health clusters can partly replicate Sweden’s regional model. In other words, they can, in theory at least, act autonomously and experiment with value-based healthcare at a more local level.

The UAE is embracing a value-based system that puts patient outcomes at the heart of its operations. With an eye on extracting maximum efficiencies from available resources to pursue better patient outcomes, we’re seeing big government investment into a combination of preventative care and digitalisation, to understand and target population groups with specific medical demands. That’s partly why mortality rates in the UAE are dropping and bed availability is on the rise.  

Wholesale restructuring never happens overnight, but one way the GCC region can help shift the philosophy towards a value-based system is to incorporate the VBHC model into the curriculum of medical schools. Austin’s Dell Medical School in Texas offers a good example of how VBHC can be worked into and woven through a medical degree. Students there learn about physicians’ changing roles within multidisciplinary teams, and their clinical rotations expose them to real-world experience of VBHC in action. This immerses medical students in the principles of better patient outcomes and care solutions and prepares them to apply those principles in the practice of medicine and sustain the restructuring of healthcare systems towards a value-based model.

The philosophy of better outcomes

As the region’s healthcare moves towards a digitalised, data-driven value-based model, we’re likely to see more resources dedicated to prevention and wellbeing. But it’s important to recognise that the restructuring of healthcare is not a single action but an overarching strategy that should inform every process and decision.

What’s certain is that if the UAE, GCC and the wider MENA region are to deliver healthcare systems that are fit for purpose, we need a wholesale change that creates and ingrains a sustainable model that can carry the region’s healthcare delivery successfully into the next century.

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