Jonathan Andrew on measuring value

A system that compares value for money across healthcare systems is vital, argues Jonathan Andrew

Although healthcare systems vary greatly in nature across the Western world, a theme common to all is the challenge posed by affordability.

Modern healthcare regimes must deliver value for money without compromising on the quality of services they offer - which means making use of qualified professionals, up-to-date facilities and the latest technology.

Given the range of factors weighing on budgets ? withdrawal of state funding, ageing populations, increasingly high consumer expectations, shortening technology obsolescence cycles and rising consumption ? it is obvious these systems must evolve rapidly to meet new demands.The public sector is now also expected to compete with the emerging private healthcare sector, especially in the UK. To do this it needs the facilities and technologies to improve the quality and efficiency of medical diagnosis and treatment.

However, rising demands on pressurised revenue budgets are suppressing the ability to make capital purchases.

Irrespective of the mix of private versus public funding, the issue is how healthcare providers best use the finance available to invest in the tools and equipment they need to deliver effective and efficient patient care.

In order for global healthcare systems to progress, a simple method of comparing the value for money delivered by existing systems must be created, depoliticising the provision, management and funding of healthcare, and giving healthcare managers and clinicians a shared method of working to an affordable common good.

No such cross-border comparative measurement of healthcare system performance exists. Without a common standard, it is useless to demand of healthcare management professionals that they 'share best practice' and improve performance.

A new Siemens Financial Services research paper has constructed a basic healthcare value metric, following efforts by the World Health Organization to create a global measurement model in 2000. It is hoped it will be refined by experts in healthcare system management.

The index value employed in the study suggests that Germany's healthcare system offers a comparably good return on investment in relation to those of other countries - in terms of basic healthcare provision, life expectancy and cost.

The UK, however, lags behind Germany, Italy, Spain and France in providing value for money. The US finds itself in bottom place for the list, spending the most on healthcare out of all the countries studied, but delivering the least.

Furthermore, the new research paper estimates the amount of capital that is 'frozen' in global healthcare systems at more than ?30bn annually. When equipment is bought outright rather than leased, hired or otherwise financed, money that could be otherwise deployed to the benefit of society is left tied up in capital budgets.

In Europe alone, ?10bn of taxpayers' and private companies' money is lying inefficiently frozen in medical equipment assets that are likely to be technologically superseded in a few years' time. In a business environment where healthcare budgets are tight, this is unacceptable.

Although some areas of healthcare costs will require politically radical, long-term solutions, others - such as technology purchasing - may be addressed in a more immediate fashion, with short-term, bottom-line benefits. Modern healthcare systems must take advantage of this if they are to rise to the challenge of affordability.

Jonathan Andrew is chief executive, Siemens Financial Services