case value equation
How Utah Defines Value Using the Value Equation
Instead of allowing external performance measures to define our success, we define success by reliably delivering the best possible care with empathy, coordination, and efficiency at the lowest possible cost.


2001: Starting with Quality

Early quality metrics were mostly process metrics that measured compliance with evidence-based guidelines.

Our efforts to improve quality shifted from a focus on accreditation to delivery of Centers for Medicare & Medicaid Services’ (CMS) first round of publically reported measures of quality and safety. We used the measures as a starting point to improve patient care. The result was compelling improvement. Over four years, Utah moved from middle of the pack to #1 in quality in the competitive University HealthSystem Consortium (UHC) Quality and Accountability Scorecard in 2011. For the past seven years in a row, Utah has achieved a top-10 ranking from UHC (now Vizient) by organizing and improving across hundreds of measures of quality.

2009: Adding Service

Despite improving outcomes, our patients continued to struggle with the system. They found it difficult to find the right providers, to schedule appointment in an appropriate timeframe, and they spent time waiting and waiting for care. Inpatient stays were marked with uncertainty and confusion. Although guidelines were consistently followed, patients felt disrespected by both the process and care teams. In 2009, Senior Vice President A. Lorris Betz, MD, PhD, challenged the organization to provide every patient with an exceptional experience, every time. He believed that “healthcare is not truly great unless the patient thinks it is.”

“Healthcare is not truly great unless the patient thinks it is.”—A. Lorris Betz, MD, PhD

Across the system, providers and teams began intently listening to their patients. Through feedback, both inpatient and outpatient teams organized to meet patient needs and improve the consistency of experience. Care became more efficient, coordinated, and compassionate. Our organization came to understand that quality included both the outcomes achieved and the experience of care.

2012 Defining Value and Understanding Cost

Senior Vice President Vivian Lee, MD, PhD, MBA, took the helm as the system’s senior leader in 2011. She celebrated the system’s success with both quality and service, and brought a new challenge. Could we deliver the best outcomes and service at a lower cost? In 2014, Dr. Lee wrote we must focus “on the fundamentals—the continuous pursuit of quality and service with a stronger emphasis on efficiency, cost, and effectiveness” and “the time has come to measure the costs of our care delivery, to assess our outcomes in the context of the costs required to achieve them, and to manage our health care system with the efficiency and effectiveness our country and our patients deserve.”

The time has come to measure the costs of our care delivery, to assess our outcomes in the context of the costs required to achieve them, and to manage our health care system with the efficiency and effectiveness our country and our patients deserve.”—Vivian S. Lee, MD, PhD, MBA

Value would be defined as an equation, which would include both numerators of Quality, Service, and a denominator, Cost. Improvement in any one area must be weighed by the impact on the others. The definition moved Value from an abstraction to organizational focus.

Making Cost Visible

In order to rapidly improve, we needed to understand our costs. There are legitimate barriers to understanding costs in healthcare. The most significant barriers are the complexity of cost accounting systems and the difficulty in accurate attribution to individual physicians. Dr. Lee challenged leaders from Decision Support, the Enterprise Data Warehouse, and Medical Informatics to overcome these barriers. The result is Value Driven Outcomes (VDO), a nationally recognized analytics tool which identifies the root causes of low value (Get the VDO backstory on Algorithms for Innovation). This tool puts cost information in the hands of individual providers and improvement teams to empower value-driven decision making—empowering hundreds of healthcare workers to make the right changes for their patients’ value stream.


Singular Definition

Michael Porter and Tom Lee called organizations to action in their article “The Strategy that Will Fix Healthcare”. We have defined value through the Value Equation. Clarity on this premise allows our organization to overcome perceptions of mission conflict and to focus our efforts, decision making, and resource allocation on achieving our true north—improving value for patients.

Importance of Ratio Thinking

A ratio is defined as the measure of one input in terms of the other. Pursuing value means measuring costs and outcomes (VDO), and working to improve both. We can no longer afford time nor energy wasted in pursuit of isolated improvement. Improving quality without careful understanding of cost, or reducing cost without measuring impact on outcomes or experience decreases patient value. Once clinicians, teams, and the organization have the measures at hand, finding solutions that improve one or more outcomes without raising costs or lowering quality becomes the norm. Using ratio thinking, the consequences of improvement become more reliable, more predictable, and more intentional.

The Future of Patient Reported Outcomes

As we focus on value as an organization, there is a need to expand our measures to identify clinical and patient-centered outcomes in addition to process measures of quality. With the focus expanding beyond the episode of care (e.g., clinic visit, inpatient admission), we have the opportunity to define success as achievement of the patient’s desirable outcomes. Defining and collecting patient-reported outcomes is our next step in the value journey.


Mari Ransco

Editor-in-Chief, Accelerate Learning Community; Senior Director, Patient Experience and Accelerate, University of Utah Health

Chrissy Daniels

Former Director of Strategic Initiatives, University of Utah Health

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