Value-Based Healthcare Paradigm for Healthcare Sustainability

  • Camilla FalivenaEmail author
  • Gabriele Palozzi
Part of the Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application book series (AFSGFTA)


Healthcare represents a paramount issue in the current debate around sustainability. Developing sustainable practices within health systems is fundamental not only to guarantee the right of care, but also to enhance the growth of a country. The widespread dissemination of innovation, on the one hand, could represent a way for providing a better service, in terms of quality and access. On the other hand, it is severely undermining the sustainability of health organisations due to high costs and magnitude on existing organisational arrangements. Among the various research strands aimed to identify theoretical framework to face the various challenges, Value-Based Healthcare is largely considered as the blueprint for promoting sustainable management approaches in healthcare. This paradigm stresses the importance to deliver care towards enhanced value for the patient, which could be measured through the ratio between outcomes and costs.

This chapter has a twofold aim. First of all, it is aimed at exploring the concept of Value-Based Healthcare to realise the state-of-art and to identify main issues and open questions around the drivers of value in health. Besides, it attempts to understand whether this approach could effectively contribute to the attainment of sustainable development goals. To do that, an in-depth explanation of the concepts of outcome and cost in healthcare has been carried out.

At the end of the analysis, principles of Value-Based Healthcare seem to be usefulness to cope with the need of improved practices. The focus on the value of patient, instead, allows to foster behaviours that could support the achievement of sustainable goals aimed to provide better and more accessible infrastructures. Within this complex mosaic, accounting could represent the common language to orient health management towards a higher sustainable value for the patient.


Value-based healthcare Health innovation Sustainability SDGs Accounting in health care 


  1. Andaleeb SS, Siddiqui N, Khandakar S (2007) Doctors service orientation in public, private, and foreign hospitals. Int J Health Care 20:253–263CrossRefGoogle Scholar
  2. Argyris C, Kaplan R (1994) Implementing new knowledge: the case of activity-based costing. Account Horiz (September):83–105Google Scholar
  3. Arnold D (2010) Transnational corporations and the duty to respect basic human rights. Bus Ethics Q 20:371–399CrossRefGoogle Scholar
  4. Aryankhesal A, Sheldon TA, Mannion R (2013) Role of pay-for-performance in a hospital performance measurement system: a multiple case study in Iran. Health Policy Plann 28:206–214CrossRefGoogle Scholar
  5. Ascui F, Lovell H (2011) As frames collide: making sense of carbon accounting. Account Audit Accoun 35:130–138Google Scholar
  6. Bebbington J, Larrinaga-Gonzalez C (2008) Carbon trading: accounting and reporting issues. EAR 17:697–717Google Scholar
  7. Bebbington J, Unerman J (2018) Achieving the United Nations sustainable development goals: an enabling role for accounting research. Account Audit Accoun 31:2–24CrossRefGoogle Scholar
  8. Bellé N (2015) Performance-related pay and the crowding out of motivation in the public sector: a randomized field experiment. Public Adm Rev 75:230–241CrossRefGoogle Scholar
  9. Berkowitz B (2016) The patient experience and patient satisfaction: measurement of a complex dynamic. OJIN 21Google Scholar
  10. Berwick DM, Nolan TW, Whittington J (2008) The triple aim: care, health, and cost. Health Aff 27:759–769CrossRefGoogle Scholar
  11. Bovaird T, Loeffler E (2012) From engagement to co-production: the contribution of users and communities to outcomes and public value. Voluntas 23:11–19CrossRefGoogle Scholar
  12. Buttorff C, Tunis SR, Weiner JP (2013) Encouraging value-based insurance designs in state health insurance exchanges. Am J Manag Care 19:593–600Google Scholar
  13. Capettini R, Chow CW, McNamee AH (1998) On the need and opportunities for improving costing and cost management in healthcare organizations. IJMF 24:46–59Google Scholar
  14. Cavalieri E, Ferraris FR (2010) Economia Aziendale. Attività aziendale e processi produttivi, vol i, 4th edn. Giappichelli, TorinoGoogle Scholar
  15. Chan YCL (1993) Hospital cost accounting with activity-based costing. Health Care Manage Rev 18:71–77CrossRefGoogle Scholar
  16. Chang WC, Tung YC, Huang CH, Yang MC (2008) Performance improvement after implementing the balanced scorecard: a large hospital’s experience in Taiwan. Total Qual Manag Bus 19:1143–1154CrossRefGoogle Scholar
  17. Cuckston T (2013) Bringing tropical forest biodiversity conservation into financial accounting calculation. Account Audit Accoun 26:779–714CrossRefGoogle Scholar
  18. Demeere N, Stouthuysen K, Roodhooft F (2009) Time-driven activity-based costing in an outpatient clinic environment: development, relevance and managerial impact. Health Policy 92:296–304CrossRefGoogle Scholar
  19. Deming WE (1994) The new economics: for industry, government, education, 2nd edn. MIT Center for Advanced Engineering Study, Cambridge, MAGoogle Scholar
  20. Drummond MF, O’Brien B, Stoddart GL, Torrance GW (1997) Methods for the economic evaluation of health care programmes. Oxford University Press, OxfordGoogle Scholar
  21. Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, Torrance GW (2015) Methods for the economic evaluation of health care programmes. Oxford University Press, OxfordGoogle Scholar
  22. Eddy DM (1997) Investigational treatments: how strict should we be? JAMA 278:179–185CrossRefGoogle Scholar
  23. El Alaoui S, Lindefors N (2016) Combining time-driven activity-based costing with clinical outcome in cost-effectiveness analysis to measure value in treatment of depression. Plos One 11:1–15Google Scholar
  24. Epstein MJ, Wisner PS (2001) Using a balanced scorecard to implement sustainability. EQM 11:1–10Google Scholar
  25. Erichsen Andersson A, Baathe F, Wickström E, Nilsson K (2015) Understanding value-based healthcare—an interview study with project team members at a Swedish university hospital. J Hosp Adm 4:64–72Google Scholar
  26. Fottler MD, Erickson E, Rivers PA (2006) Bringing human resources to the table: utilization of an HR balanced scorecard at Mayo Clinic. Health Care Manage Rev 31:64–72CrossRefGoogle Scholar
  27. Glouberman S, Mintzberg H (2001) Managing the care of health and the cure of disease—Part I. Health Care Manage Rev 26:56–71CrossRefGoogle Scholar
  28. Gruen R, Elliott J, Nolan M, Lawton P, Parkhill A, McLaren C (2008) Sustainability science: an integrated approach for health-programme planning. Lancet 372:1579–1589CrossRefGoogle Scholar
  29. Hahn T, Pinkse J, Preuss L, Figge F (2015) Tensions in corporate sustainability: towards an integrative framework. J Bus Ethics 127:297–316CrossRefGoogle Scholar
  30. Haywood T (2010) The cost of confusion: healthcare reform and value-based purchasing. Healthc Financ Manage 64:44–48Google Scholar
  31. Helm C, Holladay CL, Tortorella FR (2007) The performance management system: applying and evaluating a pay-for-performance initiative. Int J Health Manag 52:49–62Google Scholar
  32. Hwang MD, Christensen CM (2008) Disruptive innovation in health care delivery: a framework for business-model innovation. Health Aff 27:1329–1335CrossRefGoogle Scholar
  33. Institute of Medicine (2009) Initial national priorities for comparative effectiveness research. National Academies Press, Washington DC. Google Scholar
  34. Ippolito A, Boni S, Cinque E, Greco A, Salis S (2016) Using time-driven activity-based costing to establish a tariff system for home health care services. Int J Healthc Manag 61:436–447Google Scholar
  35. Kaplan RS, Anderson SR (2007) Time-driven activity-based costing: a simpler and more powerful path to higher profits. HBSP, BostonGoogle Scholar
  36. Kaplan RS, Norton DP (2001) The strategy-focused organization: how balanced scorecard companies thrive in the new business environment. HBSP, Watertown, MA. ISBN: 1-57851-250-6CrossRefGoogle Scholar
  37. Kaplan RS, Porter ME (2011) How to solve the cost crisis in health care. Harvard Bus Rev 89:46–52. 4, 6–61Google Scholar
  38. Kaplan RS, Witkowski M (2014) Better accounting transforms health care delivery. Account Horiz 28:365–383CrossRefGoogle Scholar
  39. Kaplan RS, Witkowski M, Abbott M, Guzman AB, Higgins LD et al (2014) Using time-driven activity-based costing to identify value improvement opportunities in healthcare. J Healthc Manag 59:399–412CrossRefGoogle Scholar
  40. Kaplan RS, Blackstone RP, Haas DA, Thaker NG, Frank SJ (2015) Measuring and communicating health care value with charts. Harvard Bus Rev 10Google Scholar
  41. Keel G, Savage C, Rafiq M, Mazzocato P (2017) Time-driven activity-based costing in health care: a systematic review of the literature. Health Policy 121:755–763CrossRefGoogle Scholar
  42. Kolk A, Levy D, Pinkse J (2008) Corporate responses in an emerging climate regime: the institutionalization and commensuration of carbon disclosure. EAR 17:719–745Google Scholar
  43. Larrinaga-Gonzélez C, Pérez-Chamorro V (2008) Sustainability accounting and accountability in public water companies. Public Money Manage 28:337–343CrossRefGoogle Scholar
  44. Lega F, Prenestini A, Surgeon P (2013) Is management essential to improving the performance and sustainability of health care systems and organizations? A systematic review and roadmap for future studies. Value Health 16:S46–S51CrossRefGoogle Scholar
  45. Lewis G, Kirkham H, Duncan I, Vaithianathan R (2013) How health systems could avert ‘triple fail’ events that are harmful, are costly, and result in poor patient satisfaction. Health Aff 32:669–675CrossRefGoogle Scholar
  46. Lifvergren S, Huzzard T, Docherty P (2008) A development coalition for sustainability in healthcare. In: Docherty P, Kira M, Shani AB (eds) Creating sustainable work systems: developing social sustainability, 2nd edn. Routledge, London, pp 167–185CrossRefGoogle Scholar
  47. Lorden A, Coustasse A, Singh KP (2008) The balanced scorecard framework—a case study of patient and employee satisfaction: what happens when it does not work as planned? Health Care Manage Rev 33:45–55CrossRefGoogle Scholar
  48. Luce BR, Drummond M, Jönsson B, Neumann PJ, Schwartz JS, Siebert U, Sullivan SD (2010) EBM, HTA and CER: clearing the confusion. Milbank Q 88:256–276CrossRefGoogle Scholar
  49. Luo CMA, Chang HF, Su CH (2012) ‘Balanced Scorecard’ as an operation-level strategic planning tool for service innovation. Serv Ind J 32:1937–1956CrossRefGoogle Scholar
  50. Maciejewski ML, Wansink D, Lindquist JH, Parker JC, Farley JF (2014) Value-based insurance design program in North Carolina increased medication adherence but was not cost neutral. Health Aff 33:300–308CrossRefGoogle Scholar
  51. Manolitzas P, Stylianou N (2018) Modelling waiting times in an Emergency Department in Greece during the economic crisis. J Healthc Manag 20:475–485CrossRefGoogle Scholar
  52. Mariani L, Tieghi M, Gigli S (2016) The efficacy of performance management system in healthcare. A literature review and research perspectives. Manage Control 3:97–116CrossRefGoogle Scholar
  53. Marshall DA, Wasylak T, Khong H, Parker RD, Faris PD, Frank C (2012) Measuring the value of total hip and knee arthroplasty: considering costs over the continuum of care. Clin Orthop Relat Res 470:1065–1072CrossRefGoogle Scholar
  54. McLaughlin N, Burke MA, Setlur NP, Niedzwiecki DR, Kaplan AL, Saigal C, Kaplan RS (2014) Time-driven activity-based costing: a driver for provider engagement in costing activities and redesign initiatives. Neurosurg Focus 37:1–9CrossRefGoogle Scholar
  55. McPhail K, McKernan J (2011) Accounting for human rights: an overview and introduction. Crit Perspect Accoun 22:733–737CrossRefGoogle Scholar
  56. McPhail K, Macdonald K, Ferguson J (2016) Should the international accounting standards board have responsibility for human rights? Account Audit Accoun 29:594–616CrossRefGoogle Scholar
  57. Miller EA, Doherty J, Nadash P (2013) Pay for performance in five states: lessons for the nursing home sector. PAR 73:153–163Google Scholar
  58. Moore MH (1995) Creating public value. Strategic management in government. Harvard University Press, Cambridge, MAGoogle Scholar
  59. Nasi G (2013) Misurare e valutare l’innovazione nelle aziende pubbliche. Milano, EgeaGoogle Scholar
  60. NICE (2013) Guide to the methods of technology appraisal. National Institute for Health and Care Excellence, LondonGoogle Scholar
  61. Nilsson K, Sandoff M (2015) Managing processes of inpatient care and treatment. J Health Organ Manag 29:1029–1046CrossRefGoogle Scholar
  62. Nilsson K, Bååthe F, Erichsen Andersson A, Sandoff M (2017a) Value-based healthcare as a trigger for improvement initiatives. Leadership Health Serv 30:364–377CrossRefGoogle Scholar
  63. Nilsson K, Bååthe F, Erichsen Andersson A, Wikström E, Sandoff M (2017b) Experiences from implementing vale-based healthcare at a Swedish University Hospital – a longitudinal interview study BMC. Health Serv Res 17:1–12CrossRefGoogle Scholar
  64. Norman CD, Skinner HA (2007) Engaging youth in e-health promotion: lessons learned from a decade of teenNet research. Adolesc Med State Art Rev 18:357–369Google Scholar
  65. Öker F, Özyapici H (2013) A new costing model in hospital management: time-driven activity-based costing system. Health Care Manag 32:23–36Google Scholar
  66. Onida P (1971) Economia d’azienda. Utet, TorinoGoogle Scholar
  67. Osborne S, Strokosch K (2013) It takes two to tango? Understanding the co-production of public services by integrating the services management and public administration perspectives. Br J Manag 24:S3–S47CrossRefGoogle Scholar
  68. Ostrom E, Ostrom V (1977) Public goods and public choices. In: Savas E (ed) Alternatives for delivering public services: towards improved performance. Westview Press, Boulder, COGoogle Scholar
  69. Paulden M, Stafinski T, Menon D, Mccabe C (2015) Value-based reimbursement decisions for orphan drugs: a scoping review and decision framework. Pharmaeconomics 33:255–269CrossRefGoogle Scholar
  70. Pestoff V (2006) Citizens and co-production of welfare services. PMR 8:503–519Google Scholar
  71. Pfeffer J, Sutton RI (2000) The knowing-doing gap. HBSP, Boston, MAGoogle Scholar
  72. Pflueger D (2015) Accounting for quality: on the relationship between accounting and quality improvement in healthcare. BMC Health Serv Res 12:1–13Google Scholar
  73. Philips Z, Bojke L, Sculpher M, Claxton K, Golder S (2006) Good practice guidelines for decision-analytic modelling in health technology assessment. Pharmacoeconomics 24:355–371CrossRefGoogle Scholar
  74. Porter ME (1991) Towards a dynamic theory of strategy: special issue. Strategic Manage J 12:95–117CrossRefGoogle Scholar
  75. Porter ME (1997) Competitive strategy. MBE 1:12–17CrossRefGoogle Scholar
  76. Porter ME (2010) What is value in health care? N Engl J Med 363:2477–2481CrossRefGoogle Scholar
  77. Porter ME, Lee TH (2013) The strategy that will fix health care. Harvard Bus Rev 91Google Scholar
  78. Porter ME, Teisberg EO (2004) Redefining competition in health care. Harvard Bus Rev 82:64–76Google Scholar
  79. Porter ME, Teisberg EO (2006) Redefining health care: creating value-based competition on results. HBSP, Boston, MAGoogle Scholar
  80. Prahalad C, Ramaswamy V (2004) Co-creating unique value with customers. Strat Leadership 32:4–9CrossRefGoogle Scholar
  81. Purbey S, Mukherjee K, Bhar C (2007) Performance measurement system for healthcare processes. Int J Prod Perf Manag 56:241–245CrossRefGoogle Scholar
  82. Ryan AM, Doran T (2012) The effect of improving processes of care on patient outcomes evidence from the United Kingdom’s Quality and Outcomes Framework. Med Care 50:191–199CrossRefGoogle Scholar
  83. Sackett DL, Rosenberg WM, Gray JA, Haynes RB, Richardson WS (1996) Evidence based medicine: what is it, and what it isn’t. BMJ 312:71–72CrossRefGoogle Scholar
  84. Silva P, Ferreira A (2010) Performance management in primary healthcare service: evidence from a field study. QRAM 7:424–449CrossRefGoogle Scholar
  85. Smith PC (2015) Performance management: the clinician’s tale. Health Econ Policy Law 10:357–360CrossRefGoogle Scholar
  86. Stechemesser K, Guenther E (2012) Carbon accounting: a systematic literature review. J Clean Prod 36:17–38CrossRefGoogle Scholar
  87. Sussex J, Towse DN (2013) Operationalizing value-based pricing of medicines: a taxonomy of approaches. Pharmacoeconomics 31:1–10CrossRefGoogle Scholar
  88. Tanis VN, Özyapici H (2012) The measurement and management of unused capacity in a time driven activity-based costing system. JAMAR 10:43–56Google Scholar
  89. Tse M, Gong M (2009) Recognition of idle resources in time-driven activity-based costing and resource consumption accounting models. JAMAR 7:41–54Google Scholar
  90. Turney PB (1991) How activity-based costing helps reduce cost. J Cost Manage 4:29–35Google Scholar
  91. Ulhoi J, Ulhoi B (2009) Beyond climate focus and disciplinary myopia. The roles and responsibilities of hospitals and healthcare professionals. Int J Environ Res Public Health 6:1204–1214CrossRefGoogle Scholar
  92. United Nations (2015) Transforming our world: the 2030 Agenda for sustainable development. United Nations, New York. Accessed 8 January 2019Google Scholar
  93. van der Voort H, Kerpershoek E (2010) Measuring measures: introducing performance measurement in the Dutch health care sector. Public Money Manage 30:63–68CrossRefGoogle Scholar
  94. Voorberg W, Bekkers V, Tummers L (2015) A systematic review of co-creation and co-production: Embarking on the social innovation journey. PMR 17:1333–1357Google Scholar
  95. Werner RM, Bradlow ET, Asch DA (2008) Does hospital performance on process measures directly measure high quality care or is it a marker of unmeasured care? Health Serv Res 43:1464–1484CrossRefGoogle Scholar
  96. World Health Organization—Regional Office for Europe (2001) Institutionalisation of health technology assessment: Report on a WHO meeting. June 30–July 1, Bonn, Germany. Accessed 10 January 2019Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Department of Management and LawUniversity of Rome Tor VergataRomeItaly

Personalised recommendations