Measuring Patient Value in Value-Based Healthcare: The Opportunity of Data Envelopment Analysis

Guided by the Value-Based Healthcare framework, the healthcare landscape is evolving towards prioritizing patent value over mere service volume. Attaining better patient value, defined as the balance between patient-relevant health outcomes and the associated treatment costs, requires decision-making that integrates the interests of both patients and health providers. Currently, navigating this balance remains complex due to the multidimensionality of the value concept, which underscores the need for novel value measurement techniques. In response, this study introduces a four-step roadmap leveraging Data Envelopment Analysis and Time-Driven Activity-Based Costing to translate the value equation into unified, individual value scores. Unlike traditional healthcare evaluation methods, our approach directly connects the multiple health outcomes to granular costing information without the need for monetary values or subjective weighting. Through the case of psoriasis, we demonstrate our approach is feasible and can be adapted to the complexities across diverse medical domains. Additionally, we illustrate the potential of the value scores to pinpoint inefficiencies on an individual level, analyse patterns of health improvements through cluster analysis, and assess the impact of contextual variables on value creation. Our findings underscore the importance of holistic value assessment by revealing new insights compared to the common practice of evaluating costs and outcomes independently. Accordingly, our research proposes a first standard for true value-based evaluation of healthcare. Having established a metric for value, our approach enables the benchmarking of patients, treatments, and hospitals according to patient value, ultimately contributing to the effective delivery of value-based healthcare.