Published 8/1/2019
Kerri Fitzgerald

NOLC Session Asks, ‘How Do We Define Value in Health Care?’

U.S. health spending was 17.2 percent of the gross domestic product (GDP) in 2016, according to data from the Organisation for Economic Co-operation and Development. But GDP is not the right measure of success in a healthcare system, according to Robert H. Quinn, MD, chair of the AAOS Council on Research and Quality, who said success can be measured only by the value delivered per dollar spent. During a presentation at the 2019 National Orthopaedic Leadership Conference, which focused on value-based care, Dr. Quinn said there is a lot of “fat” in the healthcare system.

Competition exists in health care, but it is not healthy competition, he said. It is too broad—occurring more often at the health plan, network, and hospital/physician group level. The gains of one system participant come at the expense of others, as participants compete to shift costs to one another, accumulate bargaining power, and limit services. This zero-sum competition erodes quality, fosters inefficiency, creates excess capacity, and drives up administrative costs—and does not create value for patients. Moving to a positive-sum competition that focuses on results rather than standard of care is the only real way to address weaknesses in the system and enhance innovation, according to Dr. Quinn.

He also said that current quality and pay-for-performance initiatives address process compliance, not quality of results, and that patient satisfaction data focus on the service experience—such as how long a patient was in the waiting room—rather than medical results. “We need competition [based on] on results, not standardized care,” he said.

He said the model of one-year insurance commitments for individuals motivates payers and employers to focus on short-term costs, and because health plans do not have to compete on long-term results, they benefit from slowing innovations that do not show immediate savings. Dr. Quinn also said that vertically integrated health systems suppress competition at the provider level, “just where it is needed most.”

According to Dr. Quinn, while the definitions of value and quality are varied, AAOS is “in the process of creating a definition for quality and value that is unique … and meaningful to us.” Value has a different definition for each stakeholder—patients, payers, societies, and others. He said value “is not a code word for cost reduction.” Specifically, orthopaedics is an investment: “We get people back to work … and keep them functional into retirement.”

In medicine, there are incentives to overtreat: “We are paid to treat, not to keep patients healthy,” he said. When reimbursement is squeezed, incentives become stronger to earn more by treating more. Unless providers know for certain that more care will not improve results, “We feel obligated to provide it,” which Dr. Quinn said is compounded by malpractice concerns.

The universal development and reporting of results information at the medical condition level may be the single highest priority to improve performance of the healthcare system, for which Dr. Quinn said registries are important.

“We can’t be scared to compare ourselves to our peers,” said Dr. Quinn. As a leadership organization, AAOS is able to equip and position members to compete, he said, because value-based health care is about competition and risk.

AAOS quality programs

Dr. Quinn concluded with an overview of new AAOS quality programs. The Academy now includes Board of Councilors and Board of Specialty Societies representatives in its guideline generation. Guidelines also use the GRADE (Grading of Recommendations, Assessment, Development, and Evaluations) evidence-to-decision framework, and AAOS has implemented key informant panels that have no conflict of interest restrictions and provide PICO (problem/patient/population, intervention, comparison
intervention, outcome) question suggestions to guideline workgroups and peer-review groups before they publish.

AAOS also has developed registry-specific performance measures for benchmarking and Merit-based Incentive Payment System reporting. In addition, AAOS’ partnership with The Joint Commission (TJC) has involved inclusion in the American Joint Replacement Registry and the increased involvement of AAOS members on TJC technical expert panels.

“True value-based health care is when we assume all the risk for taking care of patients, and if we do it right … we’re going to be able to negotiate directly with employers and government systems,” he said.

Kerri Fitzgerald is the managing editor of AAOS Now. She can be reached at kefitzgerald@aaos.org.


  1. Organisation for Economic Co-operation and Development: Health at a Glance 2017—OECD Indicators. Available at: https://www.oecd.org/els/health-systems/Health-at-a-Glance-2017-Chartset.pdf. Accessed July 8, 2019.