1.4 Leadership response

Value-based healthcare is a model of care that encourages clinicians and healthcare organisations to deliver high-quality and cost-effective healthcare. However, for value-based healthcare to be successful, a committed and competent leadership response is required. The following areas are very important in the leadership response.

Aligning incentives for providers and organisations

Workforce initiatives such as properly designed remuneration schemes and fair performance measures must be implemented. These systems must have some reward value, which means more than agreeing on volumes of services.

Several initiatives in this regard can be assessed for useability and viability. These include:

• Pay-for-performance schemes
• Bundled payments
• Capitation models
• Bonus or shared savings models that seek to associate payments with quality and safety measures, not just economic measures. These are particularly useful for healthcare providers who are essentially small business owners rather than fully employed on a salary within the healthcare system. The incentives can be offered to partners in the care, such as diagnostic services or home-based or community services that create integrated care networks as described above.

Basing decision-making on valid and reliable data

Decision-making in value-based healthcare involves aligning decisions with valid and reliable data to improve healthcare outcomes. Increasingly, healthcare providers use data to monitor healthcare outcomes, identify improvements and measure intervention impacts. Decisions should consider short-term and long-term gains and implications. Decisions should also align with the organisation’s principles, values, identity and aspirations.

Openness to creativity and innovation

Providers must be open to developing creativity and innovation in every aspect of the healthcare delivery system, and this is particularly important in value-based healthcare. In this context, creativity relates to the decision-maker’s ability to create something new and valuable, and innovation relates to improved healthcare product services. Stevenson and Kaafarani (2011) assert that creativity and innovation bring change to an organisation and that leaders must understand both concepts and the value of each to be successful. Innovative leaders possess transformative thinking, are open-minded and are risk-aware rather than risk-averse. Innovative leaders empower their teams to adapt to changing healthcare requirements and contemporary evidence and to aspire to the highest quality of care and services. To foster a culture of creativity, leaders should lead by example, encourage diverse teams, provide training and development, reward and recognise innovation, and promote cross-functional collaboration.

Open communication with patients and families

In value-based healthcare, open communication with patients and their families promotes engagement, which is important in achieving a high-performing healthcare system because it leaves the way open for co-design of the healthcare (Kohler et al., 2017). Open communication significantly improves collaboration between parties and promotes openness to creativity and innovation, as described above.

Leadership and teamwork

Demonstrating leadership and fostering teamwork is essential to effectively implementing a value-based healthcare approach. Cornell explains this well in their analysis of historical and current leadership theories, in which they incorporate components of several theories into ‘a more versatile and novel healthcare leadership model’ (Cornell, 2020). It is generally agreed that communication, collaboration and teamwork are essential in providing quality healthcare, especially when considering patient outcomes, preventing clinical and non-clinical errors, and improving efficiency. It is also well documented that effective leadership increases consumer and health team member satisfaction.

Recruiting, selecting and developing the right people

Hiring the right people is crucial to any enterprise’s success, and a body of evidence concerning value-based recruitment is emerging. While this is not a new talent acquisition and management approach, there is an emerging understanding of cultural fit within a team. Candidates’ values and beliefs drive behaviour and are increasingly perceived as vital components in recruitment.