Value may not mean what we think, says Methven Forbes, CEO, Fuller and Forbes Healthcare Group
For years, Value-Based Healthcare (VBHC) has been championed as a way to make healthcare systems more efficient, accountable, and patient-focused. By linking financial incentives to measurable patient outcomes, VBHC aims to eliminate unnecessary procedures, particularly in fee-for-service systems.
But here’s the problem: if healthcare were a production line, every patient would be the same—but they’re not.
Not all aspects of patient care can be neatly quantified through linear outcome metrics. Treatment successes and failures are influenced by factors beyond a clinician’s control, yet funding hinges on rigid performance targets. The risk? A system where numbers take precedence over people.
In my view, we need a shift—one that acknowledges real-world complexity, values professional judgment, and promotes resilience rather than financial volatility. Instead of focusing solely on outcomes that can be conveniently measured, we should be asking:
• What is the most cost-effective yet clinically effective intervention available?
• Who is the most cost-effective, appropriate professional to deliver it?
• How do we ensure clinical compliance with the evidence base?
This is where Quality-Based Healthcare (QBHC) offers a compelling alternative. Unlike VBHC, which can penalise providers for factors beyond their control, QBHC ensures that clinical excellence, professional accountability, and long-term investment in patient well-being drive decision-making.
How VBHC works—and why it’s flawed
VBHC was introduced to shift away from fee-for-service models, aiming to align financial incentives with improved patient outcomes and reduced avoidable interventions. VBHC has demonstrated some success in reducing interventions and improving cost efficiency, particularly in elective procedures and standardised treatments, where measurable outcomes align with financial incentives. However, its broader application across healthcare systems has exposed significant flaws such as those relating to complex or high-risk patients. It is easy to see, too, how VBHC can morph primarily into a cost reduction programme, especially in profit-driven models.
VBHC often creates perverse incentives that undermine patient care and provider stability. It prioritises measurable outcomes, neglecting essential but hard-toquantify aspects like mental health support and chronic disease management. Rigid targets can discourage innovation, and linking clinician income to patient feedback may deter necessary but unpopular medical decisions.
More worryingly, VBHC can incentivise providers to avoid high-risk patients in order to protect performance scores. For example, in the UK, two neighbouring medical centres served vastly different populations, with one redirecting complex cases to protect its outcome metrics. While not explicitly promoting “cherry-picking,” VBHC’s financial pressures can lead to such behaviours, ultimately reducing healthcare to a checklist rather than a holistic, patient-centred approach.
Further, under VBHC, funding fluctuates unpredictably, making long-term planning difficult—especially for providers serving economically disadvantaged populations.
For example, in the UK’s NHS Quality and Outcomes Framework (QOF) around 10 per cent of primary care funding depends on hitting performance targets, yet providers in lower-income areas often struggle to meet targets due to external social factors, reducing their available funding. In a capitated system, where care is free at the point of need, this creates financial disparities among providers—some can afford better staffing, while others struggle despite greater patient demand. I see this across our own 18 medical centres in England.
The short-termism of VBHC
While VBHC has successfully reduced unnecessary procedures in elective care, its rigid focus on measurable targets can discourage preventative and holistic care, particularly for complex cases. The financial pressure to meet outcome-based incentives may inadvertently lead to riskaverse practices, undermining long-term patient health.
Healthcare resilience isn’t built through short-term numbers alone. It requires stable funding, professional development, and the freedom for clinicians to address local needs proactively.
The core principles of QBHC
QBHC offers a flexible, clinically grounded framework that rewards best practices while avoiding penalties for factors beyond a provider’s control.
QBHC does not dismiss efficiency or costeffectiveness but reframes them to ensure clinical excellence remains the priority. It is built on four key principles:
1. Evidence-based medicine as the gold standard: Clinicians follow approved guidelines and best practices to ensure appropriate, high-quality care. Deviations from best practice trigger peer review and additional training, rather than financial penalties. The focus is on learning and improvement, not punishment. Though, if underperformance continues either at a clinical or provider level, then there are regulatory and HR implications to this.
2. Professional accountability over financial penalties: regular case reviews, audits, and mentoring ensure high-quality care, and rather than financial disincentives; underperformance is addressed through professional development.
3. A patient-centred approach that values more than just numbers: Unlike VBHC, which rewards only measurable outcomes, QBHC values comprehensive, integrated care. Factors like mental health, social support, and chronic conditions are recognised as integral to good care, even if they don’t fit into a single performance metric.
4. Stable funding for long-term sustainability: QBHC ensures stable financial models, such as capitated budgets (fixed per-patient payments), block grants (long-term funding) and riskadjusted payments (protecting providers who treat high-risk populations), and removes the financial incentive to exclude complex cases.
As always, there are cost implications. However, under this model, quality care costs what it costs, shifting the focus away from restricting activity for financial reasons towards defining the available funding and the scope of healthcare that can be afforded. I also appreciate that there are different permutations of both VBHC and QBHC and the approaches are not entirely opposites.
Why QBHC builds a more resilient health system
Balancing costs without compromising care
One of the biggest misconceptions about QBHC is that it ignores cost-effectiveness. In reality, QBHC balances financial responsibility with clinical priorities— ensuring that care is high-quality (following evidence-based guidelines), efficient (avoiding unnecessary interventions while ensuring necessary ones), and equitable (ensuring all patients receive appropriate care, regardless of risk level).
Rather than imposing arbitrary financial penalties, QBHC ensures responsible resource use through professional accountability.
Encouraging continuous improvement instead of short-term targets
Rather than restricting providers to short-term performance goals, QBHC fosters a culture of ongoing learning. Mistakes trigger mentorship and systemwide improvements instead of financial penalties, ensuring clinicians remain motivated to refine their practice. By emphasising continuous improvement, QBHC supports long-term patient health and professional growth.
Ensuring equitable access to care
By removing rigid financial targets, QBHC eliminates the incentive to “cherry-pick.” Instead of tying payments directly to narrow patient outcomes, QBHC relies on stable funding and professional peer review. Providers aren’t penalised for treating complex cases; rather, quality is assessed on clinical standards—not just on whether a patient’s metrics meet a specific target. This protects vulnerable patients, ensuring that those with multiple comorbidities or social challenges receive the care they require.
Enabling long-term investment in healthcare systems
Under VBHC, funding fluctuations make it difficult for hospitals and clinics to invest in workforce development, infrastructure improvements, and technology upgrades. QBHC’s stable financial model allows long-term investment, ensuring better chronic disease management, improved preventive care, and more strategic resource allocation.
By adopting QBHC funding models, healthcare systems become more adaptable, sustainable, and resilient.
Implementing QBHC: key considerations
Transitioning from VBHC to QBHC requires thoughtful change management. Here’s what it takes to make it work:
Defining “quality” clearly: The evidence base, translated into national and local guidelines must outline what high-quality care looks like, ensuring consistency without unnecessary rigidity.
Establishing strong governance and peer
review structures: Clinical audits, peer evaluations, and transparent performance tracking uphold professional standards without resorting to financial penalties.
Investing in data and technology: Electronic health records, benchmarking tools, and real-time feedback systems support continuous improvement, ensuring data is used for learning rather than merely justifying payments.
Aligning financing with long-term goals: Payment models should support long-term investment, preventative care, and highquality decision-making rather than short-term cost-cutting.
Engaging clinicians and patients in the
process: Frontline healthcare providers must help design QBHC frameworks-ensuring that metrics and expectations are realistic and clinically meaningful. Patient feedback should drive improvements, capturing qualitative aspects of care that numbers alone cannot measure.
The way forward: A more resilient, patient-centred future
VBHC began with good intentions, but its rigid focus on short-term metrics has created systemic distortions—penalising clinicians for factors beyond their control and discouraging equitable access.
QBHC provides a more sustainable, evidence-driven alternative. It upholds professional standards without discouraging care for high-risk patients, fostering continuous improvement instead of forcing providers to chase financial targets, and ensuring financial stability, so healthcare organisations can plan for long-term success.
If we want a truly resilient healthcare system, we must look beyond financial performance targets and prioritise quality as the foundation of care delivery. This may mean assessing the scope of healthcare that can be afforded while ensuring that the quality of care patients receive remains the primary focus. But that is a discussion for a different time.
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