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Creating value in health care: Improving outcomes while lowering costs

July 05, 2024 Posted in: Leadership

By Peter Bigler, MD, MS, Chief Medical Officer at Baylor St. Luke’s Medical Group


Leaders in the health care field share one overarching goal: to provide high-level, cost-effective care to all people who enter our facilities. But as costs continue to soar, spending on health care has outpaced nearly every other sector in the United States. According to the Centers for Medicare and Medicaid Services, in 2022, 17.3 percent of the gross domestic product was spent on health care. To provide the highest quality of care, health care providers must optimize the value of available resources to ensure the needs of patients, employers and insurers can continue to be met. 

Defining Value in Health Care

When we think of value, we must consider what it means to different stakeholders. In general, value comes from the combination of cost plus quality, but multiple factors influence cost and quality. For individuals, value encompasses cost and personal priorities when choosing and staying with a health care provider. For example, some people value the amount of time spent with a provider or the ability to better manage symptoms of medical conditions at an affordable cost, while others value convenience or access to the latest treatments regardless of cost. 

From the standpoint of a health care system, value means the ability for providers to offer the right treatment for the patient at the right time, every time. While studies can show us the most effective treatment for a particular condition, we also need to consider the costs for both the patient and the system. 

Employers are interested in attracting top talent, and part of that is offering high value health insurance to employees. However, controlling health care cost is a large concern for employers. To help find the right balance among cost, quality, and access, employers are shifting a higher percentage of rising costs to employees. Meanwhile, insurance companies are focused on decreasing costs while covering services deemed effective and beneficial proportionate to cost. 

Removing Barriers to Value

To ensure health systems are able to offer the best value, we as leaders must focus on overcoming certain challenges and find ways to make high-quality health care more cost effective. 

  • Cost awareness and cost sharing: The more patients are aware of what a procedure or medication costs, the more likely they are to make decisions of higher value to both them and the system. Steps have been made to help with consumer awareness. For example, since 2021, the government has required hospital price transparency to help patients understand the cost of a hospital service before they receive it. Hospitals must show clear, accessible information about pricing online to help patients estimate their costs and compare prices across facilities. This is helpful on multiple levels, as it encourages patients to think more about the costs of their treatment and the percentage they must pay while supporting the entire system’s ability to provide higher-value care.

  • Cost of medications: New medications are being created all the time and patented to allow medication manufacturers to cover the costs of research and development while the medications’ effectiveness is evaluated. Medications also need to be assessed to determine how effective they are for lowering the overall cost of providing care for the specific diseases they treat.

  • Lower cost, high-quality care: Advances in understanding when safe, high-quality care can be provided at a lower cost will help drive overall value. For example, many procedures previously performed exclusively in an inpatient setting can now often be handled as outpatient procedures. 


In Texas, we are steadily moving toward more value-based care arrangements with insurers and employers. St. Luke’s Health is part of that trend, and our strength in primary care allows us to have a more global perspective on patient care, a factor that helps us manage costs. 

Creating an Integrated Delivery Network

To improve value across the board, we need to think long term and big picture. Creating an integrated delivery network with seamless transitions of care and areas of expertise will drive value without sacrificing quality.

When doing so, we need to consider:

  • Where is it appropriate to provide care that has typically been in the inpatient setting but now can be done safely, effectively, and with high quality and lower cost to patients in outpatient facilities?

  • When it comes to medications and therapies, what pathways for treatment indicate both quality and value?

  • Do patients have all the information they need to make informed decisions about their care that take cost as well as quality into consideration?


As we look to the future, we must ask ourselves as leaders to consider the standard of care and the cost of that care. We must also continue to drive those messages home to our doctors and practitioners on the front lines. By doing so, we can steadily increase the value of health care services while ensuring we can continue providing the level of care our patients deserve.

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