Patients or customers?

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Regular column by Scott Arrol, CEO of New Zealand Health IT (NZHIT)

Whether people using the health system see themselves as patients or customers, to get the best value from our health system, we need to move from delivery of outputs to delivery of outcomes.

During my nearly 18 years working in the New Zealand health sector, I have often been guilty of referring to myself as a ‘health customer’, or often just as a ‘customer’.

There are also times when I’ve been caught using this type of wording when talking about all of us who at some time in our lives need the services of the health sector. Obviously, this is everyone, as it will be a rarity to not use the health system – after all, we’re all born at some point in our lives!

Patient or customer?

However, during this period I’ve often been challenged about the patient versus customer dynamic. Generally, these challenges have come from within the public health sector (usually from public servants), who have the argument that we cannot be customers because we don’t pay for what we’re given.

Their point is that New Zealand’s health system is largely publicly funded, obviously by the taxpayer, and people (patients) are given a free health service in return. Hence, because it’s free and generally underfunded (in their view), then we should all be happy with what we get.

Firstly, the point has to be made that we’ve got a very good health system especially when compared on a world stage. We certainly have some hard working and highly committed people working in all areas of the sector. We don’t always get things right but we’re all striving to do better.

There are obvious pressures on the system now that must be resolved if we’re going to have a world class health system in the future, as the fear is that we’re in a period of gradually falling behind (the anecdote about boiling a frog might apply here).

An area where we are definitely falling behind is in defining the outcomes required from our health system and how this translates to purchasing goods and services based on value being delivered in return.

For example, technology (especially IT) is still purchased using a process that is designed for building roads. It is a long, drawn out and arduous process that wants to make sure all the widgets are accounted for before a contract is signed. It certainly doesn’t create an opportunity to determine outcomes or develop a funding model that is value-based, and it definitely stifles innovation and the sharing of risk and rewards.

There’s been a lot of ‘noise’ lately about large IT solutions that have cost a lot of money and haven’t delivered (at all or yet). Essentially, the concerns all come back to the fact that we cannot see that value is being delivered in return for the large amounts of money being spent.

What is value?

Many years ago, I learnt about a very basic value equation that applies to nearly everything we do in life. Basically, it goes like this: value equals benefit minus cost (Ian Brooks). This is nice and easy except we’ve also got to account for two variables – situation and subjectivity. For example, a bottle of water can have a low value in the middle of winter when we’re not thirsty, but it could be very expensive if we are dehydrated and there is only one bottle left!

And, clearly not everything is about money, as we can also apply the equation to our state of wellbeing and how healthy we are, i.e., I might spend an hour per day exercising that gives me a positive benefit of improved health. Therefore, the benefit is greater than the cost, so I feel that I’ve derived value from investing in my health in this way.

When we purchase something, be it a good or service, we either knowingly or unknowingly apply this equation. It is often the reason why some of us feel ripped off if we don’t get what we thought we were paying for or when buyer’s remorse kicks in immediately after the cash has changed hands.

Do we get value from the health system?

Whether we like it or not, this equation applies to our health as well and it also applies to the health system. Do we get value from it? Each of us will answer this differently, but in general, most of us understandably feel a sense of frustration with the public health system.

Until we start applying a value-based methodology (value in terms of quality and quantity) that encourages the delivery of outcomes, not outputs, then we are going to fall behind.

There are plenty of examples locally and internationally that show us how this can be done in New Zealand. For instance, check out the Laura Fergusson Trust in Christchurch and how they’ve developed their Can Do Catering service that is transforming lives as a result. Laura Fergusson Trust has got the value equation absolutely spot-on by moving away from a basic provider of care (funded on outputs, not outcomes) to the provision of value-based services and they’re going gangbusters as a result.

So, are we patients or customers (or can we be both)? The point is that we’ll all have a different answer, but it is essential we understand that doing it the way it’s always been done is no longer acceptable. Or, as Darwin put it, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change”.

Scott Arrol is the CEO of New Zealand Health IT (NZHIT)

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