A Financial Theory Perspective of the Metrics Employed to Measure Value in the “Value in Healthcare” Methodologies

Background: Value in healthcare is becoming an important paradigm in the drafting of health policies, the management of healthcare institutions, the financing of healthcare provision, and the choice of technologies in healthcare delivery. Several different metrics have been proposed and are currently used by academics and practitioners in this field. Summary: There are many challenges, both ethical and methodological, in the attempt to measure value in healthcare. One arises from the close relationship between health and life. Although it is generally regarded that human life should not be subject to monetary valuation, several human activities, namely work, are currently valued. This allows for the valuation of health as it impacts on these human activities. Other challenges are measuring health benefits and costs. Several metrics have been proposed in the literature and are used in practice. The purpose of this paper is to appraise, from the perspective of modern financial theory, several metrics used for determining value in healthcare. Key Messages: Most metrics used to determine value in healthcare do not reflect the concept of value used in modern financial theory. They rely mostly on accounting concepts such as costs, not in a prospective cash-flow perspective. Some adjustments need to be made to bring them into step with the financial theory of value.