Best Possible Value
PRACTICE
GUIDEBOOK
A toolkit for commissioning and providing
organisations using a value-based approach
Best Possible Value is one of six complementary
action areas of the national Future-Focused
Finance programme.
Our ambition for the NHS finance function is to
be leaders in delivering the maximum value to
patients and the public.
We want to effect a change in mind-set where
the health service uses value as the standard
approach in evaluating strategic options or
operational choices.
This Practice Guidebook is suitable for
commissioning and providing organisations
and contains:
Visit the companion website for more
information and to access a database of:
 a definition and overview of
value in health systems,
value tools
 practical tools and techniques
that enable the delivery of value,
data sources
 links to more value resources
and the NHS value community.
case studies
bpv.futurefocusedfinance.nhs.uk
Contents
01
Introduction to Best Possible Value .....
2
02
Value in healthcare systems .................
4
Porter’s Value Equation
03
Identifying priorities ............................
5
NHS Right Care
04
Making effective decisions ...................
6
Decision Effectiveness Framework
05
Measuring and demonstrating value ...
10
Value Criteria and Metrics
06
Stakeholder decision roles ...................
12
Bain’s RAPID™ Model
07
Identifying the best value option .........
14
Evaluation Dashboard
08
Further resources ................................
16
1
01
Introduction to Best Possible Value
The health service must deliver more value as
demand for services is growing faster than
funding. The complex structure of the NHS
further complicates this situation, often
producing impasses, inefficient processes and
sub-optimal results.
The finance function is ideally positioned to
address these challenges and to facilitate the
use of value as a common focus in healthcare.
Our aspiration is for Finance to be leaders in
delivering value; we want to effect a change in
mind-set where value is used as the standard
currency in evaluating strategic options or
operational choices.
In order to enable this vision, we’ve developed
and collated tools and resources which can be
used by finance professionals to help make
decisions for value as effectively as possible.
This guide introduces the reader to defining
value in health and provides an overview of
the Best Possible Value approach.
FINANCE TODAY
FINANCE TOMORROW
Focus on cost
Focus on value
Use financial metrics
Combine the best in financial
information and health economics
Analyse challenges
Solve biggest challenges
Input into decisions
Leadership role as drivers of robust
decision-making based on value
This guide and its companion website is a
repository for value tools, templates and data
sources helpful to each step in the process.
Tools can be incorporated into existing
organisational systems and processes and can
be scaled to size suit individual circumstance.
2
Finance Managers
Programme Leads
Director of Finance /
Chief Finance Officer
Chief Executive
Our methodology is a framework for making decisions for achieving best
possible value. It does not replace the business case process, evaluate
results of a decision post-hoc, or guide the user in stakeholder negotiations.
Operations Managers
NHS colleagues often experience a lack of ...
Anyone involved in healthcare management will benefit from learning more
about value and the importance of prioritising patient outcomes. Depending
on your role you may wish to focus on particular sections of this guide.
Clinicians
Best Possible Value performed a diagnostic survey of finance and
non-finance staff which identified prominent themes around value
and effective decision-making in the NHS.
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A clear, agreed measure of value
Clarity on roles and responsibilities
The right information and tools
In response, we worked with Bain & Company to develop a
Decision Effectiveness Framework and identify other appropriate
tools to address these challenges.
The Best Possible Value approach is being used at Vanguard sites and
should be used by all organisations to support and assure all key decisions,
and in the development of Sustainability and Transformation Plans.
Value in healthcare systems
Identifying priorities

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Decision effectiveness
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

Demonstrating value
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Stakeholder decision roles
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Identifying the best value option
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Case studies and data sources
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Website training and resources
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3
02
Value in healthcare systems
There are a number of ways to discuss the
concept of value in public sector services and
healthcare economies. Best Possible Value
particularly builds on Michael Porter’s seminal
work on transforming healthcare economies in
the U.S. to a whole-system value approach.
In ‘Redefining Healthcare’, Porter demonstrates
that value depends on results - not inputs therefore value is measured primarily by the
outcomes achieved. This relationship between
resource inputs and clinical outcomes is
illustrated in Porter’s Value Equation. Porter
asserts that the best way to reduce costs is to
concentrate on improving patient outcomes.
The value equation is not intended to ‘calculate’
a single numerical decision indicator. It is rather
an anchor point for linking discussions between
finance and clinicians to ensure that all parties
are able to focus on getting the best result. It
helps stakeholder groups answer identify the
right issues from the start;
“What problem are we trying to solve?”
OUTCOMES
Clinical Effectiveness
e.g. population health,
survival rate, extent of
functional recovery
VALUE
Safety
Patient Experience
+
e.g. comfort, treatment
by staff, waiting time,
ease of access
+
e.g. diagnostic error,
post-operative
complications, infections
=
RESOURCES
Revenue Costs
e.g. income, salaries,
system maintenance,
facilities
Capital Costs
+
e.g. investment in
infrastructure or
equipment
Non Financial
+
e.g. staffing resources,
capacity, systems and
infrastructure
Visit the Value Library for papers on value in healthcare, including work by Porter,
The King’s Fund and NHS Confederation at bpv.futurefocusedfinance.nhs.uk/library
4
03
Identifying priorities
NHS Right Care offers various value-based processes to support the delivery of the Five Year
Forward View and to help local health economies focus on tackling unwarranted variation:
Commissioning for Value
NHS Atlas of Variation
Commissioning for Value is a collaboration
between NHS Right Care, NHS England and
Public Health England. The programme is about
identifying priority programmes which offer the
best opportunities to improve healthcare value
for local populations.
The NHS Atlas of Variation in Healthcare is a
stimulus to start a search for unwarranted
variation, and is used as a springboard to
releasing resources for re-investment in
higher-value healthcare for local patients
and health economy populations.
Commissioning for Value is a full process that
reviews existing local health data to highlight the
top priorities (opportunities) for transformation
and improvement.
The NHS Atlas series is pivotal in the
interrogation of routinely available data that
relate investment, activity and outcome to
the whole population in need and not just
those who happen to make contact with a
particular service.
Data packs, case studies, online resources and
facilitated workshops support CCGs in ‘where to
look’ in improving value.
Versions for CCGs and Local Authorities.
Star Priority Setting
Socio-technical allocation of resources (Star)
an approach to priority setting developed by
The Health Foundation and the London
School of Economics (LSE).
The Excel-based Star tool enables users to
compare the relative value for money of
healthcare interventions and enables all
stakeholders to take part in structured
discussions about resource allocation.
Star is suitable for anyone charged with
making decisions about resource allocation
as they plan services. NHS Right Care offers
two casebook examples.
A database of other value in health organisations is available at bpv.futurefocusedfinance.nhs.uk/networks
5
04
Making effective decisions
The key measures of decision effectiveness are
quality, speed, yield and effort. International
studies of high-performing organisations show
that places that are effective at making decisions
have a higher return on investment and have
staff that are much more likely to recommend
their organisation as a place to work.
The NHS currently uses a mix of all four decision
styles which can be ineffective, particularly in
regard to the speed at which a decision is
reached. Survey respondents thought that the
NHS style should be primarily ’participative’.
Any decision style can work in the right situation
but participative style has the distinct advantages
of balancing a single point of accountability with
collaboration by experts.
Bain & Company have developed an NHS
Decision Effectiveness Framework which
advocates designing effective participative
decisions involving the right stakeholders from
the very beginning of the decision process.
DECISION STYLES
Consensus
A decision is reached
when everyone agrees
Democratic
Decisions are based
on majority vote
The Decision Effectiveness Framework can be
used by all organisation types and can be
incorporated into existing systems and processes,
scaled according to circumstance.
Benefits of using the framework include:
 Clear process to improve speed and
ease of decision-making
 Options are evaluated on the merits
of maximising value
 Good governance and accountability
 Consistent and comparable approach
Directive
One person has authority
for making a decision
Participative
Collaborative approach
with input from experts
 Clearly evaluate and evidence success
 Rapidly identifying what works and
ending what doesn’t work
 Harnessing ideas and innovations
from the front line
 Enact agreed decisions sooner and
with the support of all stakeholders
6
Decision Effectiveness Framework
actually trying to make
 Frame the decision in an
appropriate way
 Split the decision into
WHO
Relevant stakeholders are invited to participate in
facilitated workshop events and are tasked with
completing and agreeing several key templates.
 Define the decision we are
WHAT
The full Decision Handbook is composed of four
steps; the WHAT, WHO, HOW and WHEN and is
best suited to decisions made from scratch.
The essential components and templates of the
framework are presented in this guidebook.
 Clarify up-front who will play
what role in each decision
(e.g. decision-maker,
recommender)
sub-decisions if necessary
Engagement from a balanced set of stakeholders
is critical when working through the framework;
clinicians should be involved as much as possible.
It can also be helpful to run the process by having
individuals from within organisation(s) acting as:
co-ordinator - runs the process between meetings.
These can be informal roles and for ‘smaller’
decisions one person can perform all three roles.
 Clarify timeline for decision &
execution, & key milestones
 Consider creating a decision
calendar for ongoing
interconnected decisions
approach
HOW
facilitator - runs the process in meetings; and
WHEN
champion - builds stakeholder commitment;
 Install structured decision
 Design and specify:
- Interactions
- Critical meetings /
-
committees
Closure and commitment
Feedback loops
Training in using the Decision Handbook including e-learning and worked examples is available at bpv.futurefocusedfinance.nhs.uk/learn
7
WHAT
WHO
WHEN
HOW
DECISION CHARTER
Example allocation decision
DECISION
Decide how to improve value and bridge a £4M resource gap in the health economy
CONTEXT
NHS data indicate that a CCG responsible for a small northern industrial town of ~200,000 people is underperforming
relative to its demographic peer group in several service areas. Their budget allocation will increase 5% next year to
£210M, while projected outlays with no commissioning changes are expected to increase 7% to £214M. The CCG must
decide how to improve value and bridge the £4M resource gap in the health economy, and ensure providers implement
the necessary changes.
Make sure everyone is on the same page about the ‘known knowns’
OBJECTIVES
-
Improve value (cost, outcomes, safety and experience) delivered by the health system
Deliver services more efficiently to meet population’s health needs
Changes are sustainable within the broader health economy
Providers support and implement the changes
The primary goal is to maximise value by focusing on outcomes
CONSTRAINTS
-
Must reduce projected outlays by £4M
Manage resources within the financial framework set by NHS England
Must align with CCG strategic plan and adhere to CCG governance rules
Must be acceptable to public/political officials and regulators
Should be acceptable to clinical staff, financial staff and patients
All stakeholders need to agree what trade-offs may be involved
bpv.futurefocusedfinance.nhs.uk
Decision Effectiveness Framework
WHAT
WHO
WHEN
HOW
DECISION ARCHITECTURE
DECISION
Example allocation decision
Decide how to improve value and bridge a £4M resource gap in the health economy
KEY SUB-DECISIONS
Frame all decisions as statements i.e. “We need to decide...”
1
Decide the areas with the greatest opportunity for improved outcomes/cost reduction
2
Decide how to improve each opportunity area and the preferred option(s) for improvement
3
Decide the deliverability of preferred option(s)
4
Decide whether to proceed with preferred option(s) and implementation plan
bpv.futurefocusedfinance.nhs.uk
Decision Effectiveness Framework
Measuring and demonstrating value
Chapter 2 introduces Porter’s Value Equation as a
common ground for clinicians and finance to
discuss outcomes and financial constraints. In the
workshop, the group next needs to agree what
outcomes to measure and how to measure them
using the Outcomes and Value Metrics template.
This stage of the process answers “how will
success be measured when changes are made?”.
By agreeing what outcomes to measure and how
to measure them, the group can ensure a focus
on value and agree that the problem has been
correctly defined and key results identified.
Quality indicator
Average hospital stay
CLINICAL OUTCOMES
05
The companion website contains a
repository of data sources to use as metrics
at bpv.futurefocusedfinance.nhs.uk/data
Ribera
Salud
4.5 days
Valencia
region
hospitals
5.8 days
Readmission within three
days (per 1,000 discharges)
4.05
Outpatient surgery rate
79%
52%
Patients’ satisfaction
9.1
7.2
25 days
51 days
6.1
Ribera Salud is a Healthcare Management
Company that operates four privately run public
hospitals in Spain and uses patient involvement
to deliver best possible value.
Local populations are informed of changing
processes, health outcomes and associated costs,
and are involved in decisions and governance.
PATIENT EXPERIENCE
Case study Example
External consultation delay
Average surgery delay
34 days
60-90 days
CAT delay
12 days
90-120 days
< 60 mins
131 mins
Emergency waiting time
 Consider each of the components of value
and identify the criteria and metrics for each.
 The criteria should align with the key
outcomes selected in the Decision Charter.
 Evidence and data for the metrics should be
accessible and relevant.
 Highlight the metrics which are the most
important to assess the decision, and which
you will focus on going forward (‘must have
vs nice to have’).
 Make best use of time input by focusing
stakeholder attention on the appropriate
components of value.
 Completion of the Decision Charter and
Outcomes and Value Metrics templates may
aid in assessing which of a large number of
projects are viable to pursue further and that
need defining further before progressing.
 The Outcomes and Value Metrics template
aids comparability and is a key component of
the options appraisal stage of the process.
10
WHAT
WHO
WHEN
HOW
OUTCOMES AND VALUE METRICS
DECISION
Decide how to improve value and bridge a £4M resource gap in the health economy
Value
Components
Clinical
outcome
OUTCOMES
Patient
experience
Example allocation decision
Value Criteria
What to count
- Population health
- Prevention
- Outcome of intervention relative to patient expectations
- Patient recovery
- Sustainability of health
- Access to care
- Experience in care
Value Metrics
How to count it
- Prevalence (e.g. hypertension prevalence relative to peer group)
- Prevention (e.g. ratio hypertension v. heart failure prevalence, % CHD patients on aspirin)
- Diagnosis (e.g. % of cancers detected at an early stage)
- % patients treated to a pre-defined care standard (e.g. 8 Key Care Processes for Diabetics)
- Recovery (e.g. % of patients discharged home)
- Survival rate (e.g. 1 year net cancer survival rate)
- Re-admittance rate (e.g. emergency re-admission to hospital within 28 days (%): stroke)
- Distance to care (e.g. average distance for emergency admission)
- Waiting times (e.g. TIA cases treated within 24 hrs)
- Specialists per population (e.g. proportion of non-STEMI patients seen by member
of cardiology team)
- Time between referrals (e.g. % of cancers receiving treatment within 2 months
of GP referral)
Safety
RESOURCES
Revenue
costs
Capital
costs
- NRLS safety incidents by type (e.g. “clinical assessment”
- Clinical assessment incidents
- Treatment/procedure incidents
- Medication incidents
- Delivery model / cost structure
- Activity rates (e.g. imaging frequency)
- Clinician salary
- Admin staff salary
- System running costs
- Activity (total)
- Total programme spend relative to peer group (e.g. spend on primary care prescribing
- Investment in facilities / equipment
- Capital requirement and rate of return
incidents compared to peer group)
bpv.futurefocusedfinance.nhs.uk
for CHD)
- Elective/Non-elective programme spend (e.g. spend on non-elective admissions
for GI cancer)
Decision Effectiveness Framework
06
Stakeholder decision roles
According to our survey, the NHS generally
possesses some clear strengths on which to build
when considering the drivers of decision
effectiveness. We have passionate employees
committed to the effectiveness of the NHS and
finance are seen to have a seat at the table in key
decisions related to ‘best possible value’.
However, feedback suggests that - given the
structural complexity of the NHS - too many
parties are often involved in decisions where
roles are not always entirely clear; especially for
decisions with a variety of different stakeholders.
In these situations Bain’s RAPID™ collaborative
decision roles tool helps improve decision
quality, execution and speed. Again, stakeholders
use the Decision Charter to agree on assigned
roles for each sub-decision.
This approach to decision making encourages
limiting complexity and combines the benefits of
collaboration by experts with a single point of
authority for progressing a decision.
RAPID™ Rules:
R ECOMMEND
A GREE
P ERFORM
I NPUT
D ECIDE
Performs 80% of the work to
develop a decision
recommendation to D
 Note sub-decisions as rows and relevant
stakeholders as columns.
Has the power to veto R on
legal or regulatory grounds
 One role per stakeholder per sub-decision.
Actions or executes the
decision when made by D
 Locate D at the right level in the organisation.
If D belongs to a group, clarify and agree
beforehand how the decision will be made
(see page 6 for decision styles).
Must be consulted by R, views
may or may not be reflected
in final decision
 Use A sparingly for extraordinary
circumstances (e.g. regulatory or legal).
Responsible for committing to
an action, usually based on
recommendation of R
 Stakeholders may be organisations, Boards,
departments, teams or individuals.
 One R and one D of different stakeholders
(no marking your own homework).
 Can be multiple I but limit assignation to
those with relevant, valuable information
that could potentially change the decision.
 Consider involving P up-front as I to assist
with planning.
® RAPID is a registered trademark of Bain & Company Inc.
12
RAPID™ DECISION ROLES
DECISION
I
A
I
Regulators
Wider GP Community
Decide
Clinical Experts
Trust Clinical Directors
Trust Director f Finance
Trust Board
D
Input
R
A
I
I
Decide how to improve each opportunity area and the preferred option(s) for improvement
I
R
I
D
A
R
I
Decision Architecture sub-decisions
Decide the deliverability of preferred option(s)
I
4
I
Perform
Consultants
A
D
3
P
Agree
Decide the areas with the greatest opportunity for improved outcomes/cost reduction
D
2
A
Recommend
Health & Wellbeing
Board
CCG Board
Local Authority
Stakeholders
R
1
Example allocation decision
Decide how to improve value and bridge a £4M resource gap in the health economy
Clinical Senate Council
HOW
CCG Commissioning
Director
WHEN
CCG Chief Finance
Officer
WHO
CCG Chief Executive
Officer
WHAT
I
A
I
Decide whether to proceed with preferred option(s) and implementation plan
D
bpv.futurefocusedfinance.nhs.uk
R
A
I
P
Decision Effectiveness Framework
07
Identifying the best value option
Benchmarking tools are usually externallyfocused and compare between groups or
organisations. The Best Possible Value approach
allows for a head-to-head comparison of options
to identify which will generate the most value
within a group or organisation.
The New Models of Care Programme uses our
value approach to compare 22 core innovative
mechanisms employed to create value across
each of the 50 vanguard sites.
Each of the components of value are assigned:



Importance (high, medium or low)
Value generated (red, amber, green)
Evidence strength (‘Harvey balls’)
Risks are also recognised and a reflection of risk
appetite is incorporated into the model.
Options can then be evaluated and prioritised
based on their risk-value generated profile using
the Evaluation Dashboard.
Achievability of value
Quantitative evidence
from this site
Quantitative evidence Quantitative evidence Anecdotal evidence or
from national study from international study robust logic model
No evidence
High risk
Low risk
Implementation risk
Strong case for change,
delivery plan, governance and
risk assessment
Partially defined case for
change, delivery plan,
governance and risk
assessment
Lack of delivery plan with
milestones; some detail
provided for other aspects
Lack of case for change,
delivery plan, governance and
risk assessment
High risk
Low risk
Financial risk
Breakeven by 2017
Breakeven by 2018
Breakeven by 2019
High risk
Low risk
Risk tolerance exceeded
14
EVALUATION DASHBOARD
Value outcome:
Low
Medium
High
Illustrative example
Confidence:
Low
Medium
High
100%
◔
◑
◕
●
Importance
Clinical
High
Patient experience
Outcomes
Option 1
◑
Option 2
◔
Option 3
◕
Safety / quality
Sustainability
Financial
Non-financial
Capital costs (non recurring)
Revenue costs (recurring)
Resources
Non-financial
Achievability of value
Implementation risk
Risks
Financial Risk
Level of local contribution
Other practical
considerations
Replicability of model
Overall rank (or recommended investment option)
bpv.futurefocusedfinance.nhs.uk
Value Assessment
08
Further resources
Value Tools
 Spend & Outcomes Tool (SPOT)
- Public Health England
 Return on Investment Tool
- NICE
 Programme Budgeting
- NHS England
 Combined Predictive Risk Model
- Department of Health
 Adopt Improve Defend
- NHS Right Care
 Business Case & Project Models
and more at
Data Sources
 Health & Social Care
Information Centre
 International Consortium for
Health Outcomes Measurement
(ICHOM)
 NHS England
 The Health Foundation
 Dr Foster
 Costing for Value Institute
 NHS Networks
Case Studies
 Liverpool CCG Investment decision for
population lung health
 Mid-Cheshire Hospitals NHS
Foundation Trust Increasing elective capacity
decision
 Investment decision example Maternity care pathway
 Allocation decision example Bridging a resource gap in the
local health economy
Community of Practice
 News updates
 Online forum
 Speak with the team
 Ask the demonstration sites
 Write your own blog
 Find a nearby event
 Get in touch with other
colleagues using the process
 Tweet a question on #bpvFFF
bpv.futurefocusedfinance.nhs.uk
16
Join the conversation www.futurefocusedfinance.nhs.uk
@nhsFFF | #futurefocusedfinance
[email protected]
In February 2014, the six heads of the finance profession in the NHS came together to form the Finance Leadership Council (FLC) and to initiate
Future-Focused Finance. The FLC sponsors the Future-Focused Finance programme, and forms its steering group who meet on a monthly basis.
The FLC members are:
Bob Alexander
Chief Executive, NHS Trust Development Authority
Paul Baumann
Chief Financial Officer, NHS England
Steve Clarke
Finance Director, Health Education England
Stephen Hay
Managing Director of Provider Regulation, Monitor
Sue Lorimer
Business Director North, NHS Trust Development Authority and President, HFMA
David Williams
Director General, Strategy, Finance and NHS, Department of Health
Future-Focused Finance is about ‘Making People Count’ by ensuring
that everyone connected with NHS finance has access to the relevant
skills, methods and opportunities to influence decision making in
support of the provision of high-quality patient services.
v1.1 March 2016
Future-Focused Finance is sponsored by:
It offers a vision for NHS finance to aspire to over the next five years.
That includes everyone who works in finance, in every role at every
level, those we work with to deliver services and the patients and
communities that use and support those services.