Value is a complex concept. As is the case with many words, ‘value’ has more than one meaning:

  • When used in the plural, as in ‘the values of our service’, it can be a statement of principles. For example, ‘respect for the autonomy of the individual patient is one of our core values’.
  • When used in the singular, it has an economic meaning relating outcomes achieved to the resources invested.

The multiple meanings of ‘value’ illustrate Wittgenstein’s principle that many arguments result from a failure of the parties concerned to realise that they have failed to agree on the meaning of the terms they are using.1 For example, two people can debate whether a hospital service is offering good value, but one may be talking about efficiency and the other productivity.

Dictionary definitions of value

There are two types of dictionary. The first, such as Dr Johnson’s original dictionary, gives only the lexicographer’s definition of a word. The second, such as the Shorter Oxford English Dictionary,  gives the lexicographer’s definition and examples of the word in use. This type of dictionary of course requires considerable resources to compile.

In the Shorter Oxford English Dictionary, there is a clear distinction between two different meanings of the word ‘value’, both of which are in common use in the healthcare sector:2 the moral meaning and the economic meaning.

The moral meaning of ‘value’

According to the Shorter Oxford English Dictionary, based on a definition from late Middle English, the moral meaning of value is: ‘. . .the status of a thing or the estimate in which it is held according to its real or supposed worth, usefulness, or importance.’

Examples of statements in which health services would use the term value in its moral sense are:

  • ‘this hospital values patient choice’
  • ‘at this primary care practice we value openness and honesty.’

The economic meaning of ‘value’

The economic meaning of value has four variants in the Shorter Oxford English Dictionary, one of which is: ‘. . .that amount of some commodity, medium of exchange, etc. which is considered to be an equivalent for something else.’ An example of the economic meaning of the term value in use in 1806 given is: ‘We could hardly be said to have value for our money.’

In the specialised Healthcare Economics Dictionary,3 published by Anthony Culyer in 2005, the lexicographer defines value by saying that: ‘In economics, value is usually taken as a maximum amount that an individual or group is willing to pay for a particular good or service rather than go without it.’ He also defines ‘marginal value’ as: ‘. . .the value of marginal benefit: the maximum an individual is willing to pay for an increment of benefit’.

The four healthcare perspectives on value

Although the term value has the same general meaning for the main actors involved in the provision of health services – payers for healthcare, people called patients, clinicians and managers, and for the industries that produce drugs, equipment and information technology (IT) – there are four aspects of value pertinent to a health service in the useful taxonomy developed by the European Commission’s EXPH, which are reproduced below, this time ordered from the individual to the population; there is, of course, no correct ordering because the four are inter-related:

  • Personal value: appropriate care to achieve a patient’s personal goals (Figure 2.1).
  • Allocative value: equitable resource distribution across all populations and within each population across all patient groups
  • Technical value: achievement of best possible outcomes with the resources available not just for the patients who manage to reach the service but for all the people with a particular need, including the need to mitigate the effects of deprivation, and minimise inequity
  • Social value: the contribution of healthcare to social participation and connectedness

In countries in which universal healthcare is funded from insurance funds rather than direct investment of government finance, the situation is less clear-cut but the same principles apply.

The OVSP Learning Programme

This is the first of the five modules in our online learning opportunity to help you develop the understanding and skill to:

  • Improve healthcare systems by increasing value and reducing waste (Module 1)
  • Shift the focus from bureaucracies to populations (Module 2)
  • Design population based systems and deliver care through networks (Module 3)
  • Create a culture of stewardship (Module 4)
  • Optimise personal value (Module 5)

As a result of learning from the this module, and from other people learning with you, you will be able to:

  • To identify the ways in which it is possible to address the main factors increasing the need and demand for healthcare
  • To explain how overuse, and the harm from overuse, is an inevitable consequence of increasing investment in healthcare
  • To describe resource allocation and distinguish between the different levels of decision that determine the value derived from resources
  • To outline the responsibility of clinicians and patient organisations in resource allocation
  • To identify the ways in which personal value and allocative value can be optimised