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What is a Value Proposition in Healthcare?

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The healthcare industry is a complex entity. Navigating the many layers of the healthcare system can be difficult for everyone involved, from the consumer to the payor to the provider. There is also a significant amount of competition, making revenue projection and generation tricky.

This is where the idea of the “value proposition” comes into play.

To define the value proposition in healthcare, you have to weigh the costs of services with the benefits to the consumer.

Yet, the constant change in the industry and the increase in healthcare consumerism present a problem for healthcare providers. How can providers continue to maximize revenue while also providing quality patient care? Our experts at PayrHealth will define a value proposition and explain its importance below.

Value Proposition in Healthcare Explained

A value proposition assumes that it’s best for all when the balance between price and quality is maximized.1 That said, the concept of the value proposition can be a little murky in the healthcare industry.

The health system is not like other services; it’s a critical one that every person depends on.

When providers face a downturn in revenue or revenue leakage, it leads to a lower quality of care for all patients. When healthcare providers charge higher rates, patients are left wondering if they should opt out of care to save money, thus harming the healthcare system overall.

Finding the balance that allows healthcare organizations and professionals to maximize profits and simultaneously provide high-quality health services requires establishing a clear value proposition to guide decision-makers. This ensures a consistent approach across the board in your organization.

Let’s take a look at some of the measurements used to construct a value proposition in healthcare.

Quality & Effectiveness

The first measurement in a value proposition in healthcare is quality and effectiveness. This is the most important because meeting quality standards will result in savings for providers that can then be used for other patients and costs.2  Quality measures have a strong link to patient benefits.

Quality and effectiveness are measured by the following:

  • The outcome of patient interactions with providers
  • Usage of proven and evidence-based practices
  • Proper allocation of resources
  • Reduction of practices that waste time and money
  • Implementation of effective technological resources


Quality and effectiveness have a direct impact on cost. Higher quality leads to lower costs3 and more revenue for providers. However, providers must also use best practices to control costs.

Cost control includes many factors, including:

  • Utilization of resources
  • Prevention of overuse of care
  • Coordinating care for maximum effectiveness
  • Clear communication within the organization
  • Reduction of waste

Patient-Centered Care

In healthcare, the ultimate goal is to provide patients with the best possible care with the resources available. A focus on patient-centered care is directly tied to quality and effectiveness, and thus cost as well.

Quality patient-centered care4 focuses on:

  • Coordinated and collaborative methods
  • Focus on comfort and physical well-being
  • Family wishes, culture, values, and financial limitations are respected
  • Accuracy and honesty in information sharing


Another measurement that must be considered in a healthcare value proposition is compliance. Compliance is a rather large umbrella term for several factors5 including:

  • Safety of patient care
  • Processing and reporting of payments
  • Protection of patient data
  • Prevention of fraud
  • Proper employee training
  • Maintenance of records

Mistakes or neglect in any of these areas will decrease the value of your organization’s services to the patient, thus negatively impacting the overall value proposition you can present to attract and keep patients.

Enhancing Your Value Proposition

Even a strong value proposition will benefit from enhancements. In the competitive healthcare market, every piece of value you add will improve the services you can provide patients. This is especially true if the enhancements you add will make navigating the health care system easier for the patient or if it will improve the patient’s outcome.6

Some potential ways to enhance your value proposition include:

  • Developing partnerships – As a healthcare provider, you can expand your offerings and patient base by building partnerships with other providers (ex. an insurance company) and services. This offers the benefit of consolidating care for your patient, making it easier for them to access the care they need.
  • Offering incentives – By offering patients incentives for annual check-ups and other preventative, routine care, the likelihood of your patients utilizing those services increases. The earlier many diseases are identified, the better the outcome for the patient, which is the ultimate goal of the healthcare value proposition.
  • Investing in training – Providers who invest in quality training can keep themselves up to date on the latest treatments, compliance regulations, and other necessary value proposition components.

Difficulties of Implementing Value Propositions in Healthcare

Even with the best intentions, some providers fall short of the claims they make in their value propositions. Several factors contribute to a failure to meet these claims, including:

  • Poor cost control
  • Failure to comply with regulations
  • Prioritizing flashy technology over quality health outcomes
  • Overutilization of services by patients
  • Overuse of unnecessary tests and treatments
  • Poor communication between providers
  • Negotiating low rates with payors

By focusing on each element in isolation, you can reduce the risk that one of these challenges will influence your value proposition.

Examples of Value Propositions in Healthcare

To better understand the importance of a value proposition in healthcare, let’s look at some compelling value proposition examples. Each of these examples contributes to the overall value proposition, depending on the services offered by the provider. In all cases, the best examples of value propositions in healthcare are those that are measurable.

  • Positive patient outcomes – Patient outcomes are the primary example of success in healthcare. The value proposition that demonstrates positive patient outcomes above all else should be the focus of any healthcare provider.
  • Management of symptoms – Symptom management may not always mean a patient has a positive outcome in terms of recovery. However, prioritizing patient care means focusing on patient comfort and well-being. This adds value to your organization by putting the patients first while also saving unnecessary costs.
  • Cost control – Cost control does not mean skimping on patient care. Instead, resources should be directed toward patient care and utilized in the most effective manner possible while maintaining high-quality care. It’s important to note that effectively distributing resources will directly impact the other measurable value proposition metrics.
  • Patient benefit – Communicating the benefits of your services to your patients is paramount in building and maintaining a client base. Utilizing enhancements to your value proposition can further strengthen those relationships and help maintain them moving forward.

Contracts and Value Proposition

A high-quality value proposition is critical for maintaining patient relationships and contract negotiations between you, the provider, and the payors. As an independent provider, you need to provide evidence that your care meets the standards expected by your specific field.

Furthermore, you need to demonstrate effective utilization of your resources, a balanced approach to cost control, and, most importantly, positive patient outcomes. These are all factors that will impact the rates you negotiate with potential payors, therefore ultimately influencing your revenue.

How to Improve your Value Proposition with PayrHealth

Without a clear value proposition, your healthcare organization will miss out on valuable revenue. Without enough revenue, you’re unable to provide your patients with the high-quality care they need. This negative cycle can prevent you from your number one priority, providing a positive customer experience.  

When it comes to fixing this cycle, PayrHealth can help.

We’ll do the work of negotiating contracts with payors for you, saving you time and money. Our expert team has over 25 years of experience in the field of healthcare contract negotiations. We’ve worked on more than 50,000 contracts during that time, so we know how to get you the highest rates from payors. Higher rates mean more revenue and an improved value proposition for your organization.

Focus on your patients and improve outcomes with the help of PayrHealth. Contact us today!

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