Discovery Health CEO Dr Jonathan Broomberg lifts the curtain on the evolutionary thinking that led to ‘shared value’ in healthcare, an ecosystem-like approach that helps to build healthier people, better healthcare at lower costs and social benefits on a broader scale.
There was no ‘A-ha!’ moment, no single moment in time when we devised the shared value ecosystem, or approach. The thinking behind it was an evolution that we built up over time, one that has underpinned our Vitality model for more than 20 years now.
But, if there was an ‘A-ha!’ moment, it was back in the 1990s when Adrian Gore first thought up the Vitality programme, with a view to making people healthier. The model has evolved since then as Discovery has become the world’s leading shared value insurer – not only in health insurance, but also in the other business lines we offer. Vitality was introduced in 1997, based on the idea of shifting the risk curve by making people healthier. We’ve since extended that approach from health to life insurance, then to driving and now to banking.
Over the years we have asked the vital question: How do we create a healthcare system that’s focused on quality of care and efficiency – in other words, on true value – so patients feel safe with the care they receive? Also, if we can ensure better quality care, could that help to solve some of the most pressing challenges we face in healthcare in terms of limited resources? The shared value approach has been our answer to these questions.
When we talk about shared value in healthcare, we see it as an ecosystem, like in nature, that connects and benefits all participants – practitioners, hospitals, patients and the system itself. It does this by placing the individual patient and his/her health at the centre of care. How? Basically by paying doctors and hospitals, not simply for delivering care, but for delivering better care that improves peoples’ health.
Historically, one of the problems with healthcare – in South Africa as in other countries – is that the emphasis is on the volume of services that you provide. After all, the more you do, the more you get paid. As Discovery, we’re trying to change that by incentivising doctors and others, saying that we will continue to pay them for what they do, but if they get better results (and not just greater volumes) we will pay them more.
Globally, healthcare thought leaders are coming to realise that addressing quality of care and cost challenges in healthcare requires this kind of collaborative and systematic approach to healthcare reform. At Discovery Health we have spent two decades distilling these perspectives into our shared value ecosystem approach, which aims to improve each individuals’ health and create value in South Africa’s healthcare system.
So the thinking that inspired this is nothing new, but the big moment came when we got a name for it. In 2011, Harvard Business School Professor Michael Porter wrote a paper in the Harvard Business Review in which he coined the term ‘shared value’. He gave it a name. As Discovery, we said: ‘This is us! That is a brilliant description of exactly what we’ve been doing since the 1990s. We just didn’t have a name for it.’ Michael Porter has since written about Discovery and uses the business as a case study in his work at Harvard Business School as one the world’s best exponents of his theory.
From a global health insurance perspective, Discovery is a leader in shared value. Over time, we’ve also shifted our focus from what shared value means to Discovery members, to include how it impacts the relationship between an insurer and, say, a doctor or a hospital group. So it starts with the Vitality programme and each member, but it extends to value-based payment contracts with doctors and others. We have pushed it quite far – there are many examples of what we have done with doctors and with various health-professional groups. This is how our networks and partnerships have helped turn shared value into an ecosystem that’s even more impactful and efficient.
When Michael Porter looked at the US healthcare industry, he found a huge opportunity where things are being done inefficiently. He found that doctors and others could improve the quality of their care, and do it for less, which would liberate a large surplus of value that benefits everybody. We are working to liberate this value through the shared value ecosystem. It’s been a long journey, and it doesn’t stop here.
‘The thinking that inspired our shared value approach is nothing new. The big moment came when we got a name for it.’
‘One of the problems with healthcare is that the emphasis is on volume of services you provide… the more you do, the more you get paid. We’re trying to change that by saying we’ll continue to pay [doctors and other pracitioners] for what they do, but if they get better results we will pay them more.’