This glossary includes descriptions for terms related to value-based healthcare (VBHC). The descriptions have been developed by the European Alliance for Value in Health, either by:

  1. Using existing literature (for terms which are well-defined in the literature); or
  2. Using an Adapted Delphi methodology to develop new descriptions (for terms which are not well-defined in the literature, or for terms which have multiple definitions in use)

Further details on the background and methodology of this work can be found in the corresponding report, here.

Terms with descriptions based on the literature

Allocative value

Allocative value represents an equitable distribution of resources across all patient groups.

Bundled payments

Bundled payment is a one-off or periodic lump-sum payment for a range of services delivered by one or more providers based on best practices or by following clinical pathways with an increasing emphasis on outcomes. Financial and clinical accountability are shifted to a single provider organization/group of collaborative organizations. Care is coordinated across settings, amount spent is limited, appropriate care, aligning interests and allow to deliver services in different way. This is a broader transformation to a more sustainable VBHC system, based less on short-term and more on long-term collaborative relationships between payers and providers.

Capitation based payments

Capitation payment for services delivered by different providers or at different levels of care is combined into a single prospective payment to an integrated care organization (ICO) or a large physician group. Provider is responsible for delivering all needed care for a defined population and for distributing payments to its constituent providers out of the capitation pool. The core concept is that total payment does not vary based on actual services provided to individuals in the population served. It can be seen as a per member per month payment and are adjusted at least for age and sex. Insurance risk and technical risk are under providers’ control.

Community based care

Community based care is a public health approach by treating patients with specific clinical needs that can be cared for in a nonacute care hospital setting. It is the delivery of medical care and education in the community setting.


Clinician Reported Outcome Measures (CROMs) are clinical outcomes and are mostly obscure to patients. Terms like blood pressure, cholesterol, prostate specific antigen (PSA) and complications may be incorporated in CROMs. Complications are one of the health outcome indicators and represent a medical problem that occurs during a disease, or after a procedure or treatment. The complication may be caused by the disease, procedure, or treatment or may be unrelated to them. Examples of complications are mortality or readmission.


Allocative efficiency refers to how resource inputs are combined to produce a mix of different outputs. This is achieved when it is not possible to increase overall benefits produced by the health system by reallocating resources between programs. Technical efficiency refers to achieving maximum outputs with the least costs. It reflects the relationship between resource inputs and outputs.

Overall efficiency combines allocative efficiency and technical efficiency together.

Health system fragmentation

Health system fragmentation can be defined as the “division without explicit means of coordination” of functions (e.g., financing, provision) or agents (e.g., payers, providers) in a health system or its sub-system. It can be further characterized by the existence of many non-integrated entities that operate without synergy and often in competition and encompass a lack of coordination among organizations, functions, and governance systems. Fragmentation of health systems financing can be considered across six dimensions. Specifically, these cover the number of different organizations, risk pooling mechanisms, groups of beneficiaries, benefits packages, combinations of premiums, and payment mechanisms in a health system, with increasing numbers considered indicative of higher system fragmentation.

Home based care

Home based care is the care of patients (with chronic or terminal illnesses) extended from the hospital or health facility to the patients’ homes through family participation and community involvement within available resources and in collaboration with health care workers.

Horizontal integration

Horizontal integration is based on partnering health services which provide health services to clients on the same or similar level. Horizontal integration may occur for example between physicians or between hospitals.


Quality indicators are measurable elements of practice performance and may relate to process, outcome and structure. Outcome measures reflect the impact on the patient and demonstrate the end result of your improvement work and whether it has ultimately achieved the aim(s) set (e.g. reduced mortality, reduced length of stay, reduced hospital acquired infections, improved patient experience). Process measures reflect the way your systems and processes work to deliver the desired outcome (e.g. length of time a patient waits for a senior clinical review, if a patient receives certain standards of care or not, if staff wash their hands). Structure measures reflect the attributes of the service/provider (e.g. staff to patient ratios, operating times of the service). These are otherwise known as input measures. Measurement for improvement has an additional component – balancing measures. These reflect unintended and/or wider consequences of the change that can be positive or negative. It is about recognising these and attempting to measure them and/or reduce their impact if necessary. An example of a balancing measure would be monitoring emergency re-admission rates following initiatives to reduce length of stay.

Integrated Practice Units

Integrated Practice Units (IPU’s) organize care around the patient’s medical condition to organize around the customer and the need. In an IPU, a dedicated team made up of both clinical and nonclinical personnel provides the full care cycle for the patient’s condition. It contains an additional set of characteristics that represents a further stage of development, such as more formal organizational of the team, the team’s finances, involving the “whole cycle of care,” and feedback on outcomes and costs.

Multidisciplinary care teams

Multidisciplinary care teams are comprised of multiple health professionals from several different disciplines, which brings together expertise and skills of different professionals. The team members assess, plan and manage care jointly to address as many aspects of a patient’s care as possible. It is a mechanism to organize and coordinate health and care services to meet the needs of individuals (with complex care needs).


Pay-for-performance model consists of financial incentives or penalties based on provider’s ability or inability to meet certain performance expectations based on predetermined measures to improve quality provided to patients. The model measures performance using clinical process and outcome measures and surveys on patients’ experiences with care. Formulations of P4P differ based on whether providers attain a certain level of performance or improve from a baseline performance enough to qualify for bonuses.

Personal value

Personal value represents appropriate care to achieve patients’ personal goals (outcomes that matter to people and patients). Personal value ensures that each individual patient’s values are used as basis for decision-making in a way that will optimise the benefits for them. Patient relevant outcomes reflect the effect of changes in the individual patient’s health status with respect to outcomes that matter to patients. The most common patient relevant outcomes are based on quality of life and survival and incorporate symptoms, adverse events/complications, survival/mortality, and (co)morbidities.


Patient Reported Experience Measures (PREMs) are standardized, validated questionnaires measuring patients’ perceptions of their experience whilst receiving care. It measures mainly the health process and the accompanied experiences of patients with healthcare and services (care delivery experiences).


Patient Reported Outcome Measures (PROMs) are standardized, validated questionnaires used to study how patients feel about their health status. It measures the experienced health and quality of life of patients and outcomes are often measured periodically to follow trends over time. Other examples of specific factors measured are symptoms, distress/anxiety, pain after surgery, recovery time before returning to work, and unmet needs. The quality of life measured in PROMs is an example of a patient-reported outcome and measures an individual’s perception of their position in life. This is perceived in the context of the culture and value systems in which people live and in relation to their goals, expectations, standards and concerns.

Quality of care (health outcomes, process and structure)

Quality of care is the degree to which health services for individuals and populations increase the likelihood of desired health outcomes. Evaluating quality of care consists of three components and underpins measurement for improvement. The three components are structure, process and outcomes. First, structure measures the physical and organisational characteristics where healthcare occurs. This is followed by process which focusses on the care delivered to patients e.g. services, diagnostics or treatments. Lastly, outcome measures the effect of healthcare on the status of patients and population. Each of the different types of measures has a different purpose in determining whether the improvement project has had the desired impact.

Resource allocation

Resource allocation is the distribution of resources, usually financial, among competing groups of people or programs. When we talk about allocation of funds for healthcare, three different types of allocation should be considered: allocating resources to healthcare versus other social needs, within the healthcare sector and among individual patients.

Shared decision making

Patient and provider together decide upon the best possible and suitable treatment or intervention for the patient. The disease is followed and discussed with the patient. Providers must understand what matters to people, what their views are, their priorities and what their preferences are. Patients must know all risks/harms and benefits of specific treatments. The goal is to let patients understand and make them feel supported in making good decisions. Hence in shared decision making, a healthcare provider communicates to the patient personalized information about the options, outcomes, probabilities, and scientific uncertainties of available treatment options, and the patient communicates his or her values and the relative importance he or she places on benefits and harms.

Shared savings

Shared savings reward or penalize (shared risk) care organizations for spending performance in relation to spending targets for a population of patients. Whenever spendings are lower than the target, care organizations are rewarded. These savings can be distributed to its members. In this model, care organizations are reliant on quality performance measures. Providers won’t receive savings unless it meets quality performance thresholds. It provides incremental reward or penalty on top of other base payment methods.

Social care

Social care is the care and support of vulnerable people, usually in the community. Broadly, it can be defined as all forms of personal and practical care and assistance and is primarily aimed at supporting individuals in ways that allow them to live independently. Social connectivity embodies feeling connected to the individuals, community, and environment in which one resides.

Societal preferences

Societal preferences describe the human tendency to not only be motivated by material self-interest, but also care negatively or positively for material payoffs of relevant reference groups.

Societal value

Societal value represents the contribution of healthcare to social participation and connectedness. It is the intrinsic value of good health as enabler to participate in society and solidarity as contributor to social cohesion of equal individuals. The societal values of solidarity are access and equity, quality and performance and efficiency and productivity.

Technical value

Technical value represents achievement of the best possible outcomes with available resources.

Value-based procurement

Value-based procurement is making purchasing decisions that consider how a product or solution can best deliver the outcomes being measured and reduce the total cost of care — rather than focusing exclusively on purchasing a specific product at the lowest possible price.

Vertical integration

Vertical integration is based on coordinating healthcare services by complementing each other and thus fulfilling patients’ needs on various levels. There are many different combinations of parties where vertical integration can take place. It may arise between hospital and physicians, between insurers and hospitals, between hospitals and suppliers of medicines, etc.

Terms with descriptions developed through the Adapted Delphi study

Care pathway

Care pathway refers to the stages an individual person has in the management of his or her condition. A care pathway is designed by health and care professionals to organize the care processes for a well-defined group of patients during a well-defined period. The care pathway is adapted according to the patient’s needs through shared decision making between the provider and patient.


Costs consist of direct and indirect costs of providing health care. Direct costs are both medical costs, and non-medical costs – such as those related to travel of providing health care. Indirect costs are costs incurred by patients due to e.g. loss of production (due to incapacity for work, occupational disability, or death), by their carers or families (e.g., those looking after a person when ill or providing ongoing care), and hence to society as a whole.

Health equity

Health equity is the absence of systematic and potentially remediable differences in health status (e.g. length of life, quality of life, rates of disease) or in the distribution of health resources (e.g. access to treatment) between different population groups defined by socially, economically, demographically,  geographically or other dimensions of inequality e.g. sex, gender, ethnicity, disability or sexual orientation). Health equity is achieved when everyone can attain their full potential for health and well-being and no one is disadvantaged from achieving this potential because of social position or other socially determined circumstances.

Health outcomes

Health outcomes capture the (measurable change in) state of health and wellbeing (physical, mental and social) that result from specific health interventions. There are different types of outcomes: patient reported, clinical or population-level outcomes.

Health system performance

A high performing health system is a system that delivers the best possible outcomes for patients and service users within the resources available. Health system performance has three dimensions: accessibility, quality, and efficiency. Together these determine the extent to which the best possible outcomes can be attained. Accessibility describes the extent to which patients are able to get the care they need when they need it. Quality describes the extent to which the right care is delivered in the right way. Efficiency describes the extent to which accessibility and effectiveness are optimized in relation to the resources expended.

Integrated care

Integrated care consists of health services that are managed, resourced and delivered so that people receive a continuum of health promotion, disease prevention, diagnosis, treatment, disease-management, rehabilitation and palliative care services, coordinated across the different levels and sites of care within and beyond the health sector, and according to their needs throughout the life course.

Patient journey

A patient journey represents the entire sequence of events that a patient experiences within a given healthcare system or across providers, from prevention and self-management to receiving treatment for an illness or injury. A patient journey is an ongoing process that incorporates all parts of the healthcare ecosystem, from community, informal, and primary care, to hospitals, physicians, specialty care and outpatient therapy.

Personalised care

Personalised care is tailor-made treatment for individuals or groups of individuals that works best for them. People have choice and control over the way their care is planned and delivered. Care is based on ‘what matters’ to them and their individual strengths and needs. Personalised care empowers people to have a voice.

Person-centred care

Person-centred care is care in which people and their care teams form partnerships around high quality, accessible care, which is both evidence-based and delivered in an efficient manner, and in which patients’ and caregivers’ individual preferences, needs and values are paramount.

Precision medicine

Precision medicine is a healthcare approach that utilises molecular information (genomic, transcriptomic, proteomic, metabolomic, etc.), phenotypic and health data from patients to generate care insights to prevent or treat human disease resulting in improved health outcomes. It focuses on giving the right treatment, to the right patient at the right time.


Prevention is action to reduce or eliminate or reduce the onset, causes, complications, or recurrence of disease. Several levels are defined: primordial prevention (preventing the emergence of predisposing social and environmental conditions that can lead to causation of disease); primary prevention; secondary prevention; and tertiary prevention to improve function, minimise impact, and delay complications.


Value is a comprehensive concept that is an interaction between outcomes for people and patients and the resources spend by health systems and societies to achieve these outcomes. Value is more than just monetary value and can be subjective.

Value-based health system

A value-based health system is organised and resourced to maximise the health outcomes most important for patients and populations, while simultaneously making healthcare more sustainable, accessible and resilient.

Value-based payment models

Value-based payment models shift payments from volume-based to value-based payments (health outcomes/costs). They align reimbursement with the achievement of value-based care in a defined population in which providers (in partnership with patients and health care organisations) are held accountable for achieving financial goals and health outcomes that matter to patients. Value-based payment encourages risk-sharing and optimal care delivery, including coordination across health care disciplines and between the health care system and community resources, to improve health and social outcomes for both individuals and populations.