My light just went out

[ See part 1 of I Have a Little Light. ]

Last time we finished with a little light for an idea that begins with “V” and has something to do with managing cost…

“Yes”

“Does it go up”?

“It can”

“Do things get joined”?

“They can”

“The more you do the better it is”

“maybe”

“I have a little light!”

“What is your little light?”

“Is it V for volume?”

“Sort of”

“Vertical integration?”

“Maybe”

“Verification?”

“Could be”

“Variation?”

“There often is”

“I don’t like this game – I give up!”

It’s Value!

“So, the more expensive it is the more valuable it must be?”

“Not quite – the less expensive it is the more value it has if the quality is high.”

“You didn’t say anything about quality!”

“Ok, ok – so if it’s cheaper then it may or may not be better.”

Exactly!!!

So if quality is very high it may be low value as well if it’s very expensive.

How was I supposed to get that?!

What sort of idea is that when better can be less or more?

That’s because value isn’t quality or cost – it’s the cost of quality. It’s a relationship.

Sometimes quality is very high but far too expensive and it might be better to find ways of making it cheaper or maybe it’s not a form of quality we really value and we should reduce it.

Sometimes you find low quality of something you really value but it’s also very cheap and it would be better overall to improve quality even if it means spending a bit more.

Managing by value doesn’t tell you exactly how to improve quality or how to reduce cost but it does tell you if you are getting a better relationship over time than you were.

That in itself is revolutionary. Imagine what decision making would be like if a health service knew the direction of its value trends for services and why.

Well that’s part of the problem – once you get it it’s so easy but getting there can be difficult.

Welcome to the pain of a new idea.

…and by the way it’s really about an idea that begins with “O”.

Any guesses?

Dr Chris Farmer

Clinical Director, Metrixcare