What do having a beer at a pavement cafe and receiving treatment at a hospital have in common?
Both have to do with a commodity and added value. To determine the added value of communications, for instance, you need to compute its cost.
Nothing like a cold pint of beer on a balmy spring day. Good stuff. Wait – a witbier costs €5.50 nowadays?
The barmaid brings an order of hot nibbles. I carefully take a bite and burn my mouth as usual. Beer and hot nibbles: a commodity – available all over the place. At every pavement cafe, with sunny weather, and always served with a smile (at least at the start of the season). I look around me, hear people enjoying themselves, smell the scent of spring, and taste beer in my mouth. The situation appeals to my sense of happiness: bliss at a pavement cafe.
My investment: €11.50 for beer and hot nibbles. More than worth it. Mainly thanks to the situation. It’s included ‘free of charge’, but it plays a big part in my sense of happiness. It boosts the value of the commodity and therefore adds value to the moment and to my life.
I contemplate my work, hospitals, and value-based healthcare. Diagnostics, therapy, and after-care have become a mass product: a commodity. Results and quality in healthcare are 90 per cent standard; differences between hospitals are largely arbitrary. Extras like communications, access, or reliability are provided ‘free of charge’. Are these the things that make the greatest difference and therefore have the most added value? Is that the aim of value-based healthcare?
‘Hey, ANNE, over here!’ I jump to attention as ‘our very own businessman’ waves to me from three tables over. Friend of the family, self-proclaimed successful businessman, and unsolicited adviser in many areas. I’ve already ordered my pint, and he’s witty and fun to talk to. So I accept his offer to join him. We toast. I tell him what’s on my mind. ‘Come on, Anne, it’s a fine spring day, we’re enjoying a pint. Why don’t we talk about football instead?’
No single hospital works with or can indicate a specific cost price. Because they simply don’t ‘get’ cost? What kind of business is that?
He senses my hesitation and shifts into adviser mode: ‘You were saying something about commodity and added value? In hospitals? First you need to figure out what that “commodity” costs. And how much revenue it needs to bring in. And then I’ll give you the added value in euros. I see only outcome lists, 10 infections, 20 bad prescriptions and 30 deaths – no mention of euros. So how much does the commodity cost? Your guess is as good as mine. No single hospital works with or can indicate a specific cost price. Because they simply don’t ‘get’ cost? What kind of business is that?’
Determine the real cost and then ask your customers whether they’re satisfied. And people in your line of business are easily satisfied, so no worries.
‘Thanks, but is it really that simple?’. ‘Of course. We’re talking about hospitals: saving lives and suchlike. Determine the real cost and then ask your customers whether they’re satisfied. And people in your line of business are easily satisfied, so no worries. And then I’ll spit out the added value for you. Per commodity, per euro, per customer – whatever works for you. But you know, healthcare is not a real business…not my cup of tea…too fuzzy.’ He sighs and gestures that he has spoken. ‘Right: so how’s life? Hey there, we’ll have another round over here.’
Managing Consultant
