Vic Management Interns' blog

Blog posts by Victorian Management Interns of the Australasian College of Health Service Management. Views are those of the individual authors and not those of ACHSM or management interns’ host organisations or employers.


HMIP Victoria Management Interns

What is value-based healthcare?

Author: Nonie Chan (VIC 1st year intern)

Date: 4 Jul 2019

First impression

Have you ever heard of value-based healthcare? When I was first introduced to the term during my initial days at Dental Health Services Victoria (DHSV) in January 2019 on my very first placement, I thought it was another one of those ‘word salads’ - I understood each of the individual words, but the whole term made no sense!

DHSV is currently at the beginning stage of transforming how public dental healthcare is delivered by adopting the value-based healthcare model. Let’s clarify some basic concepts first. What does ‘value’ mean? The word ‘value’ can be understood in so many ways depending on the context (Oxford Dictionaries, 2019). In our context, value is defined as the health outcome that matters to the consumer relative to the costs of achieving the outcome, ie value = outcome / cost (see Figure 1) (Cole, n.d.). Some of the key features of the model are maximising health outcomes while minimising costs (ie cost efficiency), putting the outcomes that the consumer wants and values at the front and centre around care design (instead of focussing on what services can be supplied), and enabling the workforce to work at their full scope of practice (to minimise ‘wastage’ of workforce capability) (Cole, n.d.; Value-based Healthcare Prize, 2019). Let me explain these using the analogy below.

Figure 1.  The value equation underpinning value based health care.

Source: reprinted from Value based health care [presentation] by Cole, D. (n.d.). Retrieved from

The dirty floor analogy

Have you ever found yourself working so hard and yet only barely keeping up with the demand? Let’s say a family of four, comprising of mum, dad, a son and a daughter, plus the family dog, lives in a house (see Figure 2) and the responsibility of keeping the floor clean falls on the mother, for no reasons other than tradition. Everyday, each member of the family goes in and out of the house with their shoes on which brings in a lot of dirt. There is also a lot of dog hair shed onto the floor. So the diligent mother vacuums, cleans and mops the floor every single day, which is a big burden on top of her other duties and commitments. But the floor still gets dirty very easily.

Figure 2. A family of four, plus the family pet dog.


The current situation

At the moment, public oral health funding in Victoria, as with its public hospital counterparts, is very much volume-based (Independent Hospital Pricing Authority, n.d.; Value-based Healthcare Prize, 2019). Put simply, the more treatment a hospital provides, the more the hospital gets in funding (Victorian Government, Depart of Health & Human Services, 2018). This system has been in place in Australia since the 1990’s, following the implementation in Victoria in 1993/94 (Eagar, 2011; Wilcox et al., 2011). It was intended to be a fair and equitable system (Wilcox et al., 2011). However in recent years, it is recognised that demands for public dental services is increasingly outstripping the available public funding and resources (Cole, n.d.; Value-based Healthcare Prize, 2019). Health data collected in recent national surveys indicate a generally deteriorating trend in oral health, with the percentage of those surveyed reporting any adverse oral health impart (eg toothache, inability to eat certain foods) increasing from 31.4% in 1994 to 38.9% in 2010 (Australian Institute of Health and Welfare, 2018). A smarter way in making sure public funding results in positive impacts on health outcomes would be to work towards the goals formed with the consumer at the beginning of a course of treatment, and in particular, goals that are considered valuable and important to the individual consumer, such as improvements in function. Let’s have a look back at our dirty floor analogy.

What matters to each individual consumer?

The family got together and discussed what they want and value in regards to the floor. Questions asked to each family member include ‘Do you want the floor spotless all the time? Are there any other aspects apart from cleanliness that you want for the floor?’ The son states ‘As long as my remote control car gets around ok, I’m happy.’ The mother says ‘Actually, there’s a section of the floor boards that creaks whenever I step on it. It’s slowly driving me mad. Let’s get it fixed as a priority.’ The father offered ‘Most of the time when I come home from work in the evening I don’t pay much attention to the floor whether it’s spotless or not… unless there is a piece of Lego on the floor! I think the most important thing, for me, is for the floor to be clear of miscellaneous items, as opposed to being spotlessly clean.’ The daughter suggests that she would really like to take advantage of the sunny window in a corner of the living room and use that as a reading corner, so special attention paid to that area of flooring would be appreciated by her. And lastly the family’s attention turns to the family dog, who seems to give an expression that says ‘Aww, thank you for asking but I love you no matter what, humans!’.

Together, the family set some goals for the floor and strategies on how to get there, such as laying new ground rules that no objects or belongings, such as toys and school bags, to be left on the floor, and picking a weekend where all the floorboards would be inspected for creaking. The focus of these strategies is to achieve the goals that are valued by each family member, which is a major shift away from the previous focus, being how often and how much can the mother clean the floor.

Working at preventative strategies

Next, the family looks at ways they can reduce the need of cleaning the floor. They realise that a major source of dirt is from their shoes, so they decide to start taking shoes off when they come into the house. Plates are now to be used for all snacks, such as biscuits and toasts, in order to minimise crumbs on the floor. The family also decides to start brushing the family dog more regularly so there is less hair on the floor. Together, these measures dramatically reduce the volume of dirt, grime and hair that accumulate on the floor, resulting in less frequent need of cleaning.

Working to full scope of practice

You may ask ‘How come it’s only the mother cleaning the floor?’ That’s a really good question! Traditional practices, whether in our everyday lives or in health care, are not always supported by good reasoning or current evidence (Brodwin, 2017; Makic, Martin, Burns, Philbrick & Rauen, 2013). Turns out the children and husband can also learn how to clean the floor, and they do just as well a job! The job is now shared between the whole family (excluding the dog). The burden on the mother is much relieved, and as a bonus, the family now feels a sense of belonging, achievement, participation and pride.

Rolling out value based health care at DHSV

Back at DHSV, there has been a flurry of activities since 2017 and 2018 in the planning and implementation (respectively) of value based oral health care (DHSV, 2018). There have been consultations and engagement activities with consumers, clinical staff and researchers to co-design the new service model and consumer journeys. Each consumer would set an individual health goal with the aid of an oral health coach. The new model would maximise opportunities for preventative measures that aim to increase oral health literacy and self care abilities. There are new tools developed to track the health outcomes and goal attainment. Last but not the least, the new service model emphasis an efficient and integrated way of utilising the different oral health professionals eg. oral health therapists, oral health coaches, dental assistants, dentists and dental specialists by supporting each of the professions to work at the top of their scopes.

If you are interested in finding out further on the current state of value based health care in Victoria and in Australia, have a read of this article from Safer Care Victoria and the Victorian Agency for Health Information: Local and international perspectives on value based health care (2019).

What else I’ve learned so far in my journey

During my placement at DHSV, I participated in the value based health care program by devising a program logic as part of the evaluation report, which will serve an important role in the refining and expansion of the model. During the process I consulted with the key leaders of the various working groups of the program. It opened my eyes to working with people from different functional teams and it was a very valuable experience in stakeholder engagement. Overall, the value based health care program served as an excellent example demonstrating how plans are turned into actions in a health service organisation in reality that no textbook or journal article in project management or change management can ever do.

Apart from this, I also contributed to the evaluation of a state-funded health promotion and capacity building program called ‘Healthy Families, Healthy Smiles’, the results of which will help guide public oral health funding and policies. I have also shadowed different functional areas spanning across the clinics, dental laboratories (ask me to show you the plaster dental model I made!), public health promotion, building and facility services, and corporate service. This allowed me to gain a deeper understanding of how the different cogwheels work together to make the machine tick. To top it all off, with the help and support across different departments I delivered a presentation to an audience from the whole of DHSV outlining some important lessons for the dental teams translated from my background in pharmacy in multidisciplinary communication, decision making, risk management, patient-centred care and team-based practice. It has been a wonderful journey in collaborating with others, promoting reflection, learning and improvement, and self discovery. 


Australian Institute of Health and Welfare (2018). Oral health and dental care in Australia.  Retrieved from

Brodwin, E. (2017). What your daily routine should look like, according to science. Retrieved from

Cole, D. (n.d.). Value based health care [presentation]. Retrieved from

Dental Health Services Victoria (2018). Value based health care update. Word of Mouth, Sep 2018. Retrieved from

Eagar, K. M. (2011). What is activity-based funding? ABF information series no. 1. HIM Interchange, 1(1):22-23. Retrieved from

Independent Hospital Pricing Authority (n.d.) Activity based funding. Retrieved from

Makic, M. B. F., Martin, S. A., Burns, S., Philbrick, D. & Rauen, C. (2013). Putting evidence into nursing practice: Four traditional practices not supported by the evidence. Critical Care Nurse, 33(2):28-43. Retrieved from

Oxford Dictionaries (2019). Definition of value in English. Retrieved from

Safer Care Victoria and the Victorian Agency for Health Information (2019). Local and international perspectives on value based health care. Retrieved from

Value-based Healthcare Prize (2019). Dental Health Services Victoria’s value based oral health care model. Retrieved from

Victorian Government, Department of Health & Human Services (2018). Activity based funding. Retrieved from

Wilcox, S., Duckett, S., Axten, P., Street, A., Owens, H. & Stow, S. (2011). Activity based funding for Australian public hospitals: Towards a pricing framework. Retrieved from

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