Value-based healthcare and Codman’s “End Result System”: continuity, divergence, and what it means in practice

Introduction

Value-based healthcare (VBHC) asks health systems to maximize patient-relevant outcomesper euro (or dollar) spent. In 1914, surgeon Ernest Amory Codman proposed the “End Result System,” urging hospitals to follow every patient to determine whether treatment succeeded, and - if not - why not, to prevent similar failures(shortened from his well-known formulation). Codman’s idea is a clear intellectual ancestor of VBHC: both make outcomes the organizing principle and use systematic follow-up to drive learning and accountability. VBHC extends Codman by (i) standardizing outcomes across conditions and providers, (ii) incorporating costas the explicit denominator of value, and (iii) linking measurement to payment and system-level benchmarking.

Codman’s End Result System in brief

Codman’s 1914 monograph A Study in Hospital Efficiencylays out a hospital organization “based upon an End Result System”—practical routines for recording patient results and interrogating failures to improve care. Central to this was longitudinal tracking of outcomes for every patient, with radical transparency about performance. Contemporary analyses credit Codman with anticipating modern quality monitoring, accountability, and the use of outcome information in managerial and clinical decisions.

What VBHC adds

Michael Porter’s widely cited definition - value = health outcomes achieved per dollar (or euro) spent - makes outcomes the numerator and costs the denominator, shifting focus from volume and processes to results that matter to patients. VBHC also emphasizes standardized outcome sets (often including PROMs), population-level benchmarking, and the use of these data for continuous improvement and, in many countries, for payment reform.

In the last decade, VBHC infrastructure has grown: international standard sets of outcomes (e.g., ICHOM) and national initiatives (e.g., OECD PaRIS) that collect patient-reported outcomes/experiences to compare performance and guide improvement.

How VBHC and the End Result System relate

Deep continuity (Codman → VBHC).

• Outcome primacy. Both make outcomes—not volume or inputs—the core yardstick of performance. Codman insisted on determining each patient’s “end result”; VBHC defines value by outcomes achieved.
• Learning from failure. Codman’s “if not, why not?” frames an explicit learning loop. VBHC embeds iterative improvement using comparative outcomes and feedback cycles.
• Accountability and transparency. Codman advocated publishing results; VBHC mainstreams comparative reporting through registries and national surveys.

Key extensions (VBHC beyond Codman).

• Costs as co-equal. Codman focused on clinical outcomes and organizational efficiency; VBHC explicitly couples outcomes to their costs, pushing cost accounting and resource stewardship. 
• Standardization and risk adjustment. VBHC uses condition-specific standard sets(often including PROMs) and risk adjustment to enable fair benchmarking across providers and countries - tools not available to Codman. 
• System-level incentives. VBHC connects measurement to contracting and payment models (bundles, pay-for-performance), seeking to align incentives with value creation; Codman’s reforms were largely professional/organizational. (For implementation evidence and limits, see recent scoping/systematic reviews).

Practical implications

1. Outcomes first, then processes. Codman cautioned against confusing process with results. VBHC operationalizes this by selecting outcomes that matter to patients (survival, function, quality of life) and then back-propagating to process redesign. 
2. Close the loop at patient and population levels. Codman followed each patient; VBHC scales the idea with standardized sets and PROMs to drive improvement across services and systems. OECD’s PaRIS shows how PROMs/PREMs can inform policy and practice internationally.
3. Make costs visible alongside outcomes. Measuring true care-cycle costs (the VBHC denominator) is necessary to prioritize changes that improve both outcomes and affordability - an explicit step beyond Codman’s original program.

A historical througline

Long before VBHC, Florence Nightingale (in collaboration with medical statistician William Farr) used systematic data analysis to link environment and outcomes and to advocate hospital reform - early evidence-based quality improvement that prefigures Codman’s and today’s outcome focus. 

Bottom line

VBHC is best read as Codman’s End Result System - updated for the 21st century: still outcome-centered and failure-intolerant, but now standardized across conditions, scaled to populations, and explicitly balanced against costs. Where VBHC succeeds, it realizes Codman’s century-old call for hospitals to know their results and learn from them - only now with common measures, patient-reported data, risk adjustment, and system-level incentives to make those lessons stick.

Differentiate between costs and benefits for healthcare providers (internalization) and society (externalization). In any decision (by a patient, clinician, hospital, insurer, or government), internalization means the decision-maker bears (or captures) the full marginal social costs or benefits of the choice. Externalization means some of those costs or benefits spill over to others - patients, payers, competitors, or society - so the decision-maker doesn’t fully feel the downside or enjoy the upside.

Sources

Porter, M. E., & Teisberg, E. O. (2006). Redefining health care: creating value-based competition on results. Harvard business press.

Codman EA. A Study in Hospital Efficiency: As Demonstrated by the Case Report of the First Five Years of a Private Hospital (1914; reprinted). National Library of Medicine/PMC (2013). 

Porter ME. What is value in health care, N Engl J Med.2010;363:2477–2481.

Donabedian A. The end results of health care: Ernest Codman’s contribution to quality assessment and beyond. Milbank Q.1989;67(2):233–256.

Terwee CB, et al. Common patient-reported outcomes across ICHOM Standard Sets: the potential contribution of PROMIS. BMC Med Inform Decis Mak.2021;21:300. 

Benning L, et al. Balancing adaptability and standardisation: insights from 27 routinely implemented ICHOM standard sets. J Patient-Rep Outcomes. 2022;6:102. 

OECD. Patient-reported indicators for assessing health system performance: Measuring What Matters: the Patient- Reported Indicator Surveys (PaRIS).2019. 

An essay concerning a new healthcare.

Kudzma EC. Florence Nightingale and healthcare reform. J Prof Nurs.2006;22(2):101–104.

Brand RA. Ernest Amory Codman, MD, 1869–1940. Clin Orthop Relat Res.2009;467:2763–2765.

Teisberg, E., Wallace, S., & O’Hara, S. (2020). Defining and implementing value-based health care: a strategic framework. Academic Medicine, 95(5), 682-685.

Lee, T. H. (2010). Putting the value framework to work. New England Journal of Medicine, 363(26), 2481-2483.