If you don't get it, you don't own it

How AZ Alma and AZ Sint-Elisabeth are viewing themselves at the pathology scale.

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AZ Alma in Eeklo and AZ Sint-Elisabeth (SEZZ) in Zottegem came to Value4Health by different routes. Yet they share a fundamental ambition: to understand their hospital the way a manufacturer understands its product mix, right down to the level of individual pathologies, care pathways and cost structures. In a sector that traditionally thinks in terms of activities and budgets, that is a paradigm shift. And the shift doesn't happen by itself: it takes time, buy-in and a learning curve that both institutions have now put behind them. What unites them is the conviction that real insight into a hospital's financial dynamics only begins when you think in terms of pathology, not activity.

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Speaking the hospital's financial language

Tamara De Caluwé is a medical strategy project leader at AZ Alma. Her starting point was not a financial question but a communication one: how do you have a meaningful conversation with a doctor about the performance of their specialty, when the data you need for it is hard to translate into medical language? For five years now, AZ Alma has held department review meetings: sessions in which the medical director, the general director and the department heads of each discipline sit down together to discuss performance and quality. In the early years, those conversations were driven by activity data. But a year and a half ago, Tamara De Caluwé brought Value4Health insights into those meetings for the first time.

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This changed completely the discussion : master's thesis students had used Value4Health to analyse knee and hip replacement procedures, giving her a workable framework: length of stay, cost per patient day and operating room (OR) minutes. Those three parameters became her anchor points for the discussions with the departments. "You can't debate indirect costs or staffing allocation with doctors," she says. "But the cost of a patient day, an OR minute or medication use is concrete enough to talk about."

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The benchmark puts a price tag on it

The approach followed a fixed structure: for each specialty, she identified the five DRGs with the highest patient volume and analysed how the hospital scored on those three elements compared with the benchmark. The result was surprising: little resistance and a great deal of recognition among the doctors. Specialists who intuitively knew that their patients stayed in hospital longer on average were now confronted with what that cost. Anaesthetists confirmed what they already sensed: certain OR times were too long. The difference was that the data made it objective and put a price tag on the gap with the benchmark.
To be clear: benchmarking surgical duration is not meant to push surgeons to work faster or to increase time pressure in the operating theatre. The aim is to find out where there is room for improvement in the processes surrounding a procedure: preparation, handover and aftercare. Quality of care remains an absolute priority.

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"You can tell a doctor: your patient is staying longer than average. But if you can also tell them what one extra day costs, the message lands very differently." — Tamara De Caluwé, AZ Alma

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The change it set in motion was not an immediate series of new protocols. What grew was, above all, awareness. In the pharmacy, insight into the cost difference between intravenous and oral medication led to concrete steps towards clinical pharmacy: the pharmacy began actively calling the doctor or nurse whenever a switch might be possible. Awareness is growing. Doctors who used to reason purely from a medical perspective now ask for a financial prediction of organisational choices themselves. "Questions like that simply didn't exist before," says Tamara De Caluwé.

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Still, she is candid about the limits of her current approach. Working discipline by discipline was labour-intensive, and the translation into concrete actions remained limited. Her next step is a hospital-wide analysis: which DRGs are the most profitable, and why? Which cost items (emergency department, staff, materials) deviate most from the benchmark? That ambition has now been written into the 2026–2030 strategic plan, which explicitly refers to working with Value4Health on loss-making and profitable DRGs and on standardising care pathways. Not as a side project, but as a strategic priority considering the upcoming reform of hospital financing.

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Pathology as a new scale for strategy

At AZ Sint-Elisabeth in Zottegem, the angle is different, but the direction remains the same. Nele Vanmeirhaeghe, Financial Director, already knew Value4Health from her previous employer, AZ Sint-Lucas Ghent, where she had got to know the tool at an early stage. When she started as financial director at SEZZ in 2020, her mind was quickly made up: within two to three years, she would free up the budget and convince the organisation to join. In 2023, the hospital did indeed come on board. Today it has three years of data.

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The real dynamics come to light

Nele Vanmeirhaeghe locates the added value of Value4Health in a fundamental problem: a hospital is financially extremely complex, and a balance sheet or income statement gives you hardly any grip on it. The real financial dynamics only reveal themselves once you understand which pathologies are profitable, which are loss-making, and what a patient's consumption pattern looks like, from the nursing department to the OR, the pharmacy and the lab. "In any industry, you measure the SKU level (Stock Keeping Unit – a unique code a company assigns to each distinct variant of a product it keeps in stock, ed.)," she says. "In a hospital, you have the pathology level. But many finance departments still think in activities, not in patients. And then you stay blind to the financial dynamics that really matter."
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Similarly to AZ Alma, the first phase in Zottegem was a building one: creating trust in the model among the finance department, the executive committee and the governing bodies. Value4Health is a proxy model, not an exact science. "New insights are hard to validate on gut feeling," says Nele Vanmeirhaeghe. "Bringing the organisation along takes time and energy, again and again." For two years, that learning curve dominated. Only in the past year has that trust started to translate into real applications.

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"If you still have to start putting together the pieces of the new hospital financing puzzle today, you are far too late." — Nele Vanmeirhaeghe, SEZZ
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Two pillars in focus

Today the management team works around two pillars. The first is the SLIM report: a management report showing where the organisation's potential for improvement is greatest, in cost and revenue performance, length of stay and OR efficiency. Those insights feed directly into budget plans and strategy days. The second pillar is project-specific: for every new initiative that can be approached from a pathology perspective, Value4Health serves as a screening tool. The most concrete example is the planned expansion of day hospital capacity.

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"Value4Health is the only model that gives insight into the knock-on effects of a decision like that," says Nele Vanmeirhaeghe. "If you expand the day hospital for a particular pathology, what is the impact on the profitability of the pharmacy, the lab, radiology? They are communicating vessels, and only this model lets you see those connections." That is certainly no luxury at a time when subsidies for new building projects are more uncertain than ever. The worst-case scenario, in other words full financing from the hospital's own resources, must be modelled. And for that, the financial director knows, you need more than a calculation of staffing needs and infrastructure costs.

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From opinion to evidence

The benchmark function plays a crucial role here, not only for internal decisions but also for conversations with medical staff. "If you can tell a surgeon that 90% of other hospitals do better than we do in a particular area, the conversation takes on a different dynamic. The discussion becomes more objective." And that objectivity is what Nele Vanmeirhaeghe sees as one of the model's greatest strengths: it shifts the conversation from opinion-based to evidence-based.
As an independent general hospital, SEZZ has chosen to focus on targeted partnerships with other hospitals. The key to the success of that choice lies in developing the right activities, and for that, Value4Health has become an indispensable tool. Her core message to fellow hospitals is as clear as it is pragmatic: the learning curve takes time but waiting is even more expensive. "Almost right is right enough to make strategic decisions. It's simply a matter of doing it."

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The same compass, two routes

AZ Alma and SEZZ joined Value4Health along different paths: one through medical strategy, the other through financial strategy. But both ended up in the same place: if you really want to steer your hospital, you first have to get to know it through the lens of pathology. And in a sector preparing for the biggest financing reform in decades, that is no longer a strategic choice. It is the minimum requirement for a hospital to follow a evidence-based strategy.

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