Redefining Health Care: Creating Value-Based Competition on Results

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The world's leading guru of competitive strategy, Michael Porter, Ph.D., has turned his sights on explaining the fundamental cause of high costs, poor quality, consumer dissatisfaction, uneven access, and skyrocketing premiums in American health care.In Redefining Health Care, Dr. Porter and business innovation specialist Elizabeth Teisberg, Ph.D. provide a thoughtful, groundbreaking framework to use genuine, value-driven competition to drive dramatic increases in quality and cost effectiveness.Unlike many wonks who foolishly believe that health care is not a market, Drs. Porter and Teisberg see competition "of a sort" at work - namely, zero-sum competition that adds little value, fosters inefficiency and poor quality, and often harms patients. Why? Because the current competitive environment is dysfunctional; serves to "shift costs, accumulate bargaining power, and restrict services;" and is ultimately misplaced - focusing on the business dynamics of providers and health plans, rather than on the diagnosis, treatment, and prevention of illness.Focusing on how to move American health care to positive-sum competition based on economic and clinical value for patients, Redefining Health Care provides a series of specific recommendations for the key players - notably, providers, health plans, employers, and Medicare / Medicaid policy makers.Drs. Porter and Teisberg challenge assumptions, think out of the box, expose the roots of health system failure, and, most importantly, provide a practical agenda for change. Redefining Health Care is an excellent piece of work, with fresh and fascinating insights.

This book has received probably disproportionate attention due to Prof. Porter's notoriety as a strategic thinking theorist. There are better overall books on healthcare policy available. In particular I recommend the Bodenheimer/Grumbach books, one on healthcare policy and one on primary care, Dr. Arnold Relman's book, A Second Opinion, Strained Mercy, an outstanding and thorough analysis of healthcare economics with particular regard to Canada's healthcare system and Pricing the Priceless a more technically-oriented economic analysis by Prof. Joseph Newhouse, among other books.I find the analysis of the USA healthcare system by Profs. Porter and Teisberg to generally be excellent, although I find it wanting in regard to their disparagement of a single-payer/single-insurer system and to their description and analysis of healthcare systems outside the USA. From my perspective private health plans play only a net negative role in the system. The authors' analysis of how the health insurance market works is quite good. However their recommendation that a system of private insurers should persist is refuted by their own analysis! A single payer/insurer system will not cure many problems of the USA system, as they clearly point out, but it does remove the inherently dysfunctional characteristics of private insurance, not least of which is its failure to meet the needs of the uninsured - a very large number - and its inherent propensity to exclude the very people who need coverage and care. The authors rightly point out that mandatory health insurance along with risk-pooling among insurers to spread the costs of those insured individuals who generate the highest costs is a "solution" to the current non-functioning system, but the same result, at lower cost and with much greater simplicity, can be achieved through a single payer/insurer.The other key aspect of healthcare - how it is delivered - is ultimately more important than the financing/insurance side. The authors provide excellent analysis and recommendations in this regard. They correctly address the aspects of the healthcare market that prevent its functioning as a "competitive" market, specifically the abysmal lack of patient information on prices for services, on outcomes of actions by providers, comparative statistics on provider performance and similar. They also provide an interesting report by the Cleveland Clinic on outcomes, i.e. results, of the Clinic's heart surgery activity. They appropriately use this as an example of the kind of reporting that is needed.The authors' analysis of healthcare systems outside the USA is skimpy and inaccurate in my opinion. The authors underplay the demonstrated efficacy of government-funded systems that outperform the USA system almost across the board in gross measures of outcomes (infant mortality and longevity) and vastly outperform the US system in regard to cost. They gloss over the fact that per capita costs in the USA are 2.5 times! the average per capita costs in other OECD countries. It is not as though the costs are say 10% above the average with comparable outcomes. They are 150% higher with worse outcomes. Instead of noting this and analyzing it thoroughly, the authors assert that waiting times and rationing of care are significant problems in those countries, assertions which are simply not borne out by the facts. Also the fact that (mostly) single-payer/insurer systems function well universally does not fit the authors' main thesis, so rather than revise the thesis based on this evidence they choose to ignore the evidence.As a consequence of these limitations I rate the book with 4 stars rather than 5. Too bad, because most of the book is excellent.

This book is an excellent opinion piece - defining and clarifying some important ideas which are still as un-tested today as they were when it was written.The main criticisms of this book are that there are few data to support their concepts. The reason for this is no one has tried anything like the approaches they suggest in either quality improvement or safety (if we accept, for the moment that these are separate areas of activity).The whole point is that they are suggesting one point, which, I agree, they hammer and re-hammer over and over: health care *must* be devaluated, measured, paid for on the basis of outcome measured over the entire cycle of the patient's disease.Unfortunately, the best we have so far is to measure mini-outcomes. And when it comes to many kinds of cancer of CAD or stroke, etc., one procedure, one O.R. episode, or even one hospitalization is a TINY portion of the health care that the patient in question will receive.It is the wrong (narrow) focus in time and other incorrect foci that they discuss.If their ideas were in place, then someone (maybe they) will write a book evaluating how effective their ideas are. There are no data - at best we have data on very short term result. Often evaluations are based on process variables, intermediate variables, or whatever name you want for them.I'm waiting for some data to analyze.