Redefining Health Care: Creating Value-Based Competition on Results

Book Description

The U.S. health care system is in crisis. At stake are the quality of care for millions of Americans and the financial well-being of individuals and employers squeezed by skyrocketing costs--not to mention the stability of state and federal government budgets.

In Redefining Health Care, internationally renowned strategy expert Michael E. Porter and innovation expert Elizabeth Olmsted Teisberg reveal the underlying and largely overlooked causes of the problem and provide a powerful prescription for change. The authors argue that participants in the health care system have competed to shift costs, accumulate bargaining power, and restrict services rather than create value for patients. This zero-sum competition takes place at the wrong level--among health plans, networks, and hospitals--rather than where it matters most: in the diagnosis, treatment, and prevention of specific health conditions.

In spite of competition among these systems, the patient care cycle is poorly coordinated. The fractured system undermines both efficiency and quality of outcomes.

Redefining Health Care lays out a breakthrough framework for redefining health care competition based on patient value over the full cycle of care—from prevention and diagnosis through recovery or long-term disease management. With specific recommendations for hospitals, doctors, health plans, employers, and policy makers, this book shows how to move to value-based competition on results that will unleash stunning improvements in quality and efficiency.

Customer Reviews:

How sick is US Healthcare.......2007-10-17

Interesting view on the actual US healthcare and a challenging way to solve the mailaise

Excellent analysis with some weak points.......2007-09-01

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, among others.

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 the problems of the US 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 of 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 a closer examination of 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.

Redefining Health Care.......2007-05-23

Book Review
Redefining Health Care by Michael Porter

I am writing this review to help share some excellent ideas on the availability and quality of medical treatment in the United States and on the U.S. economy which is being dragged down by ever-increasing medical costs. The economic impact is not just on corporate profits and stock prices but also on U.S. employment because everything that raises costs makes it harder for U.S. manufacturers to compete with foreign suppliers and makes it harder for U.S. manufacturers to sell in foreign markets.
Unfortunately, the book is long, turgid, and full of details, which help to substantiate his conclusions and also provide guidance on implementing improved policies. I am afraid the book does not appeal to executives, politicians, or doctors. It also proposes radical changes in all aspects of the medical system and its financing and operation. Dr. Porter proposes major changes on the part of all parties involved in delivering and paying for health care.
The book begins with a review of health indexes and health care throughout the world and shows, while the U.S. has the greatest expenditures by any set of measurements, it does not have the best results.
Then, Dr. Porter introduces his most important concept: that any medical treatment should be measured by its results; how much lost time and discomfort did the patient have, is he or she completely cured, or how much disability measured over the entire span of the illness or even the life of the patient. We tend to think of an operation as being successful if the patient left the hospital in good condition. But how much additional recovery time, disability, or reoccurrence was there? If the patient doesn't come back to see him, a doctor doesn't know whether he was cured by the treatment or if the patient was so dissatisfied he went to another doctor or simply gave up on a series of treatments. The goal is to develop a scoring system for each group of illnesses that can be compared with the cost of each individual's treatment and their results to determine what is the best set of procedures and the best doctor or group of doctors to do the work can be used to guide providers and treatments. Porter has some reason to believe that the best treatments are generally less costly even though the individual item costs may be more, the greater effectiveness and the less chance of complications reduces overall cost. Included in the overall cost should be lost wages, which is a reasonable proxy for the patient's time.
The goal is to develop a health plan that pays for results not for treatments. In many cases, that would be a single payment to the provider for a whole series of treatments from diagnosis on through operations, post-operative care, and follow ups which could extend over a long period of time. This is a radical change from the present system which pays for treatments and tends to produce more treatments and does not have any effective means for either the insurers, or the employers, or the patients even to compare one treatment option with another. This is an extreme, radical change and would take a long time to implement, but there are pieces of the program in operation. A number of these are explained at length. Health insurance companies could hire these firms for their specialized expertise and would not have to do the work on their own. An example of what is done is how the firm studies the history of heart transplant patients and will give an insurance company a single payment for the entire course of treatment providing it is done in the manner and by people they specify. They would particularly focus on caregivers who have an outstanding record of success. It appears that for most illnesses, there are organizations that are substantially better than others and this program could be extended broadly.
Another area of development would be to have counselors which would be part of the function of the insurer to advise a company's employees with a list of particularly well qualified doctors and suggest treatment elements.
Government would seem to be poorly adapted to facilitating these changes because they are radically different from Medicare. Medicare seems to promote cheap, but not necessarily effective treatments and set arbitrary pay scales which do not allow the better providers to charge more for their services and thus encourage more providers to be in the high performance category. Companies that pay for the insurance are the ones that have to put pressure on the insurers to implement the above changes. This could not be done over a short period of time but would eliminate a lot of the wasted time that is now involved in the payments for each little step of the process and for each treatment step.
Chapter 8 is a detailed discussion of how to implement the aforementioned concepts using modifications of Medicare and other laws. This is too complex to summarize here but it appears doable if Congress and the Executive are sufficiently motivated. It is likely that few people would understand what is happening, but the benefits to cost ratio is sufficiently great that the changes would probably be supported and accepted. On the other hand, the situation is so complex, it is questionable whether lawmakers and administrators would be willing to undertake the many complex tasks required. On the other hand, the downside risk appears quite small.
Porter approaches the whole subject from the points of view of business strategy and the problems of decisions with very imperfect information. While the government frequently acts with very imperfect information, its strategy for doing so is not well developed and poorly applied.

Redefining Health Care: Creating Value-Based Competition on Results

A new look.......2007-05-20

Though a little dry, and at times repetitive, this book offers practical information. In a mess of books describing the massive problems in healthcare today, this book was at once motivating and up-lifting. I bought it for a class, but it is one of the books I'll be keeping instead of passing along at the end of the quarter.

Disappointed but Some Might Find Value.......2007-04-05

I'm a big fan of Porter, but I was somewhat disappointed by this book. Let me be frank. The first problem I have with the book is that the authors try to capture as large of an audience as possible, being careful not to place blame on certain providers within the health care system. That approach might get better reviews and sell more copies, but it is not delivering real value. One cannot escape mention of the realities of corruption and fraud by every player in health care and expect to address the problems.

The second problem I have is that Porter fails to recognize that health care is distinct from any other industry in America because it is highly politically influenced. Much of the health care system is public (government funded). This is a main reason why competition in this industry is highly ineffective. How can you have a pure competitive environment when poor performing providers continue to receive government-funded contracts? How can you have full competition when Washington merely fines providers for fraud with no jail time? How can you have competition that creates value when Washington places the burden of increasing costs upon taxpayers, letting the industry charge what it needs to deliver earnings that Wall Street expects?

Overall, by failing to address the harsh realities of politics and big money within America's health care industry, Porter's book is too idealistic and therefore falls short of offering a real solution. Regardless, it is a quality book and at least does what no other has in trying to approach the problems from a reasonable standpoint. I expected more from him, but clearly this book is a view from academia and is far detached from many realities of big industry in America. There are many good points in the book, but without addressing the main problems of a system whereby lobbyist groups who control health care policy, very little will change.

Redefining A Public Health System: HOW THE VETERANS HEALTH ADMINISTRATION IMPROVED QUALITY MEASUREMENT

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Redefining A Public Health System: HOW THE VETERANS HEALTH ADMINISTRATION IMPROVED QUALITY MEASUREMENT
GALEN L. BARBOUR
Manufacturer: Jossey-Bass Publishers
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ASIN: 0787902829

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Subacute Care: Redefining Healthcare
Laura Hyatt
Manufacturer: McGraw-Hill Companies
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ASIN: 1557386307

Beyond the Clinic: Redefining Hospital Ambulatory Care (Paper series)

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Beyond the Clinic: Redefining Hospital Ambulatory Care (Paper series)
Lynn Rogut
Manufacturer: United Hospital Fund
ProductGroup: Book
Binding: Hardcover

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ASIN: 1881277348

Legislating safety--a contentious claim: Bill C-45 is redefining the criminal liability of organizations of all descriptions, but will it really make a ... problems?: An article from: CMA Management

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Legislating safety--a contentious claim: Bill C-45 is redefining the criminal liability of organizations of all descriptions, but will it really make a ... problems?: An article from: CMA Management
J. Lynn Fraser
Manufacturer: Thomson Gale
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Binding: Digital

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This digital document is an article from CMA Management, published by Thomson Gale on May 1, 2004. The length of the article is 1738 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Legislating safety--a contentious claim: Bill C-45 is redefining the criminal liability of organizations of all descriptions, but will it really make a dent in solving past problems?
Author: J. Lynn Fraser
Publication: CMA Management (Magazine/Journal)
Date: May 1, 2004
Publisher: Thomson Gale
Volume: 78 Issue: 3 Page: 30(3)

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Redefining 'Normal' HDL Cholesterol Levels.: An article from: Family Practice News

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Redefining 'Normal' HDL Cholesterol Levels.: An article from: Family Practice News
Bruce Jancin
Manufacturer: International Medical News Group
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Binding: Digital

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This digital document is an article from Family Practice News, published by International Medical News Group on March 1, 2000. The length of the article is 543 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Redefining 'Normal' HDL Cholesterol Levels.
Author: Bruce Jancin
Publication: Family Practice News (Magazine/Journal)
Date: March 1, 2000
Publisher: International Medical News Group
Volume: 30 Issue: 5 Page: 14

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Redefining Competition in Health Care (HBR OnPoint Enhanced Edition)

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Redefining Competition in Health Care (HBR OnPoint Enhanced Edition)
Michael E. Porter , and Elizabeth Olmsted Teisberg
Manufacturer: Harvard Business Review
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Binding: Digital

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ASIN: B0002KK6FM
Release Date: 2007-09-22

Book Description

The U.S. health care system is in bad shape. Medical services are restricted or rationed, many patients receive poor care, and high rates of preventable medical error persist. There are wide and inexplicable differences in costs and quality among providers and across geographic areas. In well-functioning, competitive markets, such outcomes would be inconceivable. In health care, these results are intolerable. Competition in health care needs to change, say the authors. It currently operates at the wrong level. Payers, health plans, providers, physicians, and others in the system wrangle over the wrong things, in the wrong locations, and at the wrong times. System participants divide value instead of creating it. (And in some instances, they destroy it.) They shift costs onto one another, restrict access to care, stifle innovation, and hoard information--all without truly benefiting patients. This form of zero-sum competition must be replaced by competition at the level of preventing, diagnosing, and treating individual conditions and diseases. Among the authors' well-researched recommendations for reform: Standardized information about individual diseases and treatments should be collected and disseminated widely so patients can make informed choices about their care. Payers, providers, and health plans should establish transparent billing and pricing mechanisms to reduce cost shifting, confusion, pricing discrimination, and other inefficiencies in the system. And health care providers should be experts in certain conditions and treatments rather than try to be all things to all people. U.S. employers can also play a big role in reform by changing how they manage their health benefits.

Redefining efficacy in chronic plaque psoriasis. (Practical considerations in biodermatology #1).: An article from: Dermatology Nursing

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Redefining efficacy in chronic plaque psoriasis. (Practical considerations in biodermatology #1).: An article from: Dermatology Nursing

Manufacturer: Jannetti Publications, Inc.
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Binding: Digital

Psoriasis | Diseases | Medicine | Subjects | Books
ASIN: B0008DSNO4
Release Date: 2005-07-31

Book Description

This digital document is an article from Dermatology Nursing, published by Jannetti Publications, Inc. on June 1, 2003. The length of the article is 1143 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Redefining efficacy in chronic plaque psoriasis. (Practical considerations in biodermatology #1).
Publication: Dermatology Nursing (Refereed)
Date: June 1, 2003
Publisher: Jannetti Publications, Inc.
Volume: 15 Issue: 3 Page: 286(2)

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Redefining efficacy in chronic plaque psoriasis. (Practical Considerations in Biodermatology #1).: An article from: Skin & Allergy News

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Redefining efficacy in chronic plaque psoriasis. (Practical Considerations in Biodermatology #1).: An article from: Skin & Allergy News

Manufacturer: International Medical News Group
ProductGroup: Book
Binding: Digital

Psoriasis | Diseases | Medicine | Subjects | Books
ASIN: B0008DQTQS
Release Date: 2005-07-31

Book Description

This digital document is an article from Skin & Allergy News, published by International Medical News Group on July 1, 2003. The length of the article is 1208 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Redefining efficacy in chronic plaque psoriasis. (Practical Considerations in Biodermatology #1).
Publication: Skin & Allergy News (Magazine/Journal)
Date: July 1, 2003
Publisher: International Medical News Group
Volume: 34 Issue: 7 Page: 52(2)

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Redefining efficacy in Chronic Plaque Psoriasis.(Practical considerations in biodermatology #1): An article from: Dermatology Nursing

Manufacturer: Jannetti Publications, Inc.
ProductGroup: Book
Binding: Digital

Psoriasis | Diseases | Medicine | Subjects | Books

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ASIN: B0008DVI0A
Release Date: 2005-07-31

Book Description

This digital document is an article from Dermatology Nursing, published by Jannetti Publications, Inc. on August 1, 2003. The length of the article is 1145 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Redefining efficacy in Chronic Plaque Psoriasis.(Practical considerations in biodermatology #1)
Publication: Dermatology Nursing (Refereed)
Date: August 1, 2003
Publisher: Jannetti Publications, Inc.
Volume: 15 Issue: 4 Page: 332(2)

Distributed by Thomson Gale

Book Description

From the early forms of loans to farmers up to present day credit cards, consumer credit has always been part of human life; however, ever since the Bible, controversy has reigned as to its legitimacy. It is the history of this controversy that is presented here. Outlining significant developments in different aspects of consumer credit from the Hammurabi Code through to current questions such as household overindebtedness, the authors shed historical light on modern debates.

Stop predatory lending: A guide for legal advocates, with companion CD-Rom

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Stop predatory lending: A guide for legal advocates, with companion CD-Rom
Elizabeth Renuart
Manufacturer: National Consumer Law Center
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Binding: Paperback

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ASIN: 1931697167

Student Loan Law: Collections, Intercepts, Deferments, Discharges, Repayment Plans, and Trade School Abuses (The Consumer Credit and Sales Legal Practice; Debtor Rights Library)

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Student Loan Law: Collections, Intercepts, Deferments, Discharges, Repayment Plans, and Trade School Abuses (The Consumer Credit and Sales Legal Practice; Debtor Rights Library)
Deanne Loonin
Manufacturer: Natl Consumer Law Center
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ASIN: 160248001X

Repossessions and Foreclosures/With 1998 Cumulative Supplement (The Consumer Credit & Sales Legal Practice Ser.))

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Repossessions and Foreclosures/With 1998 Cumulative Supplement (The Consumer Credit & Sales Legal Practice Ser.))
National Consumer Law Center Inc Staff
Manufacturer: Natl Consumer Law Center
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Binding: Paperback

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ASIN: 0943116589

Automobile Fraud: Odometer Tampering, Lemon Laundering, and Concealment of Salvage or Other Adverse History (Consumer Credit and Sales Legal Practice Series)

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Automobile Fraud: Odometer Tampering, Lemon Laundering, and Concealment of Salvage or Other Adverse History (Consumer Credit and Sales Legal Practice Series)
Jonathan Sheldon
Manufacturer: National Consumer Law Center
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Binding: Paperback

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Truth in Lending: With Companion Disk (Consumer Credit and Sales Legal Practices Series.)

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Truth in Lending: With Companion Disk (Consumer Credit and Sales Legal Practices Series.)
Gary Klein , and Jonathan A. Sheldon
Manufacturer: Natl Consumer Law Center
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ASIN: 1881793370

Access to utility service: Regulated, de-regulated and unregulated utilities, deliverable fuels, and telecommunications : with CD-Rom (The consumer credit and sales legal practice series)

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Access to utility service: Regulated, de-regulated and unregulated utilities, deliverable fuels, and telecommunications : with CD-Rom (The consumer credit and sales legal practice series)
Charlie Harak
Manufacturer: National Consumer Law Center
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Binding: Unknown Binding

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ASIN: 1931697345

Automobile Fraud (2001 Cumulative Supplement with Cd-rom) (The Consumer Credit and Sales Legal Practice Series)

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Automobile Fraud (2001 Cumulative Supplement with Cd-rom) (The Consumer Credit and Sales Legal Practice Series)
National Consumer Law Center
Manufacturer: Naational Consumer Law Center
ProductGroup: Book
Binding: Paperback

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ASIN: 1931697094

Blackstone's Guide to the Consumer Credit Act 2006 (Blackstone's Guide)

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Blackstone's Guide to the Consumer Credit Act 2006 (Blackstone's Guide)
Richard Mawrey , and Toby Riley-Smith
Manufacturer: Oxford University Press, USA
ProductGroup: Book
Binding: Paperback

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ASIN: 0199205264

Book Description

This new Guide to the Consumer Credit Act 2006 covers all of the new provisions, together with discussion of the growing importance of the internet and electronic technology to this area of the law, whilst also placing the new Act in the context of what has gone before. The commentary in the
Guide is structured in a clear and logical way, thus enabling readers to quickly access the information they require.

Commercial and Consumer Credit - An Introduction

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Commercial and Consumer Credit - An Introduction
A. L. Diamond
Manufacturer: Lexis Law Publishing (Va)
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Binding: Paperback

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