Redefining Health Care: Creating Value-Based Competition on Results

Redefining Health Care – Highly Recommended
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.

Excellent analysis with some weak points
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.

Lo sto ancora leggendo ma mi sembra una analisi dettagliata e molto interessante

Se ha convertido en un clásico en la gestión del valor para el ámbito sanitario. Un libro de obligada lectura.

Porter and Teisberg are very inspiring about the need to change the way we think and provide health care. This doesn’t just go for US but as much for Europe. We see country after country not being able to provide neccesary treatment to people and therefore all stakeholders (HCP, payers, patient groups AND pharma) need to work together with a shared ambition of providing real patient value. The pharma companies have the ability to drive this change in an open and transparent way – to the benefits of patients and society – and NOW is the time!