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Redefining Health Care: Creating Value-Based Competition on Results

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Manufacturer: Harvard Business School Press

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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.


PRODUCT DESCRIPTIONS:

Binding: Hardcover
Dewey Decimal Number: 362.1068
EAN: 9781591397786
ISBN: 1591397782
Label: Harvard Business School Press
Manufacturer: Harvard Business School Press
Number Of Items: 1
Number Of Pages: 506
Publication Date: 2006-05-25
Publisher: Harvard Business School Press
Studio: Harvard Business School Press


SIMILAR ITEMS:

• Who Killed Health Care?: America's $2 Trillion Medical Problem - and the Consumer-Driven Cure
• The Business of Healthcare Innovation
• A Second Opinion: Rescuing America's Health Care
• How Doctors Think
• Market-driven Health Care: Who Wins, Who Loses In The Transformation Of America's Largest Service Industry


CUSTOMER REVIEWS:

Review -
I am taking a Health Care Management Strategy class and this book was recommended by our professor.

Very well thought and comprehensive book.

Some comclusions can be challenged, but the book bringing a new look on Health Care and provide solutions for improvements.


Congratulations -
This a great book for physicians that likes strategic administration. Porter and Teisberg provides a major contribuition for the health care.This book will enable dramatic improvement in the efficacy and quality of patient care in the USA and other countries.

How sick is US Healthcare -
Interesting view on the actual US healthcare and a challenging way to solve the mailaise

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.

Redefining Health Care -
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

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