Redefining Health Care: Creating Value-Based Competition on Results [Hardcover]

Michael E. Porter (Author), Elizabeth Olmsted Teisberg (Author)

Book Description

Publication Date: May 25, 2006

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.

Editorial Reviews

Review

"...a profound and powerful critique of America’s health-care system. It deserves to be read widely. And probably will be." -- Economist.com

About the Author

Michael Porter acts as one of the World Economic Forum's Global Competitiveness Report's primary editors.

Product Details

• Hardcover: 528 pages
• Publisher: Harvard Business Review Press; 1 edition (May 25, 2006)
• Language: English
• ISBN-10: 1591397782
• ISBN-13: 978-1591397786
• Product Dimensions: 9.4 x 6.5 x 1.7 inches
• Shipping Weight: 1.9 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (36 customer reviews)
• Amazon Best Sellers Rank: #18,964 in Books (See Top 100 in Books)
  • #9 in Books > Business & Investing > Management & Leadership > Strategy & Competition
  • #9 in Books > Medical Books > Administration & Medicine Economics > Hospital Administration
  • #12 in Books > Medical Books > Administration & Medicine Economics > Health Policy

More About the Author

Michael E. Porter, Professor of Business Administration at the Harvard Business School, is the author of Competitive Strategy, the recipient of the 1979 McKinsey Foundation Award for The Best Harvard Business Review Article, and a guest columnist for the Wall Street Journal. Professor Porter developed the much praised MBA course on Industry and Competitive Analysis, lectures widely on competitive strategy, and is a strategic consultant to numerous companies in the United States and abroad.

Customer Reviews

Most Helpful Customer Reviews

39 of 46 people found the following review helpful:

1.0 out of 5 stars Porter and Teisberg Attempt to Fit a Square Peg into a Round Hole, July 31, 2010

A Kid's Review

This review is from: Redefining Health Care: Creating Value-Based Competition on Results (Hardcover)

Porter's theories on management are the bread-and-butter of management theory but he knows little about healthcare. It would be fantastic if his elegant theories worked for this industry, but they don't.

Serious flaws:
Authors: Care value should be measured by outcomes.
Reality: This is the fundamental problem with the healthcare market is that even the end-user of cannot fully assess the outcome not to mention the medical interventions' contributions to that outcome. Diseases recur and response to medical treatment varies so greatly that doctors rarely agree on the simplest courses of treatment. Only for the most common disease states will there be consensus on intervention. The authors compare the healthcare consumer to the institutional purchaser of computer systems, people that are generally IT experts. This is akin to comparing all patients to nurses.

Authors: Competition should exist at a national level.
Reality: Patients are cured locally because sick, pregnant, working people, etc., do not want to travel to another city to get specialized care. In fact, Guy David's studies show that proximity of less than half a mile holds more sway for patients than expertise. One can't purchase healthcare over the internet. Nor can patients in the bottom 50% of wage-earners travel to another metropolitan area every month to see a field expert.

Authors: Community-based hospitals repeatedly produce better outcomes than academic institutions
Reality: Patients with difficult-to-treat medical conditions are referred to or self-refer to academic medical centers so the sample group is biased.

It's no surprise that Porter missed some of the most obvious aspects of defining the problem. The acknowledgements section of the book contains few of the renowned experts in the field. The centers of knowledge do not lie in the management departments of Harvard or Darden. The authors seem to only have corroborated their theories with individuals from other industries, second-rate scholars, and politicians.

It was frustrating to have to read 411 pages of repetitive and ignorant text. While Porter has created groundbreaking theories in management (specifically of manufacturing and less-specialized service industries) he is attempting to fit his famous theories where they do not fit.

One must admire the attempt to write a comprehensive solution to the problem of the US healthcare system. However, it's an effort fraught with laziness and little introspection. The book, however, has a decent reference section. Either the authors did not read these papers themselves or chose to ignore the most salient points in the works of the field experts. If you want to real scoop, read Halvorson, Pauly, Danzon, Fisher, or anyone else who has studied this field for more than the authors' seven years.

Halvorson's Health Care Reform Now is a far superior book because it provides actionable remedies for the health care problem. Furthermore, Halvorson has 30 years of healthcare experience (compared to Porter's 3 years when he wrote this book). In addition, Halvorson has actually implemented his suggestions. Also, he cites credible organizations and publications that actually support his suggestions (RAND, IOM) whereas Porter cites and collaborates with organizations merely willing to collaborate with him (Dartmouth and Harvard - two institutions with very little research and health care specialists).

Halvorson's book may not have as thick a list of citations as Porter's; however, it makes its point more concisely and much more effectively than Porter's.

In Porter's defense, since writing this book, he has become more knowledgeable about health care and his arguments are starting to make more sense. Redefining Healthcare proves the complexity of health care by demonstrating how difficult it is to apply basic theories of other industries to fix the health care system.

Halvorson's book along with R. Lawton Burn's The Business of Healthcare Innovation are the two most valuable books on the American health care system. You can read them both in half the time it will take you to read Redefining Healthcare and you will be twice as knowledgeable.

25 of 32 people found the following review helpful:

3.0 out of 5 stars Too redundant and pedantic, November 5, 2006

By 

D. Racer (Twin Cities, MN) - See all my reviews
(REAL NAME)   

This review is from: Redefining Health Care: Creating Value-Based Competition on Results (Hardcover)

Health care reform is a critical issue. The authors are well-known, highly educated, and know their subject well. Unfortunately, they wrote a book whose redundancies, especially in the opening chapters, drives the reader to boredom. Likewise, the reader feels at times as though the good professors were trying to fulfil a mandatory page count, and therefore, inserted much irrelavant data. Frankly, I set the book aside, planning on finishing it after more readable books have been read.

11 of 14 people found the following review helpful:

5.0 out of 5 stars Outstanding!, August 2, 2006

By 

Loyd E. Eskildson "Pragmatist" (Phoenix, AZ.) - See all my reviews
(HALL OF FAME REVIEWER)    (REAL NAME)   

Amazon Verified Purchase

This review is from: Redefining Health Care: Creating Value-Based Competition on Results (Hardcover)

"Redefining Health Care" begins with data detailing the failures of America's "health system" - the highest and most rapidly rising costs among modern nations, combined with millions of uninsured, high error rates, and an average 17 years for the results of clinical trials to become standard clinical practice. Thus, the puzzle: "Why is competition failing in health care?"

Porter and Teisberg's answer is that it focuses far too much on cost-reduction, increasing negotiating power, providing broad-lines of service, and cost-shifting, and instead should focus on long-term value (results vs. costs) for patients. Key to accomplishing this is the collection of standardized patient outcome data (preferably risk-adjusted) that are used to identify providers needing improvement and sources from which that improvement can be gleaned, as well as in guiding patient decision-making.

"Redefining Health Care" also asserts that its recommendations are not just theories, but also supported by a number of cited examples.

This book provides a clear vision of how the U.S. can reduce health care costs while improving patient outcomes - without increased complexity. It should be read by legislators at both the state and national level, as well as by health care providers.