Customer Reviews

Redefining Health Care: Creating Value-Based Competition on Results

5 star:		(15)
4 star:		(9)
3 star:		(4)
2 star:		(1)
1 star:		(7)

 

 

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.

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.

"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.

This book by Porter and Teisberg contains the only new and untried model for health care in 70+ years. Conceptually, it is remarkably simple: regroup health care thinking and payment to providers by disease, what the authors call "medical condition." Like PPOs in the 1980s, this essentially private solution can be put in place quickly. It requires no government action or legislation, as a legal matter is not insurance in key respects and thus is not limited to insurers and HMOs but can be implemented by a large variety of innovators, without state insurance regulation. Among its breakthroughs are its focus on health care results for patients, and its rejection of two conventional assumptions: that doctors and hospitals should be paid separately regardless of patient outcome and that health care is local.
Their book makes America's health care system today like the horse and buggy industry in 1890 -- and it's a detailed guide to the automobile.

Why doesn't it follow the progression to higher quality and lower prices as most other industries do? These are some of the questions that authors Michael Porter of Harvard Business School and Elizabeth Teisberg of University of Virginia School of Business attempt to answer. The book paints an accurate portrait of the shortcomings of the US health care system, which fails to identify and scale up providers who provide the highest quality health care at the lowest cost.

Health care providers, health plans, payers, and consumers are responsible for our low performing, high cost health care system. Real reform of the system has implications for all stakeholders and, optimistically, this reform is already underway. Improvements in health care quality reporting and access to these data by consumers and payers is increasing, providers are consolidating from solo private practices to medical groups wherein health plans are supporting transformations to patient center medical homes that actively manage patient health status through preventive care and case management. Employers are expecting that health plans augment their provider contracting discounts and claims processing with health and wellness programs, including disease management. Health care technology, including electronic medical records and telemedicine, are improving the portability of health information and enabling remote hospitals to instantly access medical specialists at nationally and internationally recognized hospital centers.

The authors do an excellent job of highlighting the levers in the domains of each stakeholder that must be switched on for transformation to a value based market place to happen. I argue that it will happen out of economic and technological developments, as well as the influence of globalization, rather than via any significant policy changes, with the exception of a government mandate for individual health insurance coverage that has now been passed at the federal level.

Even though I share the opinion of several other reviewers that the book is unnecessarily lengthly and redundant, I do recommend it for its broad viewpoints and substantial supporting case studies.

Michael Porter, of value chain and competitive advantage fame, has taken on the US health care system. Your reviewer, who is speaking from inside the system, can guarantee that both his diagnosis and his proposed fix are bang on. In short, you bring the US healthcare system in line with other industries by making information about the outcomes of healthcare available to consumers, then letting them choose. How to get there from here takes up most of the book, and it is as brilliant and thoughtful as Porter fans have come to expect. Read this one.

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.

Porter's analysis of the health care system and its problems is right on yet his solutions could not be farther from the direction that the health care system must move to become a real system that serves all Americans. There are so many flaws in the logic of the book and it is so impractical in its recommendations that I am not concerned that anyone will see it as a route to solving the ills of the US healthcare system. Here are some of the main flaws.
1) Most people have very limited choice of providers - specifically the uninsured, people in rural areas, people in managed care plans, people whose employers offer only a limited selection of plans/doctors/hospital. In order for "results" to drive increases in market share - one of Porter's main theses, people have to be able to choose where they will go for care.
2) Competition related to outcomes will slow down progress in medical care dramatically. Hospitals and doctors, rather than rushing to share their newly discovered procedures with others - or share "best practices" for improving surgical outcomes will be incentivized to keep this "results" producing findings to themselves so they can publish better outcome statistics and attract more business. Is this what we want? Don't we want physicians and institutions to openly share best practices to help everyone achieve better outcomes?
3) Porter believes that people should get care from the "best" specialists - even if this means travelling to another city or state for that care. Ridiculous! Once again this will increase the disparities in health outcomes between the rich and poor, the insured and the uninsured, people who have lots of medical knowledge and those who have little medical knowledge. People better equipped, educationally or financially or through insurance coverage may travel to places to get better outcomes while the others get inferior care. Is that what we want from our new health care system?

Porter's logic is seriously flawed. It is the result of a profit-oriented mind trying to create solutions for a system that cannot be driven by profit but one which must be driven by concern for all Americans - a desire to achieve excellence wherever people go for care - and a need to raise the level of performance of all doctors and all health care institutions. Porter's solutions create an elitist model where care will improve for a very small number of people at the expense of the general population. It is a non-solution to a complex problem.

If any proof is needed concerning how wrong Porter's model can be one must look at the data concerning the degree to which the poor and the uninsured go to hospitals doing low volumes of procedures and therefore, by implication, have worse outcomes. These are the very places where the uninsured, people of color and others of limited means get a majority of their care in urban areas. Just ask how Porter's solutions purport to help these underresourced institutions "compete" and as they loose resources to others, how they will maintain and improve the standard of services they now provide.

If you read this book, think about these issues and ask yourself if these are real solutions that serve all Americans. I think you'll see what I mean.

As the son of a physician, I have a fondness for all things medical... except the current state of our American health care system!

Michael Porter and Elizabeth Treisberg have done the nation an oustanding service to analyze the current mess and propose a meaningful way forward, based on the successful strategic principles of competition. Rather than think about "procedures", "access", and "costs", they call us to think bigger about "patient-centric", "care cycles", and "outcomes based". As the new Obama administration prepares to undertake what many think will be a massive overhaul of the system, all health care consumers--which is all our us!--should read this book to be informed participants in the coming Great National Healthcare Debate.

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.