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Market-driven Health Care: Who Wins, Who Loses In The Transforation Of America's Largest Service Industry Hardcover – January 6, 1997

2.9 out of 5 stars 13 customer reviews

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Editorial Reviews

From Library Journal

Herzlinger (Harvard Business Sch.) contends that improvements can be made to the American healthcare system by removing our current third-party payment system and allowing consumer demand to lead the healthcare market. Using eyewear as an example, Herzlinger shows how this consumer-driven market provides convenient, focused services with competitive prices. Most vision care services are not covered by medical insurance, forcing this sector of healthcare to respond to consumer demand. The author provides additional case studies, both within and outside the healthcare industry, that illustrate how team building, focusing on specific products and services, and prudent investments in technology can lead to convenient, cost-effective healthcare. While Herzlinger admits that abolishing the third-party payment system will present numerous difficulties, she includes suggestions for overcoming many of them. Written in a straightforward, readable style, this book is recommended for all libraries.?Tina Neville, Univ. of South Florida at St. Petersburg Lib.
Copyright 1997 Reed Business Information, Inc.


How does American business hold lessons for health care management and the health industry? Herzlinger's focus on consumer demands, changing market requirements, and business impacts on health organizations and structures provides an analysis of service provides' business practices, revealing how such providers succeed - and fail - in their jobs. -- Midwest Book Review

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Product Details

  • Hardcover: 416 pages
  • Publisher: Basic Books; 1St Edition edition (January 6, 1997)
  • Language: English
  • ISBN-10: 0201489945
  • ISBN-13: 978-0201489941
  • Product Dimensions: 1.5 x 6.5 x 9.5 inches
  • Shipping Weight: 1.6 pounds
  • Average Customer Review: 2.9 out of 5 stars  See all reviews (13 customer reviews)
  • Amazon Best Sellers Rank: #1,855,663 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

By Michael Considine on March 14, 2004
Format: Paperback
No one will accuse Ms. Herzlinger of being a great writer, but her conversational style is easy to read and she does have some good ideas for how the healthcare industry should be. Ideas that still haven't been implemented even now, 8 years after it was written. She does make a fairly convincing argument for how focused factories could reduce costs. In addition, suggestions that everybody should have health insurance, that healthcare providers should not be insulated from market forces, that consumers are the ones with the real power to stop the soaring healthcare costs, and that they'll only curtail spending when given incentive to do so are good points that can't be made often enough. Points that seem even more relevant today given the continued increase in healthcare costs, the inability of the HMO system to manage them, and the spiraling problem the growing uninsured population is creating (the more uninsured people there are, the more insurance costs, which increases the number of uninsured, etc.). She has good ideas, I think it's time people listened. It's of vital importance that the healthcare system incorporate what's great about America, what has made America a leader in every other industry: innovation and sensibly regulated free markets. Ms. Herzlinger gives us a good way to get it done.
I also have to ask if some of the other reviewers actually read the book. The author gives a pretty good analysis of how focused factories would reduce costs, using that 20% of the people produce 80% of the costs as a cornerstone of her argument. Also, she cites physicians' inability to deal with market forces as a cause of the problem and gives suggestions for how to deal with it.
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Format: Hardcover
Any health care analysis is going to be wide ranging and possibly a little rambling. This book is no exception.
Regina's book makes a good case for individual responsibility for health care purchases, though that may be a difficult and extended transformation.
A more important point for me was applying the "Focussed Factory" concept to health care delivery. This is such an ideal approach for chronic disease management or popular surgical procedures. Regina sites statistics and actual patient outcomes to effectively make her argument.
The "Focussed Factory" is something we can implement right now. That may be the core value of this book.
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Format: Hardcover
There's hope. Finally, a clear thinker presents a viable case for something other than a purely political solution to the continuing health care cost crisis. Herzlinger is anything but pithy. However, buried in the laborious presentation of her case is a blueprint for the only real solution to this critical problem (i.e., a serious dose of personal responsibility for the cost of health care by those who create the demand). This book is worth reading.
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Format: Hardcover
The author accurately identifies a subpopulation of patients who are middle class,time constrained, and annoyed with the difficulty of obtaining quick evaluation and therapy for a variety of health problems of varying complexity. After examining a number of systems for health care delivery, she gives the nod to highly specialized and focused units such as the Shouldice Clinic for hernia surgery in Canada. There are several problems with the soultions she proposes: 1) Goverment regulatory agencies and third party payers currently refuse to pay multiple consultants for seeing a patient on the same day. 2)Patients with complex multisystem problems may be ill served in such a focused system- eg. the patient who has congestive heart failure and a hernia. 3)There would monumental problems with education of medical students and residents in such a system. While this is a secondary consideration in a market driven system in which there is a physician surplus, if we fail to adequately educate physicians for future generations the law of supply and demand will ultimately come back to haunt us.
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Format: Paperback
Herzlinger is a card-carrying member of the club that believes that markets can cure all social ills, and like all members of this club, she plays fast and loose with reality. For instance, she tries to present the vision market as an exemplar of how market forces can work in healthcare. Vision is one of the few areas of medicine where patients can appraise the value of the service, the quality of the provider, and make decisions about how much they are willing to pay. That is simply not the case when a patient is really sick with heart failure, and needs multiple medications, multiple doctors, and is probably going to be hospitalized repeatedly.

In trying to argue that all aspects of medicine can follow market rules the way vision services do, Herzlinger conveniently ignores one critical fact: there is no true market in the healthcare industry, and there can't be. Kenneth J. Arrow, Nobel Prize winning economist pointed this out 30 years ago, and his observations are still true today. Providers (doctors and hospitals, and increasingly the drug and device industries) drive demand for their services. They are the ones who decide what patients need. The notion that patients can have suffient information to be able to determine what they need is probably only true for the 80 percent of people who consume 20 percent of healthcare costs. The 20 percent who eat up 80 percent of costs are sick with multiple conditions. Imagine your grandmother is in the hospital, sick with diabetes, and pneumonia, scared, having a hard time breathing, and she's supposed to sort through whether or not she should pay the $600 to call in the pulmonologist? The patients with chronic, multiple, debilitating disorders actually need the exerpertise of medical professionals.
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