March 23rd, 2007
We want to thank those who contributed to a lively debate about our book, Redefining Health Care. James Robinson sums up our argument succinctly: “Porter and Teisberg appropriately emphasize the central role of the organization and delivery of care, putting it ahead of insurance, consumer choice, employer purchasing, and government regulation. Of course, payment, choice, purchasing, and regulation, the whole demand side of the market, are crucially important, but it’s at the provider level that quality, efficiency, and customer satisfaction happen or don’t.”
Today, twenty-first-century medical technology is often delivered with nineteenth-century organizational structures and management practices. Siloed specialties, fragmented care, fragmented provider entities, little or no results measurement, primitive cost accounting, and outdated information technology — no wonder quality is uneven and costs are high and rising.
Access and cost containment have been such intractable problems that they dominate the policy debate. Universal access is essential for both equity and efficiency, but the deeper problem is value. If reform fixes access but leaves the delivery system unchanged, universal insurance combined with an aging population will mean that costs skyrocket. Only by truly restructuring the organization and delivery of care will dramatic improvements in value be achieved. Incremental improvements in processes, or rewards, or waste reduction in current structures will not be enough.
But how can the nation fix anything as complicated as health care delivery? Gail Wilensky and Uwe Reinhardt have certainly earned the right to remind readers that “getting from here to there” is really hard work. Indeed, expecting a governmental “big bang” to fix the problems would be naïve. Fortunately, that is not needed. Markets can deliver stunning improvements in quality and efficiency when competition operates on the right things. The focus must be to enable competition to achieve excellent health results. The nation can no longer afford a system where the financial success of the players in the system is disconnected from success for patients.
Value for patients is created by improving results over the full cycle of care for their medical conditions, where a medical condition means a set of interrelated medical circumstances that are best treated in an integrated way (e.g., pages 44, 105, 419). This suggests a radical change of organization from traditional medical specialties to a patient-centric model. Impossible? Organizations in the vanguard are already beginning these strategic changes, which is how industry restructuring usually occurs.
The nation will achieve dramatic improvements in health care faster if there is widespread agreement that the primary goal is to improve value for patients. Such agreement would encourage widespread measurement of results (risk-adjusted outcomes and prices) at the medical condition level.
There will be different approaches to pursue value improvements, and that is fine. Alain Enthoven, for example, believes that integration of health plans and delivery systems can ultimately be more effective than our proposal for multispecialty practices organized around the patient for each medical condition. (For our deep concerns about integrating payers with providers, see our 14 March 2007 JAMA article [subscription required] and pages 165-167 of Redefining Health Care.) However, competition on results at the medical condition level will leave room for many types of practice models to prove their value.
The restructuring we envision will be both evolutionary and revolutionary. Well-chosen policies can accelerate change, but value-based competition cannot be mandated from the top down. The “hard stuff” that Wilensky looks for — the details of restructuring — will come from health care professionals themselves, from the bottom up. This vision is not government-led, consumer-driven, or payer-centric. Value-based competition is physician-led, results-driven, and patient-centric.
Already, the pace of innovation is accelerating. While the barriers to restructuring delivery structures, reimbursement, and information are formidable, achieving only 50 percent of the goal will still leave all parties far better off. There is no reason to throw up our collective hands, as Reinhardt suggests. The opportunity for reform is far greater today, with health care in crisis, than a decade ago. Today, no one is defending the status quo.Email This Post Print This Post
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