Michael Porter takes on health care

I went to a talk given by Professor Michael Porter while attending my wife’s business school reunion this weekend. He wrote a Harvard Business Review article about health care (see Finding a Lasting Cure for U.S. Health Care) and got such a big response that he decided to write a book.

None of what I heard was brand new. Yet it was helpful to have a big name thinker from outside the field turn his attention to health care and provide a framework for reform. He didn’t oversimplify too much, and adopted a constructive tone.

Porter focused on a paradox: the US has the most competitive health care system in the world, and yet costs are high and quality is poor. Key points he made included:

  • The system should be organized around value for patients. The focus now is on “zero-sum” competition, which is not about value, but cost shifting
  • Competition is organized at the wrong level (i.e., the hospital) and should be done at the disease level
  • Competition should be organized on a regional or national basis, rather than locally

Porter was also highly critical of the state of health care quality

  • “No matter who you are,” you can’t find out who the best doctors are. The doctors themselves don’t know
  • Quality initiatives (like Leapfrog) are really just process compliance initiatives

Porter doesn’t have all the answers, but he is asking the right questions and holding the US health care system up to the standards of world class industries. I look forward to reading his book.

June 5, 2005

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