Michael Porter gets it right

Harvard Business School Professor Michael Porter is a super-smart guy and he’s written an excellent perspective in the New England Journal of Medicine, A Strategy for Health Care Reform –Toward a Value-Based System. (This article is available free; you don’t need a subscription.) I haven’t always agreed with Porter on health care but since I basically agree with everything in this article, I’ll summarize it here.

Porter wants to turn the focus to value: health outcomes achieved per dollar spent. The higher the better. Achieving true reform requires moving to universal coverage and restructuring the delivery system. The key is to shift to universal coverage in a way that supports restructuring of the delivery system around value.

For universal coverage, Porter suggests these steps:

  1. Make insurers compete on their ability to improve the health of their members, not on medical underwriting, denial of services and negotiation of discounts.
  2. Keep employers in the insurance system, since they have a vested interest in keeping their employees healthy.
  3. Equalize the tax treatment of health insurance paid by employers and individuals.
  4. Institute statewide or multistate insurance pools for individuals.
  5. Provide subsidies for those who can’t afford insurance
  6. Require everyone to buy health insurance once the first few steps are in place

For delivery system restructuring, Porter wants to see:

  1. Measurement and dissemination of health outcomes by providers
  2. Reorganization of prevention, wellness and primary care –he cites employer clinics as a good model
  3. Reorganize the delivery system around medical conditions. (Here he seems to have added some nuance, with an acknowledgment that we need to think about comorbidities and complications, too.)
  4. Institute bundled payments rather than fee for service
  5. Require providers to compete for patients based on value
  6. Use electronic health records –but he points out this will only work if it’s done in the context of integrate care and outcome measurements
  7. Encourage consumers to become more involved in their health and health care

I especially like the fact that he saves the EHR and consumerization points for the end, rather than the beginning, where it’s unrealistic for them to add value.

June 3, 2009

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