REDEFINING HEALTH CARE PRESCRIBES ACTIONABLE AGENDA TO TRANSFORM U.S. HEALTH CARE SYSTEM
Renowned Strategy Expert Michael Porter and Innovation Expert Elizabeth Teisberg Identify Competition as Cause for Reform in Health Care
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BOSTON - The United States health care system is on a collision course with patient needs and economic reality. In their new book, Redefining Health Care: Creating Value-Based Competition on Results, Michael E. Porter, Harvard’s Bishop William Lawrence University Professor (based at Harvard Business School) and Elizabeth Olmsted Teisberg, an associate professor at the Darden Graduate School of Business at the University of Virginia – two of the world’s leading scholars on competitiveness, strategy, and innovation – set forth a new vision of the health care system in which every actor is focused on improving value, as measured by health outcomes per dollar expended.
Competition is the single most powerful incentive for individuals and organizations to do things better. And the right kind of competition – competition on value – creates a vibrant innovative environment in which patients as well as providers, health plans, and employers can all win. Published by Harvard Business School Press, Redefining Health Care asks why competition is failing health care, why – in contrast with other competitive markets – lower costs and improved quality do not go hand in hand.
Porter and Teisberg show that in today’s health care system, competition takes place at the wrong levels and on the wrong things. System participants strive to accumulate bargaining power to capture more revenue, shift costs, or restrict services. Instead of rewarding good provider results with more patients, administrators make costly and ineffective attempts to micromanage care processes and second-guess provider decisions. Patient value suffers.
To reform health care, the nature of competition itself must be reformed. In their groundbreaking article in the June 2004 issue of Harvard Business Review, Porter and Teisberg framed the problem. Redefining Health Care provides the solutions. It set forth a comprehensive agenda for how each system participant – providers, health plans, employers, suppliers, consumers, and governments – can redefine their strategies, operating practices, and organizational structures to unleash stunning improvements in health value delivered.
Porter and Teisberg shed new light on:
- Why decades of reform have only made the problem worse;
- How physicians and provider organizations have misunderstood their true business;
- Why other proposals such as consumer-driven health care, integrated health systems, pay-for-performance, electronic medical records, and single-payer systems will not suffice;
- How each participating system can redefine its strategy to increase value for patients;
- Why higher quality should cost less;
- Why mandatory measurement and reporting of patient results is the most important step in reforming the system;
- How mandatory health insurance for all, with subsidies for low-income citizens, will actually make the system more efficient.
According to The Economist, Porter and Teisberg “have written a profound and powerful critique of America’s health care system. It deserves to be read widely. And probably will be.”
Redefining Health Care is available for purchase online:
http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=7782
About the Authors
Michael E. Porter, is the world’s leading authority on competitive strategy and the competitiveness and economic development of nations, states, and regions. In addition to holding a University Professorship at Harvard, the highest professional recognition that can be awarded to one of its faculty members, he heads the Institute for Strategy and Competitiveness, which was created by Harvard University and Harvard Business School to further his research. Porter’s ideas form the foundation for the required strategy course at HBS, and his work is taught in virtually every business school in the world. He is the author of 17 books and more than 125 articles. A Phi Beta Kappa graduate of Princeton University, he received an M.B.A. with high distinction in 1971 from the Harvard Business School, where he was a George F. Baker Scholar, and a Ph.D. in Business Economics from Harvard University in 1973.
An economist with expertise in strategy and innovation, Elizabeth Olmsted Teisberg is an associate professor at the Darden School as well as a Senior Institute Associate at Harvard Business School’s Institute for Strategy and Competitiveness. Her earlier projects have analyzed strategy in medical device and biotechnology companies, the real option value of capital investments, research and development decisions, medical innovation, and managers’ consideration and response to uncertainty. She is the author or co-author of numerous articles in professional publications and is a co-author of The Portable MBA, which has been published in five languages. Teisberg holds MS and Ph.D. degrees from the Stanford University School of Engineering. She also earned a master’s in engineering from the University of Virginia and a bachelor’s degree from Washington University (St. Louis), where she was elected to Phi Beta Kappa.
About Harvard Business School
Founded in 1908 as part of Harvard University, Harvard Business School (www.hbs.edu) is located on a 40-acre campus in Boston. Its faculty of more than 200 offers full-time programs leading to the MBA and doctoral degrees, as well as more than 40 Executive Education programs. For almost a century, HBS faculty have drawn on their research, their experience in working with organizations worldwide, and their passion for teaching to educate leaders who have shaped the practice of business around the globe.