Providers - Redefining Health Care - Institute for Strategy and Competitiveness at Harvard Business School

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Hospitals, clinics, physician groups, and individual physicians are the central actors in the health care system. These providers have tremendous opportunities to increase value for patients by adopting a more strategic approach and structuring their work around specific medical conditions over the full cycle of care.

There is no need for providers to offer all services to all patients: the greatest improvements in health care outcomes and efficiency will come from sustained, team-based focus on a carefully defined set of medically-integrated services and practices. Integrated practice units will achieve scope and scale by growing locally and geographically in their areas of strength, rather than expanding the breadth of their service offering.

The best, most innovative providers will be rewarded with more patients as their results, in terms of patient outcomes , become widely known. This will set in motion a virtuous circle in health care delivery, and unleash stunning advances in health care outcomes per dollar of cost.

Providers need not wait for government intervention to take the first steps toward value-based competition. Many excellent providers have already begun, as described in numerous examples in the book.

Redefining Health Care offers a series of practical steps toward value-based competition for providers at all levels of the system, as well as a set of implications for individual physicians:

Moving to value-based competition: Imperatives for providers

Redefine the business around medical conditions
Choose the range and types of services provided
Organize around medically integrated practice units
Create a distinctive strategy in each practice unit
Measure results, experience, methods, and patient attributes by practice unit
Move to single bills and new approaches to pricing
Market services based on excellence, uniqueness, and results
Grow locally and geographically in areas of strength

Implications for Individual Physicians

Medical practice must be designed around value for patients, not convenience for physicians.
The business of physicians is addressing medical conditions, not performing a specialty. Physicians must understand what different businesses they are in.
Patient value comes from expertise, experience, and volume in particular medical conditions. Physicians must choose those medical conditions in which they will participate and achieve true excellence, rather than try to do a little of everything.
Health care value is maximized by an integrated team, not individuals acting and thinking as free agents. Physicians must know what team or teams they are part of, and ensure that these are functioning as teams.
Physicians rarely have full control over the value delivered to patients, but are part of care cycles. They need to know what care cycles they are involved in, and how to integrate care with both upstream and downstream entities to ensure good patient results.
Every physician must be accountable for results. Intuition and personal experience are no longer enough.
Physicians have no right to provide care without demonstrating good results. Results should be made available to patients, other providers, and health plans as soon as measurement is reliable. Physician referrals should be based on excellent patient results, together with the ability of referred providers to share information and integrate care across the entities involved in the care cycle.
Electronic records and the ability to exchange and share information are indispensable to excellent medical practice. Physicians will limit effectiveness unless they wholeheartedly embrace IT.
Every physician should be responsible for improving his or her own process of care delivery, using systematic methods based on measurement of results, experience, methods, and patient attributes.
Physicians must seek out partnerships and relationships with excellent providers in their areas of practice in order to access knowledge and improve the integration of patient care.