Redefining Health Care: Creating Value-Based Competition on Results

Book Description

The U.S. health care system is in crisis. At stake are the quality of care for millions of Americans and the financial well-being of individuals and employers squeezed by skyrocketing costs--not to mention the stability of state and federal government budgets.

In Redefining Health Care, internationally renowned strategy expert Michael E. Porter and innovation expert Elizabeth Olmsted Teisberg reveal the underlying and largely overlooked causes of the problem and provide a powerful prescription for change. The authors argue that participants in the health care system have competed to shift costs, accumulate bargaining power, and restrict services rather than create value for patients. This zero-sum competition takes place at the wrong level--among health plans, networks, and hospitals--rather than where it matters most: in the diagnosis, treatment, and prevention of specific health conditions.

In spite of competition among these systems, the patient care cycle is poorly coordinated. The fractured system undermines both efficiency and quality of outcomes.

Redefining Health Care lays out a breakthrough framework for redefining health care competition based on patient value over the full cycle of care—from prevention and diagnosis through recovery or long-term disease management. With specific recommendations for hospitals, doctors, health plans, employers, and policy makers, this book shows how to move to value-based competition on results that will unleash stunning improvements in quality and efficiency.

Customer Reviews:

How sick is US Healthcare.......2007-10-17

Interesting view on the actual US healthcare and a challenging way to solve the mailaise

Excellent analysis with some weak points.......2007-09-01

This book has received probably disproportionate attention due to Prof. Porter's notoriety as a strategic thinking theorist. There are better overall books on healthcare policy available. In particular I recommend the Bodenheimer/Grumbach books, one on healthcare policy and one on primary care, Dr. Arnold Relman's book, A Second Opinion, Strained Mercy, an outstanding and thorough analysis of healthcare economics with particular regard to Canada's healthcare system, among others.

I find the analysis of the USA healthcare system by Profs. Porter and Teisberg to generally be excellent, although I find it wanting in regard to their disparagement of a single-payer/single-insurer system and to their description and analysis of healthcare systems outside the USA. From my perspective private health plans play only a net negative role in the system. The authors' analysis of how the health insurance market works is quite good. However their recommendation that a system of private insurers should persist is refuted by their own analysis! A single payer/insurer system will not cure the problems of the US system, as they clearly point out, but it does remove the inherently dysfunctional characteristics of private insurance, not least of which is its failure to meet the needs of the uninsured - a very large number - and its inherent propensity to exclude the very people who need coverage and care. The authors rightly point out that mandatory health insurance along with risk-pooling among insurers to spread the costs of those insured individuals who generate the highest costs is a "solution" to the current non-functioning system, but the same result, at lower cost and with much greater simplicity, can be achieved through a single payer/insurer.

The other key aspect of healthcare - how it is delivered - is ultimately more important than the financing/insurance side. The authors provide excellent analysis and recommendations in this regard. They correctly address the aspects of the healthcare market that prevent its functioning as a "competitive" market, specifically the abysmal lack of patient information on prices for services, on outcomes of actions by providers, comparative statistics on provider performance and similar. They also provide an interesting report by the Cleveland Clinic on outcomes, i.e. results, of the Clinic's heart surgery activity. They appropriately use this as an example of the kind of reporting that is needed.

The authors' analysis of healthcare systems outside the USA is skimpy and inaccurate in my opinion. The authors underplay the demonstrated efficacy of government-funded systems that outperform the USA system almost across the board in gross measures of outcomes (infant mortality and longevity) and vastly outperform the US system in regard to cost. They gloss over the fact that per capita costs in the USA are 2.5 times! the average of other OECD countries. It is not as though the costs are say 10% above the average with comparable outcomes. They are 150% higher with worse outcomes. Instead of noting this and analyzing it thoroughly, the authors assert that waiting times and rationing of care are significant problems in those countries, assertions which are simply not borne out by a closer examination of the facts. Also the fact that (mostly) single-payer/insurer systems function well universally does not fit the authors' main thesis, so rather than revise the thesis based on this evidence they choose to ignore the evidence.

As a consequence of these limitations I rate the book with 4 stars rather than 5. Too bad, because most of the book is excellent.

Redefining Health Care.......2007-05-23

Book Review
Redefining Health Care by Michael Porter

I am writing this review to help share some excellent ideas on the availability and quality of medical treatment in the United States and on the U.S. economy which is being dragged down by ever-increasing medical costs. The economic impact is not just on corporate profits and stock prices but also on U.S. employment because everything that raises costs makes it harder for U.S. manufacturers to compete with foreign suppliers and makes it harder for U.S. manufacturers to sell in foreign markets.
Unfortunately, the book is long, turgid, and full of details, which help to substantiate his conclusions and also provide guidance on implementing improved policies. I am afraid the book does not appeal to executives, politicians, or doctors. It also proposes radical changes in all aspects of the medical system and its financing and operation. Dr. Porter proposes major changes on the part of all parties involved in delivering and paying for health care.
The book begins with a review of health indexes and health care throughout the world and shows, while the U.S. has the greatest expenditures by any set of measurements, it does not have the best results.
Then, Dr. Porter introduces his most important concept: that any medical treatment should be measured by its results; how much lost time and discomfort did the patient have, is he or she completely cured, or how much disability measured over the entire span of the illness or even the life of the patient. We tend to think of an operation as being successful if the patient left the hospital in good condition. But how much additional recovery time, disability, or reoccurrence was there? If the patient doesn't come back to see him, a doctor doesn't know whether he was cured by the treatment or if the patient was so dissatisfied he went to another doctor or simply gave up on a series of treatments. The goal is to develop a scoring system for each group of illnesses that can be compared with the cost of each individual's treatment and their results to determine what is the best set of procedures and the best doctor or group of doctors to do the work can be used to guide providers and treatments. Porter has some reason to believe that the best treatments are generally less costly even though the individual item costs may be more, the greater effectiveness and the less chance of complications reduces overall cost. Included in the overall cost should be lost wages, which is a reasonable proxy for the patient's time.
The goal is to develop a health plan that pays for results not for treatments. In many cases, that would be a single payment to the provider for a whole series of treatments from diagnosis on through operations, post-operative care, and follow ups which could extend over a long period of time. This is a radical change from the present system which pays for treatments and tends to produce more treatments and does not have any effective means for either the insurers, or the employers, or the patients even to compare one treatment option with another. This is an extreme, radical change and would take a long time to implement, but there are pieces of the program in operation. A number of these are explained at length. Health insurance companies could hire these firms for their specialized expertise and would not have to do the work on their own. An example of what is done is how the firm studies the history of heart transplant patients and will give an insurance company a single payment for the entire course of treatment providing it is done in the manner and by people they specify. They would particularly focus on caregivers who have an outstanding record of success. It appears that for most illnesses, there are organizations that are substantially better than others and this program could be extended broadly.
Another area of development would be to have counselors which would be part of the function of the insurer to advise a company's employees with a list of particularly well qualified doctors and suggest treatment elements.
Government would seem to be poorly adapted to facilitating these changes because they are radically different from Medicare. Medicare seems to promote cheap, but not necessarily effective treatments and set arbitrary pay scales which do not allow the better providers to charge more for their services and thus encourage more providers to be in the high performance category. Companies that pay for the insurance are the ones that have to put pressure on the insurers to implement the above changes. This could not be done over a short period of time but would eliminate a lot of the wasted time that is now involved in the payments for each little step of the process and for each treatment step.
Chapter 8 is a detailed discussion of how to implement the aforementioned concepts using modifications of Medicare and other laws. This is too complex to summarize here but it appears doable if Congress and the Executive are sufficiently motivated. It is likely that few people would understand what is happening, but the benefits to cost ratio is sufficiently great that the changes would probably be supported and accepted. On the other hand, the situation is so complex, it is questionable whether lawmakers and administrators would be willing to undertake the many complex tasks required. On the other hand, the downside risk appears quite small.
Porter approaches the whole subject from the points of view of business strategy and the problems of decisions with very imperfect information. While the government frequently acts with very imperfect information, its strategy for doing so is not well developed and poorly applied.

Redefining Health Care: Creating Value-Based Competition on Results

A new look.......2007-05-20

Though a little dry, and at times repetitive, this book offers practical information. In a mess of books describing the massive problems in healthcare today, this book was at once motivating and up-lifting. I bought it for a class, but it is one of the books I'll be keeping instead of passing along at the end of the quarter.

Disappointed but Some Might Find Value.......2007-04-05

I'm a big fan of Porter, but I was somewhat disappointed by this book. Let me be frank. The first problem I have with the book is that the authors try to capture as large of an audience as possible, being careful not to place blame on certain providers within the health care system. That approach might get better reviews and sell more copies, but it is not delivering real value. One cannot escape mention of the realities of corruption and fraud by every player in health care and expect to address the problems.

The second problem I have is that Porter fails to recognize that health care is distinct from any other industry in America because it is highly politically influenced. Much of the health care system is public (government funded). This is a main reason why competition in this industry is highly ineffective. How can you have a pure competitive environment when poor performing providers continue to receive government-funded contracts? How can you have full competition when Washington merely fines providers for fraud with no jail time? How can you have competition that creates value when Washington places the burden of increasing costs upon taxpayers, letting the industry charge what it needs to deliver earnings that Wall Street expects?

Overall, by failing to address the harsh realities of politics and big money within America's health care industry, Porter's book is too idealistic and therefore falls short of offering a real solution. Regardless, it is a quality book and at least does what no other has in trying to approach the problems from a reasonable standpoint. I expected more from him, but clearly this book is a view from academia and is far detached from many realities of big industry in America. There are many good points in the book, but without addressing the main problems of a system whereby lobbyist groups who control health care policy, very little will change.

Creating a Total Rewards Strategy: A Toolkit for Designing Business-Based Plans

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Rewarding Read
A textbook on employee rewards
Great Resource!
A great tool and and resource!
Superb!...

Creating a Total Rewards Strategy: A Toolkit for Designing Business-Based Plans
Todd M. Manas , and Michael Dennis Graham
Manufacturer: American Management Association
ProductGroup: Book
Binding: Hardcover

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ASIN: 0814407226

Book Description

Salary, bonuses, benefits and "perks" may be the most visible elements of a rewards program, but other components are just as valuable to employees. This comprehensive book and CD-ROM package shows how nonfinancial rewards can be quantified and combined with monetary measures in a way that complements business objectives.

The authors' eye-opening research on what employees value is backed up by examples from their own consulting experience. The book's step-by-step process features more than 100 practical tools for developing an "M3" rewards system based on money, mix, and message, and provides a blueprint for creating a custom-tailored rewards strategy to match an organization's specific goals.

Customer Reviews:

Rewarding Read.......2006-12-09

This is an excellent book, especially for HR/C&B practitioners. Like most HR topics, reward strategy is common sense and this book structures it neatly. A fantastic reward strategy framework - shows the inter-related nature of all stratgies and the operationalised details of a compensation strategy.

The book is comprehensive, yet accessible.

Nice to have all the PowerPooint slides on CD in the back cover, too.

A textbook on employee rewards.......2003-11-03

If you enjoy working with university textbooks, you'll appreciate this book. It feels like a college text. It looks like a college text. It's filled with graphs and charts like a college text. It's seasoned with case studies in call out boxes. There are endnotes, as well as a bibliography. The index is so full of references, a smaller type was used-perhaps to save space.

The authors' message is that the secret to developing a creative and effective rewards strategy is based on a combination of Money, Mix, and Message. The Money aspect addresses the value of the reward(s) to the employee. The design of the plan, constructed to meet employer and employee needs, is the Mix. The Message deals with what the employer wants to communicate to its employees about appropriate values and the company's expectations. The authors describe their approach as "M3," emphasizing the need for a good balance between the three factors.

Readers will explore more than a hundred practical tools for building what they call the M3 Reward System. Financial rewards are integrated with non-financial rewards. Application of the step-by-step strategy promoted by the authors is a CD-ROM that is loaded with tools, exercises, and techniques to equip readers to tailor their own strategies to be consistent with company needs.

The authors are consultants with considerable experience in serving dozens of Fortune 500 companies. The orientation of the book, understandably, is toward larger companies. Smaller firms will still get a lot out of this text, but may have to invest some serious study time to get the full benefit of the package. The stories relating the authors' experiences are illuminating and add value for the reader who wants to gain the deeper understanding of how customized corporate reward programs are put together and managed.

Hefty price, but fully loaded.

Great Resource!.......2002-12-17

This book is an excellent resource for HR professionals, compensation specialists, and line managers alike.
Well written, with great models and thought processes, yet pragmatic in its approach, this book provides a great fresh look at how to motivate employees to achieve business results.

A great tool and and resource!.......2002-12-12

This book is an absolute must-purchase!...
Compensation and HR professionals in general can derive great insight and value from this work. I recommend it strongly as a cornerstone of every business person's professional library.

Superb!..........2002-12-08

An absolutely wonderful source of information for compensation professionals, HR professionals, and managers of all functions.
This book is a very hands-on, pragmatic handbook for building the rewards systems and structures, which will allow an organization to win the war for talent. I recommend it highly!...

Resouce-Based Theory: Creating and Sustaining Competitive Advantage

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Resouce-Based Theory: Creating and Sustaining Competitive Advantage
Jay B. Barney , and Delwyn N. Clark
Manufacturer: Oxford University Press, USA
ProductGroup: Book
Binding: Hardcover

Strategy & Competition | Management & Leadership | Business & Investing | Subjects | Books

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ASIN: 0199277680

Book Description

The 'Resource-Based View of the Firm' has emerged over the last fifteen years as one of the dominant perspectives used in strategic management. It addresses the fundamental research question of strategic management: Why it is that some firms persistently outperform others? Resource-Based Theory provides a considered overview of this theory, including the latest developments, from one of the key thinkers in its development. In broad terms it offers an alternative to Michael Porter's approach, focusing more on the competences and capabilities of the firm, rather than its positioning in its chosen markets. Jay B. Barney has long been recognised as one of the leading contributor to the resource-based theory literature. In this book he has collaborated with Delwyn N. Clark to produce the first book to examine the theory in a holistic and in-depth manner. The authors explore not only the applications of the theory in research, teaching, and practice, but also its early roots in traditional economic theory, development and proliferation in the 1990s, and later influence on management thinking.

Creating a Business-based IT Strategy (Unicom Applied Information Technology)

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Creating a Business-based IT Strategy (Unicom Applied Information Technology)
A. Brown
Manufacturer: Springer
ProductGroup: Book
Binding: Hardcover

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ASIN: 0412459108

Book Description

This book brings together contributions from consultants, academics and executives with experience in large and small companies. They describe existing IT practice and show how an IT strategy can be developed.
Common problems are discussed, and methods of avoiding them or solving them are explained.

Creating Value through Skill-Based Strategy and Entrepreneurial Leadership (Technology, Innovation, Entrepreneurship and Competitive Strategy)

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Creating Value through Skill-Based Strategy and Entrepreneurial Leadership (Technology, Innovation, Entrepreneurship and Competitive Strategy)

Manufacturer: Pergamon
ProductGroup: Book
Binding: Hardcover

General | Organizational Behavior | Business & Investing | Subjects | Books

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Leadership | Management & Leadership | Business & Investing | Subjects | Books

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ASIN: 0080434444

Book Description

The fields of entrepreneurship and strategic management deal with the fundamental processes and forces that affect the start-up, prosperity, and survival of organizations. In both fields it is argued that a company's potential long-run performance is determined by the degree to which it can develop and maintain a 'fit' between its skills and resources and environmental demands. Through the use of rigorous, in-depth case studies, this book takes a comprehensive look at the process by which leaders, as entrepreneurs and strategists, attempt to build and craft the skill-bases of their firms to best create long-term value for their customers.

Part one examines the foundations of resource-based approaches to management and strategic thinking, and presents a detailed process-typology of organizational resources that serves as a basis for understanding how resources can be leveraged into sustainable strategic advantage.

Part two presents the case histories of four very different firms, including a high-tech chemicals research company, a custom cabinet manufacturer, a large corporate industrial engineering firm, and a craft-oriented surgical instrument maker. Each case provides a unique setting from which insights into the value creation process are presented.

Part three compares and contrasts the insights discussed in the case analysis, and integrates the findings into a 'practitioner-based' model of value creation. This model is then further integrated with current academic theory, and a more formal theory of the value creation process is presented.

In part four, issues such as the 'skill life-cycle', the relationship between technology and human skill development, and leadership styles and processes are discussed. The implications of the research are presented with respect to the practice of entrepreneurship and strategic thinking, to future research and theory in those fields, and to policy choices for government and private leaders.

Values-Based Financial Planning (The art of creating an inspiring financial strategy)

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Values-Based Financial Planning (The art of creating an inspiring financial strategy)
Bill Bachrach
Manufacturer: Aim High Publishing
ProductGroup: Book
Binding: Hardcover

General | Personal Finance | Business & Investing | Subjects | Books
ASIN: B000O61F2C

Product Description

1st Edition / 13th Printing "The rewards from this book will be the invaluable knowledge of how you can make smart financial decisions based on what's most important to you..."

Creating a teamwork-based culture within a manufacturing setting. (Management Strategies): An article from: Industrial Management

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Creating a teamwork-based culture within a manufacturing setting. (Management Strategies): An article from: Industrial Management
Taggart F. Frost
Manufacturer: Institute of Industrial Engineers, Inc. (IIE)
ProductGroup: Book
Binding: Digital

Workplace | Organizational Behavior | Business & Investing | Subjects | Books

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Book Description

This digital document is an article from Industrial Management, published by Institute of Industrial Engineers, Inc. (IIE) on May 1, 1994. The length of the article is 3860 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the supplier: The successful performance of corporations such as IBM, Hewlett-Packard and Procter and Gamble was attributed to the ability of their organizational cultures to maintain an environment conducive to teamwork. To determine the organizational factors which result in a teamwork-based culture and workers' attitudes toward teamwork culture in terms of their job classification, experience and salaries, the blue- and white-collar employees of a leading production/manufacturing firm were surveyed. Strategies by which firms can develop a teamwork-based culture include a commitment to producing quality products, the integration of quality in all departments and to focus on customer satisfaction.

Citation Details
Title: Creating a teamwork-based culture within a manufacturing setting. (Management Strategies)
Author: Taggart F. Frost
Publication: Industrial Management (Magazine/Journal)
Date: May 1, 1994
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: v36 Issue: n3 Page: p17(4)

Distributed by Thomson Gale

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Creating a Business-based IT Strategy (Unicom Applied Information Technology)
A. Brown
Manufacturer: NY
ProductGroup: Book
Binding: Hardcover
ASIN: B000MUIF2I

Book Description

From Conquest to Conservation is a visionary new work from three of the nation’s most knowledgeable experts on public lands. As chief of the Forest Service, Mike Dombeck became a lightning rod for public debate over issues such as the management of old-growth forests and protecting roadless areas. Dombeck also directed the Bureau of Land Management from 1994 to 1997 and is the only person ever to have led the two largest land management agencies in the United States. Chris Wood and Jack Williams have similarly spent their careers working to steward public resources, and the authors bring unparalleled insight into the challenges facing public lands and how those challenges can be met.

Here, they examine the history of public lands in the United States and consider the most pressing environmental and social problems facing public lands. Drawing heavily on fellow Forest Service employee Aldo Leopold’s land ethic, they offer specific suggestions for new directions in policy and management that can help maintain and restore the health, diversity, and productivity of public land and water resources, both now and into the future.

Also featured are lyrical and heartfelt essays from leading writers, thinkers, and scientists— including Bruce Babbitt, Rick Bass, Patricia Nelson Limerick, and Gaylord Nelson—about the importance of public lands and the threats to them, along with original drawings by William Millonig.

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