Redefining Health Care: Creating Value-based Competition on Results, by Michael Porter and Elizabeth Olmsted Teisberg, 2006. Boston, Harvard Business School Press. 506 pages, soft cover $35.00.
The Wall Street Journal called Michael Porter the next "Peter Drucker" (WSJ, February 1, 2006, p. A2). Michael Porter is recognized as an expert in competitive strategy; so when he presented applications of his thinking to healthcare at the World Economic Forum in Davos, Switzerland, in the Fall of 2005, people listened. His thinking was dramatic enough to catch the attention of attendees from pharmaceutical companies, hospital companies, public health plans, and other medical organizations from around the world. Elizabeth Olmsted (University of Virginia, Darden School of Business), the coauthor, experienced excellence and barriers in the US health system when her newborn son had a successful open heart surgery. The authors used the term "protracted struggle become nightmare" to describe her experience in circumventing the best healthcare plan to get the best surgeon ("Introduction," p. xiv).
The authors' premise is that everyone involved with healthcare needs to look beyond just cost control and focus on value-doing the right thing, getting good results and providing all of us with quality data as well as cost information. Competition needs to exist along both the dimensions of cost and quality, which the authors define as value. Healthcare's fundamental value proposition thus revolves around cost-benefit analysis, with the emphasis equally on cost and benefit. For the authors, the implications are clear: "The only way to truly reform health care is to reform the nature of competition itself" (p. 4).
The authors analyze the issues in healthcare from 3 broad perspectives: cost of and access to health insurance, types of care that should be covered by insurance versus those that should be the responsibility of the individual, and, finally, the structure of the healthcare delivery itself (which they consider broken and the most fundamental issue). After addressing the issue of competition and these 3 broad areas, the authors devote the remaining chapters to what the key actors in healthcare must contribute to make value driven competition work. Individual chapters focus on the strategic implications for healthcare providers, health plans, suppliers, consumers, employers, and the government itself. How would the industry structure change? "Competition will shift to integrated practice units, based on results. Health care delivery will be fundamentally reorganized and integrated across the care cycle. Results measurement and other comparative information will expand dramatically. Information technology will permeate every aspect of health care delivery" (p. 200). Clearly, the authors are seeking a broader range of measures to assess the effectiveness of healthcare delivery systems. In that same chapter, physicians are given their list of 11 implications, including changing their focus from narrow specialty practice to one oriented toward patient medical conditions. Most of these implications hold physicians responsible and accountable for results. The authors are equally hard on health plans. They challenge health plans to move from a culture of denial to a role that facilitates a truly value-based competition. Consumers are challenged to move from being passive to active healthcare consumers. They can accomplish this through better information and freedom from restrictions imposed by healthcare plans. The government's principal role would be to support all actors by providing reliable, valid, measured results, with a focus on patient value.
Obviously, the authors provide much greater detail in their analysis and the implications for the major actors. Unfortunately from this nurse's perspective, nursing is not identified as a major participant or even an actor in this new world of healthcare. Indeed you cannot find "nurse" or "nursing" in the index or chapter headings. Why then, should nurse executives read this book?
Nurse executives need to read this study because the other players at the healthcare table will be discussing it. These are influential authors who are putting out what will doubtlessly be controversial ideas on competition, because they too are consumers and they believe that a value-based system is superior to a purely cost-based system. Moreover, many of the good ideas they cite in healthcare have their roots in nursing: patient-focused care, care across the continuum, focus on quality as well as cost, evidence-based practice, etc. While our contributions may not have been acknowledged, whenever there is a major debate on healthcare, nursing is and needs to be there. "Value-based competition on results" may not be a primary focus of our practice, but understanding what it means and how it will affect the healthcare system is our business. This is a well-written book that is bound to raise the ire of many, which is all well and good if it also stimulates a better way of looking at healthcare systems. The authors' proposal may in fact be too sweeping to really happen. But it will generate dialogue. As a consumer, I would personally love to have the best information on providers and the opportunity to choose them on the basis of that information. We nurses have relied on each other for many years for referrals on which doctor to see and where to go for what procedure. Perhaps it is time to let the rest of the country in on what we already know.
The WSJ also reported a study by Medical School (published in the Dartmouth Atlas of Healthcare) that ranked selected medical centers on their intensity of care for terminal Medicare patients. Data showed that average spending on this group of patients ranged from $30,000 to nearly $100,000. The investigators concluded, "There is no evidence that higher amounts and greater intensity of care lead to better outcomes patients" (WSJ, May 16, 2006, p. D1). Effective this same day, the Atlas of Healthcare was made available to the public at http://www.dartmouthatlas.org. Is this not precisely what Michael Porter and Elizabeth Olmstead are talking about?
Elizabeth (Betty) Falter, MS, RN, CNAA,BC
President, Falter and Associates Inc, University of Arizona College of Nursing, Tucson, Ariz