Posts Tagged ‘Michael Porter’

How to get to a value-based healthcare system

July 9, 2009  |  General  |  2 Comments

One of the chief dilemmas of healthcare reform is that, without some sort of intervention, increased access will raise costs enormously. That is what happened in Massachusetts, which chose to attack the problem of access first and costs second. When all those uninsured people finally got insurance, there was an explosion of pent-up demand. After all, as a nation we cannot afford what we’re spending now, even with millions of Americans without access to care. If we just provide the access through universal coverage without doing anything else, the cost will bankrupt us in short order.

Michael Porter, in a recent editorial in the New England Journal of Medicine, points out the obvious solution — finally, finally, we need to get good value for our health dollars. We certainly don’t get that now; as a nation we spend far more than any other Western nation for mediocre results. He reminds us that the goal is to take care of people: “Good outcomes that are achieved efficiently are the goal, not the false “savings” from cost shifting and restricted services. Indeed, the only way to truly contain costs in health care is to improve outcomes: in a value-based system, achieving and maintaining good health is inherently less costly than dealing with poor health.” We can save money, but this will come as a byproduct of doing the job right.

For America this truly can be win-win, although there will be losers. The losers will be physicians and hospitals that do too much of the wrong things, because they can and the present system rewards doing things. These potential losers have powerful friends. The insurance companies, I think, have finally realized that they cannot keep passing increased costs on to their subscribers. No business can survive if they make their product unaffordable, and healthcare premiums have reached that point.