It’s About Value, Stupid

The title of this post is a reminder to myself and not intended to offend the millions of other participants in healthcare to whom its application may or may not apply. I remind myself of this assertion quite often – primarily because I believe it provides the singular most important connection between the practice of healthcare and the business of healthcare. It also has the theoretical advantage of transcending many of the political realities of public policy because it reinforces commonly held beliefs regarding individual liberties, morality, as well as social consciousness.

That is why I am very excited about a new initiative I wanted to share with Pub visitors: last week, the New England Journal of Medicine announced a new collaborative publishing initiative with Harvard Business Review. Beginning on September 17th, new articles are being shared daily via the Insight Center for Leading Health Care Innovation.  Over an eight-week pilot period new articles will be posted daily, “from numerous experts across health care and business communities.” The content shared will be free during this pilot phase, so I strongly encourage you to at least take a few minutes to peruse the variety of information and insights offered there.

One of the most prominent initial contributors, Michael Porter, has written and spoken at length on Value in Healthcare. In fact, he and his coauthor, Elizabeth Olmsted Tiesberg, published Redefining Healthcare in 2006, in which they argued that historically health care systems have competed to shift costs, accumulate bargaining power and restrict services – rather than create value for patients. To address this shortfall Porter and Tiesberg have offered specific policy recommendations they believe can help reposition the potentially positive effects of market competition from between health plans, networks and hospitals to where it would be a lot more effective in producing value: i.e., at the level of diagnosis, treatment and prevention of high cost illness and conditions.

I should also note (and recommend) Porter’s latest article featured in the October issue of HBR and coauthored by Dr. Thomas Lee (CMO at Press Ganey), The Strategy That Will Fix Health Care. Porter and Lee rightly argue that healthcare providers are the only ones who can ultimately reframe the US healthcare delivery system into one that delivers high value. They discuss six interdependent components:

1. Organizing around patients’ medical condition
     rather than  physicians’ medical specialties
2. measuring costs and outcomes for each patient
3. developing bundled prices for the full care
4. integrating care across separate facilities
5. expanding geographic reach and
6. building an enabling IT platform

I think they purposely left off #7, pushing the camel through the eye of a needle. Please don’t take my sarcasm for lack of interest and support, but I am of an age where I tend to be a realistic chap. Between the theory espoused on the pages of HBR and the practice that is often manifested in care providers’ growing frustration with the obstacles they face in caring for their patients lies the enormous ball of yarn, which has been healthcare public policy in the US for the past 50 years.

I do believe, however, the value paradigm offers great promise in building a healthcare system where lower cost and higher quality are not viewed as a diametric choice but rather complimentary results of market competition. But there are indeed miles to travel before any such paradigm shift can be realized.

Value is not a foreign concept to healthcare, so I want to be wary of conveying the sense that a silver bullet exists, just waiting to be found so that in a single shot our delivery system can be cured. But value – whether seen through the prism of a patient’s ability to assess a surgical procedure, an insurer’s ability to assess the quality of an outcome or a nurse’s ability to assess the fairness of his or her employment contract – is way too often obfuscated to the point where it cannot serve the purpose of driving competitive performance.

I am hopeful the contributors to the new Center will be mindful of this observation as they seek to promote the potential benefits of a value-driven healthcare system.


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