Alan Maynard on Porter and Teisberg's reinvention of the wheel
HEALTH REFORM: Reinventing The Wheel
by Alan Maynard
Health Affairs Blog
October 12th, 2006
The American health care systems perform impressively, producing what they are designed to deliver: cost inflation, inefficiency, and inequity. At regular intervals, local pundits declare that the outcomes of the incentive structures in the constituent parts of the systems are unacceptable, usually emphasising that “the nation cannot afford to spend 16 percent of GDP on health care.” Such “insights” ignore the fact that inflation is a consequence of the systems’ perverse incentives and that improved control of expenditure inflation would oblige physicians, nurses, hospitals, and the pharmaceutical industry to moderate their lifestyles.
Michael Porter, a management guru at Harvard, along with colleague Elizabeth Olmstead Teisberg, has now decided to switch his attention to the health care industry, no doubt in part because he has recognised that it is big and remunerative. The extent to which the lessons of Enron and the “successes” of other capitalist enterprises can inform health care policy can and should be debated carefully.
Any cure for the malaise of U.S. health care, or the British NHS to which Porter has also offered his vision of a New Jerusalem, is dependent on diagnostic skills and the evidence base for the treatments offered. Like many gurus before him, Porter makes an adequate job of the diagnostics, offering insights very reminiscent of the Jackson Hole proposals over a decade ago.
However when he gets to cures, there is nothing new to break the logjam of inertia and self-interest that stabilizes the inefficiency of the health care system, be it public or private. He rightly indicates that the industry needs a measure of value added and that instead of focusing on cost and activity, it is necessary to measure patient-reported outcomes - i.e., measures of whether patients feel better. Such a conclusion is welcome but ignores the forces that have prevented the use of outcome measures in health care for centuries. Another Bostonian, Ernest Codman, suggested systematic management for Massachusetts General Hospital - in particular, plans for evaluating the competence of surgeons in the early twentieth century - and, as a consequence of the unpopularity of his proposals, he lost his staff privileges in 1914.
Insurers and Governments Fixated on Failure
The RAND Insurance Experiment produced a generic health profile, Short Form 36. Work in Europe has produced a generic health index, EQ5D. These have been translated into dozens of languages and used in thousands of clinical trials. But with physicians and policy makers fixated with the measurement and management of failure (e.g. mortality), these measures of success have been ignored by insurers and governments alike as a means of measuring success and of bringing to account those providers failing to make their customers “better,” in terms of physical and mental functioning.
Porter’s lack of specificity about the outcome measures needed to improve the performance of the U.S. health care systems, and his glib reliance on “competition” to institute change, flies in the face of international evidence: Nowhere has any public or private institution managed to curb the excesses of powerful providers more interested in their wallets than demonstrably improving patients’ health. Porter adds little new to the debate, but he is a welcome and potentially powerful addition to the chorus advocating change.
A. Maynard, HEALTH REFORM: Reinventing The Wheel, Health Affairs Blog, October 12th, 2006, http://healthaffairs.org/blog/2006/10/12/health-reform-reinventing-the-wheel/,
Copyright ©2006 Health Affairs by Project HOPE - The People-to-People Health Foundation, Inc.
Comment:
By Don McCanne, MD
Health Affairs has initiated a blog and has begun with comments on Michael Porter and Elizabeth Teisberg’s “Redefining Health Care.” Comments by James Robinson, Uwe Reinhardt, Alain Enthoven, and Alan Maynard have been posted, along with responses from readers.
Besides Alan Maynard’s comments above, I would also recommend reading Uwe Reinhardt’s take. An excerpt: “Unfortunately, (Porter and Teisberg’s) book offers few practical hints on how the U.S. health system would transit from its current, allegedly negative-sum game to the allegedly positive-sum utopia (Porter and Teisberg) envision. That transition would vastly rearrange the distribution of economic power and clinical autonomy in our health system. It is naive to assume that the potential losers in that transition would simply roll over and accept their fate.”
http://healthaffairs.org/blog/2006/10/10/health-reform-porter-and-teisbergs-utopian-vision/#more-63
Regular readers of the Quote of the Day will know that I am not a fan of Porter and Teisberg’s concepts. An excerpt from an earlier comment of mine: “Imagine a system in which care is delivered based on teams, without geographical limitations, organized around medical conditions, competing with other teams organized around the same conditions. Imagine your community hospital and its specialists providing care for a very limited list of medical conditions selected on the basis of providing better outcomes and lower prices. Your community hospital may very well lack a team that is dedicated to your particular problem, requiring you to travel to the next county, or maybe the next state, for care. Then allegedly to create transparency in pricing, you receive a single bill that totally obscures any understanding as to where your payment goes. You really have to read the book to understand the extent to which this line of reasoning is carried.” http://www.pnhp.org/news/2006/june/porter_and_teisberg.php
“The American health care systems perform impressively, producing what they are designed to deliver: cost inflation, inefficiency, and inequity.” This first line in Alan Maynard’s comment leads us to our bottom line. The United States needs a new design that would address cost inflation, inefficiency, and inequity. The first step would be to establish an equitable, efficient national health insurance program that could begin to tackle the rapidly rising costs of health care. That won’t be easy, but it’s impossible under the status quo.