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Michael Porter on health care reform

by Merrill Goozner

Harvard Business School professor Michael Porter has stumped the country for five years touting competition as the solution to the nation’s health care woes. “Universal insurance is not enough to address the fundamental challenge facing our health care system,” he told the 4th annual Health Care Congress Sunday afternoon. “The fundamental problem at the end of the day is the value of the health care we deliver.”

And how would he reorganize health care to deliver better value? “Where we need to go is an integrated practice model,” he said. His model entails patient-focused practice groups that bring together all the professionals and delivery systems to treat an individual’s medical condition, not the discreet medical incidents that result from that condition. It’s not that physicians will no longer specialize; it’s that they will no longer practice in specialty silos divorced or only marginally connected to all the other people providing that particular patient’s short- and long-term care.

Competition enters this new system when information technology provides data about the relative performance of these integrated practices. Consumers and payers will be able to use outcomes and price data to not just hold down health care costs, but gravitate to the systems that deliver better outcomes.

It’s a compelling vision. It also tracks very closely with another long-time observer’s perspective on how the health care system has to change, one who has a very different political perspective from Porter. Dr. Arnold Relman, the former editor of the New England Journal of Medicine, has a new book coming out called “A Second Opinion,” where he, too, calls for the total reorganization of the practice of medicine around the integrated practice model in order to deliver patient-focused care to the chronically ill people who account for 75 percent of all health care expenditures.

However, where Porter would have various systems compete by making pricing and outcomes data available, Relman would simply have the state or non-profits employ all the specialists needed to deliver integrated care. He’s also a backer of a single-payer national insurance model where Porter still sees a major role for both insurance companies and for-profit physician practices in the system.

Though Porter admits that computerizing medical records are a tool, not a solution, he suggested at several points in his talk that this tool could resolve the fragmentation that seems, at least to my ears, to be implicit in not attempting to reorganize the actual way that physicians are employed in the U.S. And that view was echoed by the two commentators the Congress lined up to respond to Porter’s talk: Ron Williams, chief executive officer of Aetna Inc., and George C. Halvorson, chief executive officer of the Kaiser Foundation Health Plans and Hospitals, more commonly known as Kaiser Permanente.

“We need care connectivity and electronic databases,” said Halvorson. “Only 8 percent of the diabetics in this country get the right care. We have to move than to 80 percent. To get there, we have to create an architecture that requires people to be in registries.”

Thank goodness John Iglehart, the founder of Health Affairs and currently a national correspondent for the New England Journal of Medicine, asked the next obvious question. It’s a question that could just as easily be posed to Relman as to Porter: “What would force providers to restructure?”

Perhaps the organizers of the conference, which includes the Wall Street Journal, weren’t interested in generating heat to go along with the light shed by Porter. But I would have loved to hear how the president of the American Medical Association, for instance, might have responded to Porter’s (or for that matter, Relman’s) plans for reorganizing the practice of medicine. Moving physicians away from paying for fee for service to paying them for integrated treatment for conditions (the Porter model) or to salaries in integrated practices (the Relman model) represents a revolution in the practice of medicine, one that would entail significant income losses for thousands of doctors.

Yes, it’s happening in many places (Porter). Yes, younger physicians are more open to computerization and working within integrated practice models (Halvorson). Yes, employers are no longer looking to beat up on the insurance companies for failing to hold down costs, but want value for the money they spend on employees’ health care (Williams).

But until someone comes up with a concrete plan for encouraging physicians to move into integrated practices without generating overwhelming opposition, health care reform is going to stay a debate about insurance and not a debate about how to get better quality for the money we spend.


  Ed Orme wrote @ April 23rd, 2007 at 11:16 am

In recent experience with our HC system through a family member with significant HC needs I agree with MPorter toward integrated services. All of us, including physicians, have to realize the pot with finances HC globally is limited. The limit in the U.S. has not yet become as visible as in other countries for demographic and macroeconomic reasons. Societies and physicians can either create more integrated HC systems which are more productive to thereby serve more people with the same resources, or, continue to experience the cost escalation inherent in the current system due to the specialist island approach. The appeal to physicians is to appeal to their professional desire to help more people, to be more confident in their diagnoses, thereby also leading to reduced malpractice issues and expenditures, and, to provide new competitive services to their patients. The use of an integrated service approach will provide competitive advantage for medical practices employing this approach. The use of database technology to study relationships and to determine diagnoses and root causes will prove to be a powerful aid to the integrated physician team. The power to increase impact on global healthcare with such an integrated and systematic data managed approach should appeal to physicians. The ability to learn much faster about conditions and relationships to other bodily functions, parameters and conditions should be hugely popular, at least to newer physicians. This will spawn a new industry creating human health problem solutions and enable new medical approaches to problems.

  Michael Porter session video | WorldHealthCareBlog.org wrote @ April 23rd, 2007 at 11:54 am

[…] related notes and commentary see recent posts by Merrill Goozner and Matthew Holt.  Michael Porter [65:59m]: Play Now | Play in Popup | Download […]

  Wall Street Boom, Main Street Bust | The Moderate Voice wrote @ April 26th, 2007 at 7:15 am

[…] they are making do with less, sometimes a lot less. Home foreclosures and bankruptcies are soaring, health-care and education costs are going through the roof, and once sacrosanct pension plans are collapsing. […]

  Brenda Turner wrote @ September 27th, 2007 at 5:43 pm

Thank you for blogging about Health Care Reform! The growing number of uninsured, now at over 47 million, the high cost of insurance and the release of the 2008 presidential candidates health care plans have brought the topic of health care reform to national headlines and prime time news.

But what about the individual stories of American citizens facing a health care crises today? How do they navigate the broken health care system? At Outrageous Times.org we talk about the issues concerning individuals and small businesses. In addition to reporting on pending legislation and the record profits of pharmaceutical and insurance companies, we address the real life stories — emergency room care, mental health issues, drug abuse, obesity, preexisting conditions and children’s health. By letting our voices be heard-together we can find common sense solutions to reduce health care costs and increase access to quality health care for all.

Outrageous Times is our monthly grass roots newspaper, dedicated to health care reform now and is distributed to over 20.0000 readers in Mercer County, WV and Tazewell, VA. The web site www.OutrageousTimes.org is a both a local and national health care resource. We would like to invite you and your readers to submit your stories, experiences, observations and opinions to OutrageousTimes.org. Comments posted on OutrageousTimes.org are often reprinted in the Outrageous Times.

Thanks in advance for your contributing your knowledge to OutrageousTimes.org.

Brenda Turner
Outrageous Times

[…] Porter said improving quality is the best way to contain costs. For example, if patients quit taking their diabetes drugs because of co-pays, it ends up costing more in the long run. He has worked with the European countries that have already fixed the insurance problem, but they still have the delivery system problems. Here is an interesting article for further reading about Porter’s perspective. […]

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