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Redefining Health Care: Creating Value-Based Competition on Results
The U.S. health care system is in crisis. At stake are the quality of care for millions of Americans and the financial well-being of individuals and employers squeezed by skyrocketing premiums—not to mention the stability of state and federal government budgets.
In Redefining Health Care, internationally renowned strategy expert Michael Porter and innovation expert Elizabeth Teisberg reveal the underlying—and largely overlooked—causes of the problem, and provide a powerful prescription for change.
The authors argue that competition currently takes place at the wrong level—among health plans, networks, and hospitals—rather than where it matters most, in the diagnosis, treatment, and prevention of specific health conditions. Participants in the system accumulate bargaining power and shift costs in a zero-sum competition, rather than creating value for patients. Based on an exhaustive study of the U.S. health care system, Redefining Health Care lays out a breakthrough framework for redefining the way competition in health care delivery takes place—and unleashing stunning improvements in quality and efficiency.
With specific recommendations for hospitals, doctors, health plans, employers, and policy makers, this book shows how to move health care toward positive-sum competition that delivers lasting benefits for all.
In Redefining Health Care, internationally renowned strategy expert Michael Porter and innovation expert Elizabeth Teisberg reveal the underlying—and largely overlooked—causes of the problem, and provide a powerful prescription for change.
The authors argue that competition currently takes place at the wrong level—among health plans, networks, and hospitals—rather than where it matters most, in the diagnosis, treatment, and prevention of specific health conditions. Participants in the system accumulate bargaining power and shift costs in a zero-sum competition, rather than creating value for patients. Based on an exhaustive study of the U.S. health care system, Redefining Health Care lays out a breakthrough framework for redefining the way competition in health care delivery takes place—and unleashing stunning improvements in quality and efficiency.
With specific recommendations for hospitals, doctors, health plans, employers, and policy makers, this book shows how to move health care toward positive-sum competition that delivers lasting benefits for all.
506 pages, Hardcover
First published April 24, 2006
133 people are currently reading
1284 people want to read
About the author
Michael E. Porter
128 books766 followersMichael E. Porter is the leading authority on competitive strategy, the competitiveness and economic development of nations, states, and regions, and the application of competitive principles to social problems such as health care, the environment, and corporate responsibility.
Professor Porter is generally recognized as the "Father of Strategy", as has been identified in a variety of rankings and surveys as the world’s most influential thinker on management and competitiveness. He has ranked #1 on "Thinkers 50".
He is the Bishop William Lawrence University Professor, based at Harvard Business School. A University full-professorship is the highest professional recognition that can be awarded to a Harvard faculty member.
In 2001, Harvard Business School and Harvard University jointly created the Institute for Strategy and Competitiveness, dedicated to furthering Porter’s work.
Professor Porter is the author of 17 books and over 125 articles. He is the founder of elite strategy consulting firm, the Monitor Group.
He received a B.S.E. with high honors in aerospace and mechanical engineering from Princeton University in 1969, where he was elected to Phi Beta Kappa and Tau Beta Pi. He received an M.B.A. with high distinction in 1971 from the Harvard Business School, where he was a George F. Baker Scholar, and a Ph.D. in Business Economics from Harvard University in 1973.
Professor Porter is generally recognized as the "Father of Strategy", as has been identified in a variety of rankings and surveys as the world’s most influential thinker on management and competitiveness. He has ranked #1 on "Thinkers 50".
He is the Bishop William Lawrence University Professor, based at Harvard Business School. A University full-professorship is the highest professional recognition that can be awarded to a Harvard faculty member.
In 2001, Harvard Business School and Harvard University jointly created the Institute for Strategy and Competitiveness, dedicated to furthering Porter’s work.
Professor Porter is the author of 17 books and over 125 articles. He is the founder of elite strategy consulting firm, the Monitor Group.
He received a B.S.E. with high honors in aerospace and mechanical engineering from Princeton University in 1969, where he was elected to Phi Beta Kappa and Tau Beta Pi. He received an M.B.A. with high distinction in 1971 from the Harvard Business School, where he was a George F. Baker Scholar, and a Ph.D. in Business Economics from Harvard University in 1973.
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Displaying 1 - 24 of 24 reviews
March 25, 2014
This book represents the effort of Michael Porter, the strategy guru at the HBS to apply his ideas on economics based strategy to health care. To do this, he has teamed up with a health economist, Elizabeth Teisberg, with whom he coauthored the papers that have been knit together to form the book. It is a good book, as these go, with some interesting insights for health care, some good references to the research literature for those who follow it, and some well worked frameworks that have been adapted to fit the particular industry conditions of health care. This book is useful as background to the overall health debate, although the details of national policy now include the details of the Affordable Care Act. The book is most valuable as a fairly systematic treatment of how ideas like scale, scope, experience, and organizational learning can be applied to the frightfully complex institutional and scientific context of health care. The situation faced by health care providers will benefit from strategic thinking and so Porter's book continues to have some value, especially when combined with some of the new hospital cases coming out the HBS.
If one wants the research results behind this work, it would probably be better to go to the original articles in the HBR or such journals as the Journal of Health Economics. The core intuition of the book, however, is the linkage of research to a view of health care that focuses on medical conditions across a cycle of care. This is akin to linking the various specializations in medicine around how partients deal with particular conditions in order to find out the value a patient obtains from interacting with the health care system around a given problem. This limits the various problems of cost shifting and perverse incentives that are present when management is focused around particular procedures or visits rather than the underlying condition necessitating the visits. Such a view highlight the integrative, almost craft, focus that is critical to judgments of care in conditions of high complexity. The need for such a perspective has been great for some time but is receiving even more importanct as chronic conditions become more important in the population and as genetic conditions and their effects become clearer.
What is clever about the book is the application of frameworks first developed for more traditional businesses to a professional service area like health care. The downside of a trade book like this, no matter how well done, is that it is written more as a series of lectures or articles, coupled with frameworks that have down more than their fair share of duty in powerpoint presentations. So what you lose in depth of treatment you make up for in packaging elegance. How this comes across will of course vary by the reader and what they wish to get from the book. At least with Porter, you know what you are getting and the frameworks are fairly well developed.
If one wants the research results behind this work, it would probably be better to go to the original articles in the HBR or such journals as the Journal of Health Economics. The core intuition of the book, however, is the linkage of research to a view of health care that focuses on medical conditions across a cycle of care. This is akin to linking the various specializations in medicine around how partients deal with particular conditions in order to find out the value a patient obtains from interacting with the health care system around a given problem. This limits the various problems of cost shifting and perverse incentives that are present when management is focused around particular procedures or visits rather than the underlying condition necessitating the visits. Such a view highlight the integrative, almost craft, focus that is critical to judgments of care in conditions of high complexity. The need for such a perspective has been great for some time but is receiving even more importanct as chronic conditions become more important in the population and as genetic conditions and their effects become clearer.
What is clever about the book is the application of frameworks first developed for more traditional businesses to a professional service area like health care. The downside of a trade book like this, no matter how well done, is that it is written more as a series of lectures or articles, coupled with frameworks that have down more than their fair share of duty in powerpoint presentations. So what you lose in depth of treatment you make up for in packaging elegance. How this comes across will of course vary by the reader and what they wish to get from the book. At least with Porter, you know what you are getting and the frameworks are fairly well developed.
July 2, 2021
Visuals for Defining and Redefining Health Care - “Redefining Health Care” focuses on medical and other related services can emphasize delivery of value, not just on containment of costs as the key to reforming this vital sector of our economy. The book looks at how the health field can utilize competition centered on the treatment of medical conditions over the full cycle of care as that means of delivering value.
In chapters 1, 2, 3 and 4, the authors lay out the heart of their message. In chapters 5, 6, 7 and 8, the authors explain the strategic and organizational implications of these ideas. More specifically each one of the latter, treats the ramifications for health care providers, health plans, as well as for suppliers (e.g. Biotech/Pharmaceutical companies and Medical Device makers), consumers, employers, and policy makers respectively.
For this reviewer, the added value of this book is In excess of 50 visual figures, charts and boxes that the authors use to “define” health care and then propose how they would redefine it. Not only in the body of the book, but also in appendices, they have provided helpful illustrations of the care delivery value chain.
As the authors indicated in 2006 when the book was published, the redefinition of which they speak was already beginning to occur. It seems that such activities have increased with the Affordable Care Act, but it would be helpful to have an updated edition that would speak to whether and where such increases have occurred (see Steven Brill's "America's Brittle Pill" which addresses many of the pro's and con's surrounding the Acts passage/implementation and seems to reaffirm the need for attention suggested in this book)
In any case, “Redefining Health Care” continues to be a useful reference in understanding this important industry and sector of human activity.
In chapters 1, 2, 3 and 4, the authors lay out the heart of their message. In chapters 5, 6, 7 and 8, the authors explain the strategic and organizational implications of these ideas. More specifically each one of the latter, treats the ramifications for health care providers, health plans, as well as for suppliers (e.g. Biotech/Pharmaceutical companies and Medical Device makers), consumers, employers, and policy makers respectively.
For this reviewer, the added value of this book is In excess of 50 visual figures, charts and boxes that the authors use to “define” health care and then propose how they would redefine it. Not only in the body of the book, but also in appendices, they have provided helpful illustrations of the care delivery value chain.
As the authors indicated in 2006 when the book was published, the redefinition of which they speak was already beginning to occur. It seems that such activities have increased with the Affordable Care Act, but it would be helpful to have an updated edition that would speak to whether and where such increases have occurred (see Steven Brill's "America's Brittle Pill" which addresses many of the pro's and con's surrounding the Acts passage/implementation and seems to reaffirm the need for attention suggested in this book)
In any case, “Redefining Health Care” continues to be a useful reference in understanding this important industry and sector of human activity.
March 28, 2007
This book was rich with hard statistics, and explained why competition has failed to deliver the vast improvements in value for health care that it has in other markets.
It went on to explain how the power of competition can be appropriately harnessed to unleash vast improvements in health care, and why better health care will indeed cost less.
This should be required reading for every public official, hospital administrator, health insurance executive, and doctor in the country - and its not a bad read for health care consumers and would-be-educated voters either!
It went on to explain how the power of competition can be appropriately harnessed to unleash vast improvements in health care, and why better health care will indeed cost less.
This should be required reading for every public official, hospital administrator, health insurance executive, and doctor in the country - and its not a bad read for health care consumers and would-be-educated voters either!
August 8, 2007
1. Watch Sicko. Every American should. No, I don't care if you thought he overstepped his moviemaker bounds in previous movies.
2. If you then are not convinced that social medicine could work in the US, read this book. You will then at least realize that we need massive change in the system.
3. Remember that this was published by Harvard types. It can be a bit dense at times. Order lots of Starbucks (and remember in doing so that you are supporting a company that at least provides benefits for its part-time workers in our heartless society).
2. If you then are not convinced that social medicine could work in the US, read this book. You will then at least realize that we need massive change in the system.
3. Remember that this was published by Harvard types. It can be a bit dense at times. Order lots of Starbucks (and remember in doing so that you are supporting a company that at least provides benefits for its part-time workers in our heartless society).
January 5, 2010
In general, this book is a cost-benefit analysis of the american healthcare system. The author has a lot of "real world" examples of healthcare costs, misuse, and quality improvement programs. However the author basically takes 1 premise and beats you over the head with it.
So I will sum up this book for you: The american healthcare system fails to function properly because it is not a free-market system ..... and here is 400 pages of why.
So I will sum up this book for you: The american healthcare system fails to function properly because it is not a free-market system ..... and here is 400 pages of why.
February 8, 2018
While it has good ideas it's heavy going. Very repetitive style and sometimes feels like he's trying to get word count up. But maybe that's just coz I tried to read this through in one go. Might work better as a dip in and out kind of book.
Still, 4 stars because it's a worthwhile message and I want to see it get talked about more.
Still, 4 stars because it's a worthwhile message and I want to see it get talked about more.
January 22, 2025
A practical, how to guide to Value Based Healthcare. A book I first read in graduate school nearly 20 years ago and reread now as my work explores this model of payment in a real sense. Educational and actionable, this is - in my opinion - a must read for anyone interested in how to best fix a broken healthcare system.
March 13, 2017
Porter's take on this industry does great job in explaining why traditional market forces don't always work in healthcare.
September 8, 2017
I ended up just skimming the book, as I got bogged down in all the (extreme) details. If you like a lot of details & numbers, you will appreciate the author's hard work.
March 23, 2018
Some useful examples but some content was outdated given more recent healthcare reforms.
June 1, 2018
Most insightful book I’ve ever read on healthcare!
July 25, 2008
Redefining Health Care: Creating Value-Based Competition on Results
Michael E. Porter and Elizabeth Olmsted Teisberg
Harvard Business School Press
In this volume, Porter and Teisberg examine health care issues in three broad areas: "The first is the cost of and access to health insurance. The second is standards for coverage, or the types of care that should be covered by insurance versus being the responsibility of the individual. The third is the structure of health care delivery itself." Porter and Teisberg explain why the only way to truly reform health care is to reform the nature of competition itself. More specifically, to transform health care by realigning competition with value for patients.” How to do so is the central focus of this book." How to explain dysfunctional competition in health care? Suggest several that include "misaligned incentives and a series if understandable but unfortunate strategic, organizational, and regulatory choices by each participant in the system that feed on and exacerbate each other. All actors in the system share responsibility for the problem....The problem is that competition does not take place at the medical condition level, nor over the full care cycle. Competition is the current system is at the same time too broad, too narrow, and too local."
While conducting their research, Porter and Teisberg concluded that there should be no presumption that good quality of health care is more costly. On the contrary, they learned that "better providers are usually more efficient. Good quality is less costly because of more accurate diagnoses, fewer treatment errors, lower complication rates, faster recovery, less invasive treatment, and the minimization of the need for treatment. More broadly, better health is less expensive than illness. Better providers can often earn higher margins at the same or lower prices...so quality improvement does not require ever-escalating costs." Porter and Teisberg have a convincing, indeed compelling argument in support of value-based competition on results in health care within a system which is "ripe for change"...and change for the better but not for the costlier if competition in health care is redefined and then conducted as Porter and Teisberg advocate. One of the most important benefits would be that the changes they propose would be self-reinforcing. "Changes by health plans and providers to compete on values will reinforce and magnify each other, and will spur innovation by suppliers. As consumers and employers adopt these principles, providers and health plans will be more motivated, and more able, to improve the value they deliver."
Michael E. Porter and Elizabeth Olmsted Teisberg
Harvard Business School Press
In this volume, Porter and Teisberg examine health care issues in three broad areas: "The first is the cost of and access to health insurance. The second is standards for coverage, or the types of care that should be covered by insurance versus being the responsibility of the individual. The third is the structure of health care delivery itself." Porter and Teisberg explain why the only way to truly reform health care is to reform the nature of competition itself. More specifically, to transform health care by realigning competition with value for patients.” How to do so is the central focus of this book." How to explain dysfunctional competition in health care? Suggest several that include "misaligned incentives and a series if understandable but unfortunate strategic, organizational, and regulatory choices by each participant in the system that feed on and exacerbate each other. All actors in the system share responsibility for the problem....The problem is that competition does not take place at the medical condition level, nor over the full care cycle. Competition is the current system is at the same time too broad, too narrow, and too local."
While conducting their research, Porter and Teisberg concluded that there should be no presumption that good quality of health care is more costly. On the contrary, they learned that "better providers are usually more efficient. Good quality is less costly because of more accurate diagnoses, fewer treatment errors, lower complication rates, faster recovery, less invasive treatment, and the minimization of the need for treatment. More broadly, better health is less expensive than illness. Better providers can often earn higher margins at the same or lower prices...so quality improvement does not require ever-escalating costs." Porter and Teisberg have a convincing, indeed compelling argument in support of value-based competition on results in health care within a system which is "ripe for change"...and change for the better but not for the costlier if competition in health care is redefined and then conducted as Porter and Teisberg advocate. One of the most important benefits would be that the changes they propose would be self-reinforcing. "Changes by health plans and providers to compete on values will reinforce and magnify each other, and will spur innovation by suppliers. As consumers and employers adopt these principles, providers and health plans will be more motivated, and more able, to improve the value they deliver."
May 15, 2013
I read this book for a college class, and although it was a bit of a bear to get through, I am glad I read it. Like many Americans, I am disenchanted with the modern health care system. It seems more like a disease management system to me. This book outlines strategies for everyone involved that could help turn this train around and put health back at the forefront of healthcare.
The main premise of the book is that health care needs to stop focusing on costs and instead focus on improving value and outcomes. If we put our energy into this direction, costs will take care of themselves. Porter & Teisberg describe how these changes have occurred in various ways already, and paint a hopeful picture of the future in which healthcare isn't all about the money and people have better health outcomes.
I doubt I would have read this if it hadn't been assigned in class, but I feel more hopeful about our future knowing that there are options that could reinvent the way we look at healthcare.
The main premise of the book is that health care needs to stop focusing on costs and instead focus on improving value and outcomes. If we put our energy into this direction, costs will take care of themselves. Porter & Teisberg describe how these changes have occurred in various ways already, and paint a hopeful picture of the future in which healthcare isn't all about the money and people have better health outcomes.
I doubt I would have read this if it hadn't been assigned in class, but I feel more hopeful about our future knowing that there are options that could reinvent the way we look at healthcare.
March 23, 2009
An interesting book.
The first sections are extremely good at illustrating the current health care system and its dysfunctions. This section is well worth reading for anyone interested in the US health care system.
Where the authors start describing how they would change the system is where I felt this book was lacking. It's not that their ideas aren't good (though I think the complexity of real medical problems would pose significant troubles in certain areas),but that they wish to restructure the system without offering ideas on how you could do so big a transition.
Also, if I remember correctly, there are some examples of systems similar to what they recommend (dialysis centers), and I don't think the competition there has worked out as this book would have you believe competition would work.
So worth it for the set up, and the middle sections are interesting, but implausible (I think), at least in the near to mid term.
The first sections are extremely good at illustrating the current health care system and its dysfunctions. This section is well worth reading for anyone interested in the US health care system.
Where the authors start describing how they would change the system is where I felt this book was lacking. It's not that their ideas aren't good (though I think the complexity of real medical problems would pose significant troubles in certain areas),but that they wish to restructure the system without offering ideas on how you could do so big a transition.
Also, if I remember correctly, there are some examples of systems similar to what they recommend (dialysis centers), and I don't think the competition there has worked out as this book would have you believe competition would work.
So worth it for the set up, and the middle sections are interesting, but implausible (I think), at least in the near to mid term.
June 25, 2008
A great review of the American health care system, how it was created and why it's simply not working anymore. The authors address the heart of the economic issues behind rising costs and decreasing quality, and lay out a strategy to improve the delivery, organization and financing of health care services, focusing on the quality of care and value to the customer as the driving factors. It is frustrating to see such practical and logical solutions meet such industry-wide opposition. But the many examples of institutions that have already adopted some of these strategies and seen success gives hope that maybe, just maybe, things can change for the better, and that the vast problem of lack of health insurance and low-quality care can finally be solved when the root causes are addressed head-on.
September 16, 2007
This book attempts a new view of modern healthcare. It is provocative in approach and theory. Doable? Maybe but unlikely that we'd dismantle the current system, rebuild it for optimal efficiency, and be satisfied with the transition. Yet, it is fine to fill the mind with the possibility of the concept.
May 28, 2010
Very strong text book on issues around healthcare and possible ways to create value-based competition. Several of the ideas are to be implemented in acts of the healthcare reform bill (yet to be defined in detail by the secretary).
Probably not recommended for most people who aren't looking to get in depth about this topic, as this is written in textbook style and length.
Probably not recommended for most people who aren't looking to get in depth about this topic, as this is written in textbook style and length.
November 13, 2011
a lot of redundancies in the text, Porter and co-writer could have sent the message across with much less effort. I guess every book having him as an author has to be of a certain volume. with this respect, Clayton Christensen book is not only deeper but also more insightful. I rate it as a 2 1/2 stars. by the way, i did not read the book to the last page.
March 5, 2007
call me dweeby, but this book outlines a very interesting strategy for health care policy and administration based on market-based competition
June 24, 2010
Interesting read. Some Good ideas.
May 24, 2012
NEW APPROACH TO IMPROVE HEALTHCARE SYSTEM....
September 20, 2022
This book is dated having been written before the ACA came into play but the primary insight is valid.
The book can tend to be repetitive but the need for competition in healthcare is spot on.
The book can tend to be repetitive but the need for competition in healthcare is spot on.
June 16, 2009
Detailed review of the problems, causes and possible solutions to Health Care
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May 2, 2010menarik, dari kata pengantar sudah banyak ide menarik. Sayang, banyak pilihan kata sulit....
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