Competitive Value and Healthcare

The purpose of this blog, unlike others, is not to rant . Instead, this should be a place to promote dialog.

In the dialog we should educate, ask questions, promote research and hopefully come up with answers.

As our government representatives fight, call names and as our President decides to alter the personal mandate

let us look at important aspects of our future health care system. What should we be promoting for a successful system.

An interesting book to read was co-authored by a professor from the Harvard School of Business, Michael E Porter-Redefining Health Care, Creating Value-Based Competition on Results.

He and his co-author outline great suggestions for a successful system. As a professor of the Johns Hopkins Carey

School of Business I am on the same mind-set and Porter in that we should look at ways to improve the delivery of

health care to the total population. He discusses competitive advantage in almost every article and book that he “pens”,

and applies that principle to health care. A good idea?

Sure, especially as we want to improve the way we should want to deliver heath care. But it should be competitive value

instead a volume based delivery system. physicians and the health care delivery systems get paid for each encounter with

the patient- hospital or office, etc. However, the fallacy of a system like this is that the poor performers get paid for their

“mistakes”, a term which I use broadly. If a patient is seen multiple times in the office or admitted multiple times to the hospital

for the same diagnosis, they still get paid for each office visit or hospital stay or emergency room visit. Medicare as well as Medicaid has started instituted the penalty program by “holding payment” for readmissions for post discharge readmissions. This then trickles down to some of the physicians and potentially a larger portion of the physicians as more and more of physicians are being employed by the hospitals or health care systems with more and more hospitals being merged into bigger and bigger “systems.” So then the physicians will also get penalized- the will not get paid or they will will have monies taken out of their salaries.

Back to competitive values- if we push for a value based system. paying for good performance, we all win. We develop clinical protocols, performance based benchmarks to which we hold our performers to higher standards and therefore decrease errors, decrease readmissions, and in the long run have a more efficient system which actually saves the system money. Most important is that applying the basics of “business strategy” we create a system that delivers better care and promotes preventative health care. for the population at large.

Are these ideas incorrect?

We will discuss these ideas in more detail in the weeks to follow.

Add your ideas, disagree or agree.

Have a great week.


1 thought on “Competitive Value and Healthcare

  1. Dawn Miller

    Hi Roger, i like your idea and look forward to future discussion. When time allows I will respond with more comments!


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