Porter on Value in Health Care

Presentation to Center for Public Leadership, Harvard Kennedy School:

http://youtu.be/Z3fKyWydweo

What is the Goal?

Access? Availability? Equity? Cost containment?

VALUE = Outcomes -:- Costs

Outcomes

Multidimensional Over time…

Cost

Total cost of all services for full care cycle

Six Strategic Objectives

1. Organize system around patient2. Measure outcomes and costs 3. Pay in “bundles”4. More connection, less all-service

stand-alone5. Break down and out of narrow

geographies6. IT, but not for a broken system

Obj. 1: Organize around patient

Obj. 1: Organize around patient

Cycle of Care

Obj. 1: Implications

“From organizing around the exception to organizing around the rule”

Primary Care: organize around specific patient populations

Volume for specialization and dedicated facilities

Obj. 2: Measure… the whole chain

Obj. 2

Now: only measuring processes… Must measure outcomes

Obj. 2: Measure… Outcomes

Obj. 2: Measure… Costs

Obj. 3: Pay in bundles

Obj. 4: Connections

Obj. 6: IT

Implications for Government Establish universal measurement and

reporting Shift reimbursement systems bundled

Medicare to lead… Remove obstacles to integration

Stark Laws limiting referrals (“conflict of interest”)? Separate payments to hospitals and doctors? Illegal to hire a doctor as an employee?

Open competition Encourage patient responsibility Set standards and mandate EMR adoption