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Akron Univ. School of Law

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Thursday, February 2, 2006

Michael Porter and Health Care Reform: A Different Kind of Competitive Strategy

A few years ago I blogged on the health-reform ideas of Harvard's Michael Porter, which were prominently displayed in the June 1, 2004, issue of the Harvard Business Review.  Now he's been discovered by Alan Murrary of the Wall Street Journal, whose column unfortunately can be accessed only by paid subscribers.  Fear not, however: the Kaiser Family Foundation's Daily Health Policy Report has provided a nifty summary:

"The health care system seems ripe, not for a grand fix, but for a governmental push in the right direction," but President Bush should examine the work of Harvard Business School professor Michael Porter before he submits his proposals to Congress, Wall Street Journal columnist Alan Murray writes in an opinion piece. Porter last week at the World Economic Forum in Davos, Switzerland, previewed "Redefining Health Care" -- a book scheduled for release in May that he co-wrote with University of Virginia professor Elizabeth Olmsted Teisberg -- Murray writes, adding, "Too bad President Bush and his advisers weren't there." According to Murray, Porter, like Bush, "believes competition can solve much of what ails the health care industry," but Porter believes that "the president is making a big mistake by focusing mostly on cost." Porter believes that the "real problem in health care ... is a lack of good information on quality and outcomes" and that, "without that information, any effort to drive down costs through competition will backfire," Murray writes. In addition, Murray says, Porter believes that the "focus ... should be on value" because the "scandal of today's health care is that the quality is often shoddy." Porter also believes that, although "much of the effort to drive up value needs to happen in the private sector," the "government should take the lead in measuring health care quality and outcomes," according to Murray. He concludes, "If competition is going to rescue the U.S. health care system, it will have to be competition on price and quality" (Murray, Wall Street Journal, 2/1).

Porter's ideas, as Murray presents them, may seem simplistic, but he's nobody's fool (among other things he's one of about 15 University Professors at Harvard University) and his reform theories do not underestimate the enormity of the change that would be required to foster the kind of competition he's talking about.  The book he co-authored with Elizabeth Olmstead Teisberg is due out in May (about a year later than originally planned). It should be well worth waiting for.  [tm]

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