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Michael E. Porter on health care reform « Previous | |Next »
August 23, 2007

I've been digging around the internet looking for pathways --information flows--- that would take me outside the current horizons of the Australian media, magazines and bloggers. I'm finding it a bit insular, the quality of the contents of the op-ed columns in the mainstream media is dropping, the online subscription based media are not breaking new ground and there is not much interaction between political bloggers and journalists.

I've come across something that is connected to my interest in health care--- an independent group-blog on health care called World Health Care Blog. Independent here means that there a number of health bloggers run their own blogs but contribute to a group health blog set up under the Corante umbrella.

It is US in orientation, and all the bloggers reside in the US, which undercuts the blogs claims about being a world blog.There is a link to a 4th Annual World Health Care Congress, which once again is about the USA. The session on competition in health care led by Michael E. Porter, at The Institute for Strategy and Competitiveness is interesting. On the video Porter highlights the need to restructure the delivery of health care to increase value.

This is more than cost containment (a dead end) and reducing administrative costs, as the vast majority of cost are in the actual delivery of care. The restructuring needs to be major on not an incremental one.

This is because the management and organization is a 19th century one whilst the medical technology is 21st century. The best approach to getting improved value is to move the organization from medical specialties to medical conditions, a cycle of care and integrated practice units.

Yet competition has not delivered on improving value in health care delivery. Why so? Porter argues that what we have is bad competition in health care, as it is concerned with zero sum competition (cost shifting, capturing more revenue and restricting services etc) and not with the health outcomes for consumers. The fundamental flaw in the health care sector is not competition, but the wrong kind of competition. Healthy competition is competition to improve value for customers.

Porter's talk is based on his book Redefining Health Care This text clearly recognizes that the U.S. health care system is on a dangerous path, with a toxic combination of high costs, uneven quality, frequent errors, and limited access to care. The many disparate kinds of evidence, taken together, lead to the same overwhelming conclusion: the system is broken, and the magnitude of the problem is staggering.

it is is similar situation in Australia. The health "system" is on collision course with demographic and economic reality. Reform efforts have failed because the diagnosis of the problem was wrong and the attempts to treat the system have addressed the wrong issues or offered piecemeal, ultimately ineffective solutions aimed at symptoms rather than causes.

| Posted by Gary Sauer-Thompson at 1:58 PM | | Comments (3)


Rudd has already talked about preventative health measures.

On the Mersey takeover he said case by case intervention is silly, you need a coordinated, state-wide approach.

Now he's offered to make public hospitals a federal responsibility. And so far the states are happy about it.

I gather the states would still be responsible for the supporting services and infrastructure.

Starting to sound like a good package?

judging by Rudd's comments and Nicola Roxon's set health speeches, yes they have take the preventative health care step and they embraced the need for the co-ordination of the different health programs. But they hestiate at that point and are filled with anxiety. They see the abyss and recoil.

There is a long way to go, if you listen to Michael E. Porter's talk on video This is the best I've heard on what structural health care reform involves, if we are to deliver better health outcomes to consumers.

Porter may be a free market economist in the American mould, but he has an excellent grasp of structural health care reform as a new way of deliverying health care. And he's sound on this.

The ALP is tinkering with incremental reform. That's the heritage of Julia Gillard. She was defending Medicare against the free market or the privatisation of health, rather than thinking in terms of structural reform.

You are right. The Rudd/Roxon proposal is to work with the states to help them lift their game. It is not seizing control of the public hospitals as some commentators are saying. That will only happen if the states don't improve their performance and meet the benchmarks they have signed up to by mid-2009.