Printer Friendly

Coming soon: comparison shopping on product, price and performance.

You can look for the outlines of the future of health care in three Ps: product, price, and performance.


The federal government, states, payers, and business partnerships in many areas have increasingly been forcing some kinds of transparency on health care providers, demanding that they post process quality numbers, patient satisfaction results, adverse events reports, and even prices for procedures.

Some groups in health care have been resisting this movement, trying to control the flow of information. Maryland hospitals, for instance, report every adverse event--but they report it to an agency created by the hospital association which uses the information for education and quality improvement, but keeps it secret from all other parties.

Such efforts play the role of King Canute, trying to order back the tide. Other groups in health care are facilitating the change, hoping for a "first mover" advantage in shaping the way information is collected and reported.

Not only will the demand for such information rapidly become universal, the nature of the demand will change from processes to outcomes, and from averages to actuals. We'll see changes from "percentage of surgical patients receiving perioperative antibiotics" to "percentage of surgical patients with postoperative infections," from "our average charge for an uncomplicated cholecystectomy over the last six months" to "our price for an uncomplicated cholecystectomy."

There is a vast difference between these, and in that difference is the tale of the coming years: product, price, and performance.

Car and knee repairs

An iPod is a product: seemingly seamless, self-contained. Designed to do a specific thing, it has everything it needs to accomplish its mission.

Products are usually considered as separate from services, but services can have product-like aspects.

Imagine that I have a bent fender. I take it to the auto-body shop. They look it over, put it up on the rack and look at the frame and the wheel mount, then they say, "You have a $700 problem." Or a $2,000 problem.

They put that figure in an estimate, and the estimate is binding. If they guessed wrong, that is their problem, not mine. But usually they are right, because they have fixed a lot of fenders.

When I go to pick up the car, I don't have to find someone else to bolt the fender back on, or to paint it, or to put the light back in. They did the whole job, start to finish, and the car's body is as good as new. If it's not, or if a problem with their work shows up later, they'll fix it at no extra charge.

It happens that I don't have a bent fender. But I do have a bum knee. It doesn't bend more than 90 degrees or straighten less than 10 degrees, and it is in pain almost all the time.

When I look at health care, I see a vast array of specialists, devices, drugs, machines, and techniques which might help my knee or might not, at prices that are unavailable until afterwards, with results that are unpredictable, from individuals and groups whose past performance is unknown.

I don't find anything like a "knee product," a "knee shop" that would offer me diagnosis, treatment, rehab, and disease state management all in one package, at one price.

But I will.

Transparency is driving health care to it. Today, if I take my knee to my doctor, she might recommend an orthopedic surgeon, saying, "He's good." Meaning: He has a good reputation. But the reality is not only do I have no way of knowing how "good" he is or what "good" means in this case, my doctor has no way of knowing.

And to tell the truth, the surgeon has no way of knowing, because we have no standardized way of measuring "good" in knee surgeries. In those parts of health care in which we do have deep measurement (such as cystic fibrosis, or pediatric oncology), the results are either kept secret, or they are not broken out in a way that would help me choose a provider.

Imagine that in the future, my doctor suggests knee surgery. We look on the Web together for "knee teams" close by or not, to compare their costs, and their results--average increased range of motion, percentage of cases that needed re-work, reported decrease in pain, whatever are the appropriate measures.


Ask yourself this: Would my doctor ever recommend a surgical team with lower than average results? Wouldn't my doctor be afraid of being sued for malpractice for making such a recommendation?

Once true results are available, and real prices are offered, competition on actual cost and results will change something that would be nice to something that is extremely compelling. Everyone will be scrambling to stay out of the bottom.

Product marketing

Redefining Health Care: Creating Value-Based Competition on Results, by Michael Porter and Elizabeth Olmstead-Teisberg, paints the clearest vision of the new world that transparency will create. You should read this book only if you either:

1. Run some part of health care

2. Own and operate a human body

Otherwise, don't bother.

Porter and Olmstead-Teisberg offer a vision in which health care is organized mainly around products tailored to particular medical conditions. These products are delivered by medically integrated practice units made up of teams that work together on the same medical condition over long periods of time, continually learning from their experience with the condition and from each other.

These teams are comprehensive and seamless. A diabetes management team might include an endocrinologist, a behavioral therapist, a nurse educator, a dietician, an exercise physiologist, a podiatrist, a dentist, and even a computer technician to help patients set up their home health monitoring devices.

These products are clearly delineated, with real prices and a single bill and the teams compete directly against other teams that work on the same medical condition, on the basis of value: measurable results at a published price.

The most compelling part of this "health care delivery value chain" model is that it is possible. It can arise from current realities, piecemeal, in a self-reinforcing fashion. In fact, it already is.

New structures for public reporting of medical results are popping up on federal, state and regional levels. Weak, voluntary, and secret reporting systems are being superseded by mandatory public systems tied to reimbursement, such as the Health and Human Services' "Hospital Compare" initiative (

In many of these initiatives, process measures such as use of thrombolytics in heart attack patients are starting to give way to results measures such as risk-adjusted mortality rates for patients undergoing bypass grafts.

In a number of regions, new tiered payment systems use co-payments and other means to encourage patients to use the providers with the best cost and quality scores. Such systems also reward more efficient systems, those that beat their risk-adjusted cost targets, with higher reimbursements, and punish less-efficient providers with lower reimbursements.

New insurance companies, like HealthMarkets, of North Richland Hills, Texas, provide customers with cost and quality scores--by procedure, by physician, and by facility--for all providers in their area, while other companies, such as Boston-based Best Doctors, offer the information, independent of insurance products.

A number of major providers, such as Intermountain Health Care, the Cleveland Clinic, the Boston Spine Group, MD Anderson Cancer Center, the Texas Back Institute, the Texas Heart Institute, and Wisconsin's ThedaCare, to name a few, have moved increasingly to organizing their care into the kinds of medically integrated practice units that Porter and Olmstead-Teisberg describe.

Each of these pieces--transparency, integrated products, true measurement--is coming into play in the health care marketplace, and as they do, those who use them are being rewarded. The result is likely to be a complex of accelerating feedback loops that will leave health care looking quite different in as little as five to 10 years.

When health care providers compete at the level of the medical condition, on real prices and real results, the feedback loops will become extremely compelling. Offering the highest possible quality at the lowest possible price will no longer be voluntary.

Health plans, as well, will be forced to compete on the basis of real results and genuine customer service at the lowest price, rather than their current modus operandi--by denying coverage and shifting cost and risk to the providers.

None of this will be easy. For providers, it will mean major restructuring and new ways of thinking, along with serious and continual process curiosity. But it means that it is quite possible, without being a lunatic optimist, to imagine health care in 10 or 15 years actually costing significantly less than it does now, and offering significantly higher quality.

Joe Flower is a nationally known health care futurist and CEO of Imagine What If, Inc., which is building the new online world for health care executives, the Healthcare Futures Exchange. He can be reached at
COPYRIGHT 2007 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2007, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Next!
Author:Flower, Joe
Publication:Physician Executive
Date:Jan 1, 2007
Previous Article:Professional review committee improves the peer review process.
Next Article:The power of professionalism: should it be used as a political weapon?

Related Articles
Save time and money on the Net.
One of the multifamily industry's leading mystery shopping companies joins NSC.
Best international airport: Guarulhos, Sao Paulo.
Succession: revolving door.
Antique shops on the move.
Price check: more tools are needed to make consumer-driven health care work.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |