Redefining Health Care: Creating Value-Based Competition on Results

Elizabeth Teisberg | Stern Speakers


By Michael E. Porter and
Elizabeth Olmsted Teisberg.

506 pp. Boston,
Harvard Business School Press, 2006.
$35. ISBN: 978–1–59139–778–6



Virtually all of us are frustrated by the high costs and underperformance of the U.S. health care system. 

  • We spend about twice as much per capita on health care as our European counterparts, yet
  • our results on key metrics such as infant mortality rates and life expectancy are only about average.

Solutions offered to get us out of the difficulty — which incorporate a focus on increased consumer cost sharing — seem ill equipped to address the magnitude of the problems.

It is in this context that Michael Porter and Elizabeth Olmsted Teisberg present their compelling critique of our health care system.

Of more interest is their proposal for restructuring the system to focus on what matters the most — maximizing the health outcomes per dollar spent.

The book starts with a lengthy critique of all that is wrong with our system.

Central to the authors’ thesis — which is one that I agree with — is the assertion that competition in health care takes place along the wrong dimensions. 

Today, competition is structured to shift costs, to leverage purchasing power, and to restrict choice and services — none of which are designed to increase the value of the health care that we purchase.

The magnitude of the changes envisioned by the authors’ proposal would be enormous.

  • The delivery of health care would be organized by medical condition 
  • into interdisciplinary care teams
  • designed to provide the outcome 
  • with the best value across the full span of health care services. 

If we were to move in this direction, the ways in which Medicare, Medicaid, and the private sector pay for health care services would have to change as well.

These changes would

  • base payment on episodes of care and 
  • eventually establish payment across the full cycle of care — prevention, diagnosis, and treatment.

This patient-centered approach to pricing would replace our current, institutionally focused payment systems, which promote fragmentation in the delivery of care.

Porter and Teisberg believe that

  • the health care system needs to be restructured around “health condition management units”
  • focused on providing high-quality care for, say, a patient with hypertension and diabetes or a patient with cancer (one model they recommend is the Cleveland Clinic in Ohio).


What will be controversial is the authors’ contention that integrated health plans (i.e., health maintenance organizations such as Kaiser Permanente) have no role in this future. 

Indeed, the authors call for a clear separation of the insurance and delivery functions, which are combined in integrated health plans.

Clearly, some readers will contest this idea, arguing that the best vehicles for achieving the blueprint outlined in the book are those same large, integrated plans, whether Kaiser Permanente or the Department of Veterans Affairs, where services can be easily organized according to medical condition.

Notwithstanding the debate over implementation that this book will inspire, it is an interesting and important treatise of what is wrong with our system and what we should do about it.

Although it is somewhat lengthy and repetitive, Redefining Health Care will intrigue those who seek new thinking on health care.

Kenneth E. Thorpe, Ph.D.
Emory University, Atlanta, GA 30322

Citing Article

Ian Bullock. (2015) Editorial comment: How true outcomes-based commissioning can really ‘liberate’ healthcare services. Future Hospital Journal 2:2, 150–150.


Originally published at

Deixe um comentário

O seu endereço de e-mail não será publicado. Campos obrigatórios são marcados com *

Related Posts