Inaugurating Healthcare Reform: Coherent Managed Care in 2010 (Part I-d)

February 3, 2009

"THE health care system in America.... costs too much and saps economic vitality, achieves far too little return on investment and isn’t distributed equitably."

"THE health care system in America.... costs too much and saps economic vitality, achieves far too little return on investment and isn’t distributed equitably."

How did we get ourselves into such a mess?

By not measuring outcomes; by making accountability someone else's problem; by employing an antiquated business model that paid by the piece for illness care, and too little for health maintenance or disease avoidance, counseling, or social services. Of course, capitating primary care physicians also failed, but for the opposite reasons—putting physicians at risk by capitating them discourages visits and produces a lot of cost-shifting (otherwise known as "dumping" patients onto the specialist's lap).

Clayton M. Christensen (Harvard Business School) in “The Innovator’s Prescription” argues for "'disruptive innovation'—an unexpected new offering that through price or quality improvements turns a market on its head"—can be used to reinvent health care.

Example:

The Princeton University economist Uwe Reinhardt suggests the following 'disruptive innovating' by "creating a continuum of care that follows patients wherever they go within an integrated system." By doing this, he says "care providers can stay on top of what preventive measures and therapies are most effective. Tests aren’t needlessly duplicated, different doctors don't prescribe competing medications, and everyone knows what therapies a patient has received. As a result, integrated systems like Kaiser’s provide 22 percent greater cost efficiency than competing systems, according to a 2007 study by Hewitt Associates."

"Disruptive Innovation, Applied to Health Care." NY Times by Janet Rae-Dupree Pub. Jan 31, 2009 [Subscription required; last accessed the same date as it was published]