A. Aligning competition with value

To compete on the basis of value, organizations must take a balanced approach, both to reducing costs and to improving quality outcomes.

As a body, conference participants concluded that healthcare does not suffer from a lack of innovative skill or expertise. The question, rather, is whether that energy and expertise are being directed to solve the right problems. The prevailing view, also observed in the survey, was that the pursuit of misguided objectives reflects a broader lack of value-based competition in healthcare.

Donald M. Berwick, MD, President Emeritus and Senior Fellow, Institute for Healthcare Improvement, asked his audience to reconsider their basic assumptions regarding healthcare delivery. As a metaphor, Berwick offered the Choluteca River Bridge in Honduras. While its construction was of sufficient strength to endure Hurricane Mitchell in 1998, its design proved irrelevant: Over time, the river shifted away from the structure, leaving it a literal bridge to nowhere. Likewise, Berwick suggested, we are currently invested in maintaining a legacy system of healthcare delivery and financing that no longer “bridges” our needs. Drawing on examples in Alaska, New Mexico, and Sweden, Berwick advocated for innovations that changed the process of distributing care, rather than on making further investments that concentrated expertise in expensive, centralized locations.

Michael E. Porter, Bishop William Lawrence University Professor, Harvard University, placed the challenge within a broader context, observing that, “Competition as it has been historically structured in most healthcare systems around the world has not really been aligned with value. What it takes to be successful for a provider is not tightly connected to what it takes to be successful for the patient.” To align provider and patient interests, Porter proposed a multipoint agenda encouraging providers to create integrated practice units organized around the needs of patients rather than specialized providers, and measure outcomes “over the cycle of care,” applying the lessons learned at specific sites to larger geographic regions.

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