Consumer-Driven Health Care: Implications for Providers, Players, and Policy-Makers

Rating:
Summary: Thought Provoking
Review: In "Consumer-Driven Health Care," Regina E. Herzlinger, a leading health care thought leader and a professor at the Harvard Business School, provides a thought-provoking look inside a new, powerful force slowly transforming America's dysfunctional health care industry. "Consumer-Driven Health Care" builds on her popular 1997 book "Market-Driven Health Care: Who Wins, Who Loses in the Transformation of America's Largest Service Industry."

In the first part of her new 900-page book, Dr. Herzlinger makes a convincing case about how and why health care is broken and why market-based solutions - which empower consumers - are best. She restates the case she made in "Market-Driven Health Care" for putting consumers directly in charge of their own decisions (picking insurance plans, making medical decisions).

Through transparency of information, a realignment of incentives, and new tools to support decision-making, the consumer-driven model gives individuals a clear stake in their own health care. While not unique to other parts of the US economy, the approach is a radical departure for the $1.7 trillion health care market. As Dr. Herzlinger makes clear in her energetic analysis, the absence of these proven market-based tools goes a long to explain why health care became our most inefficient, outdated, and error-prone industry.

The second part - 80 percent of the book - is a collection of 73 think pieces written by 92 other experts. With short introductions by Dr. Herzlinger, these articles serve as a useful initial knowledge base for a growing field with an uncertain future.

"Consumer-Driven Health Care" has its limitations. For example, Dr. Herzlinger's case for the consumer-driven model fails to address the Medicare and Medicaid systems. It also leaves a variety of practical transition and execution issues unaddressed, although these are beyond the purpose of this volume. Because articles were written several years ago as part of a conference and most of the writers lack purchaser-side experience, the book also does not deal with the growing list of market-based reforms underway by large employers and innovative health plans.

In addition, since the field is still in its infancy, Dr. Herzlinger is a business researcher, and the contributors are largely wide-eyed entrepreneurs, the book will likely frustrate health policy wonks and others stuck in the technical minutia and ideological fights that characterize most health care discussions. But then, that's just as well. Too often analysts forget that health care is a business and operates as a market, albeit a flawed one insulated from tools proven to drive quality and efficiency. And we need all the wide-eyed, out-of-the-box thinking we can get.

Dr. Herzlinger also has her detractors. It reminds me of the old joke that there are two kinds of people in the world - people who like Wayne Newton and people who don't. Well, it seems that health care wonkdom is divided by those who like Reggie Herzlinger's ideas and those who don't. However, given the massive problems in American health care, her plain-spoken, business-savvy contributions remain as useful as they are provocative.

For a good primer on consumer-driven health care, I recommend "Let's Put Consumers in Charge of Health Care," a concise article by Dr. Herzlinger in Harvard Business Review (July 2002 issue). Available here on Amazon.com ($7, PDF).

Rating:
Summary: Thoughtful Contribution
Review: In Consumer-Driven Health Care, Regina E. Herzlinger, a leading health care thought leader and a professor at the Harvard Business School, provides a thought-provoking look inside a new, powerful force slowly transforming America's dysfunctional health care industry. Consumer-Driven Health Care builds on her popular 1997 book Market-Driven Health Care: Who Wins, Who Loses in the Transformation of America's Largest Service Industry.

In the first part of her new 900-page book, Dr. Herzlinger makes a convincing case about how and why health care is broken and why market-based solutions - which empower consumers - are best. She restates the case she made in Market-Driven Health Care for putting consumers directly in charge of their own decisions (picking insurance plans, making medical decisions).

Through transparency of information, a realignment of incentives, and new tools to support decision-making by patients, the consumer-driven model gives individuals a clear stake in their own health care. While not unique to other parts of the US economy, the approach is a radical departure for the $1.7 trillion health care market. As Dr. Herzlinger makes clear in her energetic analysis, the absence of these proven market-based tools goes a long to explain why health care became our most inefficient, outdated, and error-prone industry.

The second part - about 80 percent of the book - is a collection of 73 think pieces written by 92 other experts. With short introductions by Dr. Herzlinger, these articles serve as a useful initial knowledge base for a growing field with an uncertain future.

The book has its limitations. For example, Dr. Herzlinger's case for the consumer-driven model fails to address the Medicare and Medicaid systems. It also leaves a variety of practical transition and execution issues unaddressed, although these are beyond the purpose of this volume. Because articles were written several years ago as part of a conference and most of the writers lack purchaser-side experience, the book also does not deal with the growing list of market-based reforms underway by large employers and innovative health plans.

In addition, since the field is still in its infancy, Dr. Herzlinger is a business researcher, and the contributors are largely wide-eyed entrepreneurs, the book will likely frustrate health policy wonks and others stuck in the technical minutia and ideological fights that characterize most health care discussions. But then, that's just as well. Too often analysts forget that health care is a business and operates as a market, albeit a flawed one insulated from tools proven to drive quality and efficiency. And we need all the wide-eyed, out-of-the-box thinking we can get.

Dr. Herzlinger also has her detractors. It reminds me of the old joke that there are two kinds of people in the world: people who like Wayne Newton and people who don't. Well, it seems that health care wonkdom is divided by those who like Reggie Herzlinger's ideas and those who don't. However, given the massive problems in American health care, her plain-spoken, business-savvy contributions remain as useful as they are provocative.

For a good primer on consumer-driven health care, I recommend you start with Let's Put Consumers in Charge of Health Care, a concise article by Dr. Herzlinger in Harvard Business Review (July 2002 issue). Available here on Amazon ($7, PDF).


Rating:
Summary: Huge but a litle simplistic
Review: Sub-Title: Implications for Providers, Players, and Policy-Makers --,Citizen participation, Consumer satisfaction, Evaluation, Health & Fitness, Health Care Administration, Health Care Delivery, Health Care Issues, Health Policy, Health planning, Health/Fitness, Medical / Nursing, Patient Compliance, Patient satisfaction, Health systems & services, Medical / Administration, Personal & public health, Medical ==If your interests or profession lies in any area of health care this is a book that you almost have to have. In its almost 1,000 pages nearly every aspect of health care coverage is discussed. The format of the book includes some 200 pages written by Professor Herslinger followed by some 72 articles written by some 93 participants in a conference she held. As you would expect, the quality of the papers vary greatly. ==There are also a few reasons to disagree with some of Professor Herslingers basic thesis. She seems to believe that health insurers would compete in a fair market place to provide care to anyone. This is simply not true. If an insurance company can pre-select to eliminate giving any coverage at all to the sicker or more risky patients, it is to their benefit. An AIDS patient, with a requirement for expensive drugs can be folded into the coverage written for a large group, but an individual policy would have to be very expensive, or simply not written at all. The coverage of such patients is covered with what I think are unrealistic assumptions. ==The book presents a series of views that are just a bit simplistic, but which are forming a part of the national debate on health care. The information is needed if only to be aware of the discussion.