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  • Value-Based Health Care
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The Health Care Crisis

In spite of countless health care reform efforts over many decades, uneven outcomes and quality, frequent errors, and high and rising costs continue to plague the U.S. and countries around the globe. The status quo is untenable, and everyone—providers, health plans, employers, governments, and most of all, patients—will suffer if we fail to fundamentally change our approach to health care delivery.

 
  • High & Rising Costs

    Figure #1
    Figure #1

    High & Rising Costs

    $10,209
    represents the per capita spending on health care in the US in 2017 - the highest of any nation in the world
    17.2%
    of the Gross Domestic Product (GDP) of the U.S. went to health care in 2017 - the highest share of GDP of any nation in the world
  • Outcomes Need to Improve

    Figure #2
    Figure #2

    Outcomes Need to Improve

    78.6yrs
    is the US life expectancy which is lower than many nations who spend far less on health care
    5.9deaths
    per 1000 births is the US infant mortality rate which is higher than many nations spending far less on thealth care.
  • Variability Plagues the Health Care Delivery System

    Figure #3
    Figure #3

    Variability Plagues the Health Care Delivery System

    12-fold
    Variation in postoperative sepsis rates across the 34 OECD nations.
    40-fold
    Variation in charges for a hip replacement at U.S. hospitals

The Solution: Improving Value For Patients

Solving our health care crisis begins with getting all stakeholders to agree on a single overarching goal: improving health outcomes for patients while controlling the costs to deliver that care. Competition has failed in health care for the simple reason that it is based upon entirely wrong metrics. We must reorient health care around value for patients, rather than current drivers like volume of care, procedures, geography, or the discounts negotiated by insurers. Only then can we create a system that delivers sustained improvements in health outcomes and efficiency.

Read About The Value-based Health Care Framework

 

Related Resources

  • October 2013
  • Harvard Business Review

The Strategy That Will Fix Health Care

by Michael E. Porter and Thomas H. Lee
 
  • Sep 2011
  • Harvard Business Review

How to Solve the Cost Crisis in Health Care

by Robert S. Kaplan and Michael E. Porter
 
  • Jul 2016
  • Harvard Business Review

How to Pay for Health Care

by Michael E. Porter and Robert S. Kaplan
 
  • “The fundamental goal of economic policy is to enhance competitiveness, which is reflected in the productivity with which a nation or region utilizes its people, capital, and natural endowments to produce valuable goods and services.”
    — Michael Porter Clusters and Economic Policy White Paper, October 2009
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