What a difference a few years makes. Michael Porter is the Harvard Business School prof who charged into health care a few years back. He (with Elizabeth Teisberg) wrote a book called Redefining Health Care which suggested how all kinds of changes on the delivery side of health care would solve all of our problems. Those changes were not exactly secrets to people who, say, read Michael Millenson’s Demanding Medical Excellence—a much better book written ten years earlier which explained why radical change on the delivery system side wasn’t going to happen. The answer?
It’s the Incentives, stupid.
There was a lot of fuss in the blogosphere in which in which people who understand health care (like Vince Kuraitis, Brian Klepper and, um, me) essentially told Porter and Teisberg that what they were espousing couldn’t work without a change in incentives. The two B school profs in public (and also from Teisberg to me in a series of very bizarre emails) left us all in no doubt that we were wrong, and that the delivery system could change without any radical insurance structure reform. Quoting my 2007 piece:
According to Porter “Most proposals to overhaul US healthcare systems — including extending insurance to all Americans — address the “margins” of the problem”.
In fact the very first time Porter presented on health care in a webinar in 2004 I asked him directly why he didn’t espouse Enthoven’s managed competition proposal which would change the incentives in the market and allow providers to compete based on outcomes. His response was that you couldn’t manage competition and to live diss Enthoven. I quote the relevant passage from my review below
He managed to talk for 45 minutes about how providers should change behavior without mentioning incentives. I asked a question about why he felt that the system might change in the absence of Medicare or any other big payer pushing a change in incentives. As part of the question I mentioned that the changes he wanted were the same ones that Enthoven’s managed competition would have brought into fruition. Porter was pretty dismissive of managed competition and Enthoven, saying that there was no such thing as competition that could be “managed”, but here he’s just wrong.
Well what a difference a few years makes. I’ve heard rumblings from the odd Porter talk that we did have to think about how this all impacts providers, but yesterday I think he formally came over to the light.
In a piece published in the NEJM yesterday Porter now says that we should do six things (my paraphrasing here)
1. Change the nature of health insurance competition. so that insurers are incented to improve their population’s health.
2. Keep employers in the system (MH-he’s wrong but it’s not a biggie)
3. Equalizing the tax deductibility of insurance (MH-we should remove it but at least leveling the playing field is OK)
4. Create large statewide or multi-state insurance pools,
5. Give income-based subsidies to help lower-income people buy insurance.
6. Individual mandate
Fabulous. Porter now gets it. Unless we change the way that payers pay providers—which requires massive change in insurer regulation and management of what they do and how they compete—we wont get change in the health care system. It’s good to have him on board.
Only a curmudgeon would mention that his list mostly matches what Enthoven wrote when he introduced the notion of managed competition in 1977