American business gurus and academics often make big claims. Professor Michael Porter is no exception. His recent Harvard Business Review paper is simply called ‘Strategies that will fix healthcare’. Despite sounding like the silver bullet and being US focussed, it is worth reading for anyone interested in improving healthcare in the UK. Here is a quick summary:
The goal is ‘value’
Porter has for some time advocated the measurement of ‘value’ in healthcare. Focus on activity or cost reduction in isolation is pretty meaningless. The key is to maximise value for patients: that is, achieving the best outcomes at the lowest cost. The increasing focus on (or at least talk about) clinical outcomes is not unique to Porter, however, the incorporation of cost into the equation should resonate with funders and commissioners across the globe.
In the paper, Michael Porter sets out 6 steps towards maximising value.
Step 1: Organize into Integrated Practice Units (IPUs)
The first principle in structuring any organization or business is to organize around the customer and the need.
Step 2: Measure Outcomes and Costs for Every Patient
Rigorous measurement of value (outcomes and costs) is, according to Porter, perhaps the single most important step in improving health care.
Step 3: Move to Bundled Payments for Care Cycles
Neither of the dominant payment models in health care—global capitation and fee-for-service—directly rewards improving the value of care. Global capitation, a single payment to cover all of a patient’s needs, rewards providers for spending less but not specifically for improving outcomes or value. Fee-for-service couples payment to something providers can control—how many of their services, such as MRI scans, they provide—but not to the overall cost or the outcomes.
Step 4: Integrate Care Delivery Systems
There are huge opportunities for improving value as providers integrate systems to eliminate the fragmentation and duplication of care and to optimize the types of care delivered.
Step 5: Expand Geographic Reach
If value is to be substantially increased on a large scale, however, superior providers for particular medical conditions need to serve far more patients and extend their reach through the strategic expansion of excellent IPUs.
Step 6: Build an Enabling Information Technology Platform
The value agenda requires a supporting information technology platform. Historically, health care IT systems have been siloed by department, location, type of service, and type of data (for instance, images). According to Porter, such platform must:
- Be centred on patients
- Use common data definitions
- Encompass all types of patient data
- Medical record accessible to all parties involved in care
- Leverage condition specific templates
- Enable easy information extract