Information is the best medicine.

By and

Michael E. Porter is the Bishop William Lawrence university
professor at Harvard Business School. Elizabeth Olmsted Teisberg is
associate professor of business administration at the University of
Virginia's Darden School of Business. This article is adapted from
their book, Redefining Health Care: Creating Value-Based
Competition on Results.Strokes are the leading cause of long-term disability in the United
States and the third-most common cause of death. It is also
extremely costly: Conservative estimates suggest it costs the
nation almost

$58 billion per year. Successful recovery depends partly on luck, of
course. But it also depends significantly on how and where care is

Treatment for strokes varies markedly from one hospital to another
due to different professional opinions as well as different
capabilities and equipment. Nationally, less than 5 percent of
ischemic stroke patients are given intravenous drugs to clear the
blocked blood vessel in the brain. But some hospitals treat up to
15 percent of such patients with this approach. Even for large
ischemic strokes, which account for most of the costs, some
hospitals do little to intervene. Others use mechanical
intervention via a catheter in the brain or a drug delivered via a
catheter directly to the clot.

Not only do the hospitals' methods vary widely, so do their results.
A patient with the same condition could fully recover if treated in
one hospital and not survive if treated in another. But emergency
medical technicians don't consider this information when taking
stroke victims to the hospital. Instead, they are often required to
take every stroke victim to the nearest hospital. Why? Because, in
most states, nobody collects and disseminates information about
which hospitals achieve the best results.

In a normal functioning market, producers of a good or providers of
a service compete on results--their ability to provide the highest
quality at the lowest prices. Excellent competitors prosper and
grow, weaker rivals are restructured or go out of business.
Value--the quality received per dollar spent--increases. Health
care could not be more different. Most people have better
information about their restaurants, cars, and sellers on eBay than
they do about their medical care. And the information that is
available--health plan ratings, subscriber satisfaction surveys,
and rankings based on doctor or hospital reputation--do not really
measure health outcomes. Even the most basic data, such as how many
patients with a particular diagnosis a hospital or physician group
has treated, is rarely available.

U.S. News & World Report makes a start with its annual rankings of
hospitals. But, just to be considered in twelve specialty areas,
hospitals must offer broad service lines and have a wide array of
equipment and facilities, be affiliated with a medical school, or
be a member of the Council of Teaching Hospitals. These criteria
exclude many specialty hospitals and community hospitals. This
whole approach reinforces the bias that community hospitals are not
as good. Yet studies reveal that, for some medical conditions,
community hospitals often achieve equal or better outcomes--and at
lower costs--than teaching hospitals.

Without true results-measurement, doctors, hospitals, and health
systems have traditionally competed in unproductive ways--shifting
costs to others, attempting to accumulate bargaining leverage with
insurance companies, or restricting services. This has eroded
quality, fostered inefficiency, and driven up administrative costs.
Fortunately, we can fix this. The key lies in redefining the nature
of health care competition. And the first step is measuring
results, so the power of competition will be directed at driving
dramatic improvements in the value of health care.

In the last few years, government and the business community--the
two largest purchasers of health care--have tried to improve
quality by compiling and publishing information about whether
doctors and hospitals comply with established treatment guidelines.
Some guidelines are generic, such as whether hospitals use
computerized order entries (to reduce errors) and have procedures
in place to control infections. Some guidelines apply to particular
medical conditions, such as whether a hospital administers aspirin
to a patient arriving with a heart attack.

Practice standards make sense, to a point: Appropriate practice will
reduce the high rates of medical errors and inappropriate care. But
process-compliance is not the same as high quality. Different
providers using the same processes achieve very different results,
because guidelines cover only some aspects of care. Good medical
practice requires adjustments to address each patient's particular
circumstances. Also, it is difficult to keep process guidelines up
to date with the latest medical knowledge, since adopting new
guidelines often depends on developing consensus among experts,
which happens slowly. Ironically, too much attention to
process-compliance can actually impede innovation rather than
encourage it.

Results are what really matter. But measuring results isn't as
simple as tracking death rates. In spine care, for example, it's
important to measure pain reduction, improvement in range of
movement, functional ability, and the time between the beginning of
care and the return to work or restoration of normal activity.
Outcome measures should also cover the full cycle of care, not just
individual interventions: It is important to know the combined
results of surgery and physical therapy, because the two together
drive patient outcomes and insight about how to improve care. Only
by measuring results over the full cycle of care is it possible to
track complications leading to high rates of repeat surgery or

To be meaningful, outcome measures must also be adjusted for risk:
If a hospital takes on the hardest cases, its results will be
affected. And there must be a major role for experts. Doctors and
medical societies should participate in defining measures; experts
should also be able to check and correct the accuracy of data
before (and after) it is published.

The feasibility of measuring results and their impact is not in
doubt. There is extensive outcome data, for example, about organ
transplants. In 1984, Congress responded to widespread concern over
the fairness of organ allocation by establishing the Organ
Procurement and Transplantation Network. The Network is operated
under federal contract by the United Network for Organ Sharing
(unos), a nonprofit organization. Hospitals that receive organs must
report data, so reporting is effectively mandatory. The data is
national, includes all providers, and goes beyond the sum of
individual hospitals' reports. Unos keeps track of whether each
patient ends up needing re-transplantation (of the same organ) at
another institution, even if the original provider is not aware of
the repeat surgery. The registry of transplant data now contains
information on over 371,000 transplant recipients.

The transplant outcome data is publicly available on the Web, sorted
by organ type and by patient age, gender, ethnicity, and blood
type. Unos adjusts these results for risk and presents the
information in clear and well-annotated charts. For each transplant
center, it is possible to calculate how long its patients live--and
how long the organs it transplants typically last. Although many
patients still need help interpreting the information, and although
not all referring doctors use the data, the transplant surgery
teams are wellaware of where they stand--and how they stack up
against teams at other centers. Not coincidentally, performance in
transplants has continued to improve, including successful
transplants in sicker patients.

Public outcome data has also driven dramatic improvement in heart
surgery. The state of New York reports outcome data for coronary
artery bypass graft (cabg) procedures. A group of cardiothoracic
surgical experts devised the measures, along with methods to adjust
them for patient circumstances. The program publicly reports
riskadjusted mortality rates of cabg procedures by hospital and by
surgeon. In the first four years of New York's reporting program,
deaths from cardiac surgery fell by 41 percent. While many patients
and referring doctors stuck in the old mindset do not use the data,
even uninformed patients benefited from the significant outcome
improvement. Moreover, the Society of Thoracic Surgeons (STS) was
motivated by the public reporting to collect and improve outcome
measurement for many types of heart surgery. Superb outcomes
determine which methods are taught to other surgeons at STS
meetings. While the STS data is not public, even uninformed
patients benefit, once again, by the innovations in care enabled by
measuring and analyzing outcomes.

Measuring results is the single-most important step in transforming
health care, not only in the United States, but in other countries,
too. So what's standing in the way of developing more such
measures? Some providers have resisted outcome reporting, which
means that mandatory reporting might be necessary. Government needs
to ensure the establishment of a structure to collect and publish
information about medical conditions, the way unos does for
transplants. Another impediment has been the fear, by insurers,
among others, that publicizing outcome measures would lead patients
to demand care from the most expensive doctors and hospitals. But,
by and large, the best health care providers are the most
efficient. They make fewer errors and enable faster recovery and
less long-term disability. They also tend to manage diseases
better, so that fewer patients have full-blown, acute crises. And
this, ultimately, is the mindset that should define our health care
system: Better health outcomes do not have to cost more money. On
the contrary, they may end up costing less.

By michael e. porter and elizabeth olmsted teisberg

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