Redefining German Health Care
Michael E. Porter, Clemens Guth
Increasing demand − Aging populations and increasing burden of disease • More treatable diseases • Rising costs − Health spending has risen faster than economic growth in most OECD countries since 1970 − Significant challenge to government budgets • Inconsistent quality and low efficiency • Limited or non-existent measurement of costs or outcomes • Zero-sum competition that is not focused on patients or patient outcomes • Universal access to health insurance with generous coverage of a broad
... ge of services • Strong solidarity principle in providing coverage regardless of financial means • Free choice of health plans and providers • Extensive network of capable providers • Many patients receive excellent and compassionate care • High and rising costs • Overcapacity and low reimbursement levels leading to excessive utilization of services − High service utilization and costs are not producing better health outcomes • High and rising costs • Overcapacity and low reimbursement levels leading to excessive utilization of services − High service utilization and costs are not producing better health outcomes • Large variation in quality across providers • Cost is the actual expense of patient care, not the charges billed or collected • Cost should be measured around the patient • Cost should be aggregated over the full cycle of care for the patient's medical condition, not for departments, services, or line items • Cost depends on the actual use of resources involved in a patient's care process (personnel, facilities, supplies) − The time devoted to each patient by these resources − The capacity cost of each resource − The support costs required for each patient facing a resource Utilize information technology to enable restructuring of care delivery and measuring results, rather than treating it as a solution itself The playing field between statutory and private health plans must be leveled. Competition should be based on achieving superior health value for subscribers, rather than risk selection.