The Good A valuable look at how real competition in health care is being stymied.
The Bad Be warned: This wonky tome is heavy going.
The Bottom Line An important book for people who actually have to fix a $2 trillion industry.
It's no secret how messy the U.S. health-care industry is. Americans spend 16% of gross domestic product on health care, but quality is poor. Medical mistakes are the nation's third-leading killer, yet bad doctors and hospitals rarely go out of business. Most amazingly, innovation is insanely slow: The average time between discovery of a medical innovation and wide adoption is 17 years.
But what to do about it? Two books recommend solutions that reflect their authors' backgrounds. In The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor, former tech financier Andy Kessler says the solution is better technology -- specifically, imaging and diagnostics that catch disease sooner. He would replace many doctors and nurses with cheap, reusable scanners and chips just as banks zapped tellers with ATM machines. In Redefining Health Care: Creating Value-Based Competition on Results by Harvard Business School megastar Michael E. Porter and the University of Virginia's Elizabeth Olmsted Teisberg, two management profs say the problem is bad management. Patients, doctors, and the big companies that pay for most private insurance don't know how to measure health-care quality and value, so they slash coverage to cut costs, the authors say. Each book shows part of the way to better care, at prices that, if not falling, at least don't grow at this decade's double-digit rates.
Of the two volumes, Kessler's is by far the more entertaining. It's a smart-aleck tour of academic labs where Kessler says the future is being invented. Think Bill & Ted's Excellent Adventure meets The New England Journal of Medicine. Kessler, an ex-semiconductor analyst and hedge fund partner, interviews researchers refining cardiology scanners and others trying to build cheap, reliable genetic tests and biomarker assays to find cancer. Kessler insists that we can dent the $400 billion-a-year bill for heart disease and cancer if we spot problems sooner. He admits his revolution will take years and that new diagnostics will initially cost a lot. But he insists Silicon Valley's innovation-financing machine will pony up billions to make sure the change spreads and drives down unit costs as better science emerges.
The smart part of Kessler tells us about scanners that can parse hearts in minute detail, while his silly side goes on about mouse poop and his own virtual colonoscopy. We are spoon-fed biology, but the science may still lose some readers. There are also evocative profiles of people such as Don Listwin, a Cisco Systems Inc. (CSCO
) zillionaire whose mother's death from cancer prompted him to pour his fortune into diagnostics research.
If Kessler's book is more fun, Porter and Teisberg's wonky volume is more important. They see an interrelated lack of technology and information that blocks real competition. Having 10 doctors or four hospitals vie for business is irrelevant if a patient knows only anecdotes from a neighbor or a second doctor. Because of that ignorance, providers compete based on location or amenities such as designer hospital gowns. The authors push for the spread of nascent databases that track both prices and health outcomes, so consumers can know who gives value for the dollar.
Porter and Teisberg say real innovation will come when consumers and their employers act on this data. Companies must buy health plans based on value, broadly defined, rather than settling for lower rates or hiking deductibles, the authors argue. And employers must make sure workers can access services like HealthShare or Subimo that rank providers. Then companies should give employees incentives for adopting healthy lifestyles, going into disease-management programs, or switching to top providers. Most provocatively, the authors say business should put top executives, not mid-level managers, in charge of benefits, then judge them not only by cost-cuts but also by advances in workers' health and productivity.
The most interesting thing about both books is what they don't say: Neither believes Washington holds much of the answer to what ails health care. Instead, they demand that business solve the problem. And time is short: The winner of the next Presidential election could serve until 2017, and the Medicare trust fund is expected to go broke in 2018. If business thinks there's time to waste, business is wrong.
Copyright 2006, by The McGraw-Hill Companies Inc. All rights reserved.
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