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World Innovation Forum: Michael Porter on Healthcare

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Professor Michael Porter opened the 2010 World Innovation Forum with his thoughts on innovation in health care. Taking the audience on a whirlwind tour of global health care delivery outcomes (well, those in Germany and Sweden, at any rate), he attempted to draw some lessons that can be applied within the U.S. system.

The message he had for employers was a simple one: that they should demand that their health plan provides value. In fact, “the cost of poor health is much greater than the cost of health benefits.” For that reason, employers shouldn’t skimp on health benefits.

He places much of the responsibility for improving the health care sector on big business, stating that companies should have on-site clinics for preventive care, as the best results go hand in hand with access and proximity to care. He had no word, however, on how to handle the situation for unemployed people.

The need for innovation in the sector, says Porter, is acute—and highly pressing. The reason, he told the audience, is simple: it has the highest customer demand of any business in the world. That’s because “all of you are going to be customers of the healthcare system; it’s just a matter of time.”

That reality brings with it a set of challenges. Within the U.S., the healthcare industry has seen “breathtaking innovations in science,” but no corresponding innovative leaps in terms of organization, structure, and measurement of care. That, says, Porter, leaves us in a situation where “[t]he problem in healthcare today is in management”—especially when it comes to how we use the technologies at our disposal.

The core message behind most of Porter’s presentation: that by measuring results and organizing health care around conditions, the problem of “provider silos” is reduced. That causes costs to drop—by as much as 50 percent in some cases—and outcomes to rise.

Porter also suggest bundling payments for health care, rather than paying each provider of services separately. And he’s an advocate of multi-location hospitals/health care centers—he says the current system of non-networked local hospitals is akin to a “Mom and Pop” model.

One final takeaway from Porter’s presentation: when it comes to healthcare “Sweden is nirvana.”


Written by Phil Stott

June 8, 2010 at 8:35 am

One Response

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  1. health plans may be expensive but it is really very necessary to get one for yourself -;-

    Digital Caliper

    December 1, 2010 at 6:53 pm

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