Archive for the ‘Health Care’ Category
In a wide-ranging Q&A session to close out the morning of day one of the World Innovation Forum, Michael Porter touched on everything from politics to Wall Street to the state of the health care industry.
While the majority of the Q&A was spent on healthcare—unsurprisingly, given his presentation earlier in the morning–he was perhaps at his most illuminating when talking about wider issues in the economy and business world at large. Below are some of the better points he made on those issues:
• Wall Street’s value is to enable companies the ability to invest and prosper. Instead it is focused on itself now. See Goldman Sachs.
• We’ve defined capitalism too narrowly. Companies need to be efficient in the way they use resources. Sustainability!
• Companies have defined themselves too narrowly recently. Thus, companies thought that protecting the environment wasn’t part of their job. Food companies thought that providing healthy food wasn’t part of their job. The world is changing, and some companies are waking up to the fact that they need to provide products that have deeper social value. Key quote: “Companies that provide products that are not good for their customers in some deep social sense are ultimately not going to survive.”
• We are not reinvesting in our science and technology base. Education in those areas is failing. Let’s not hold back the rest of the world. Americans need to step up and be more dynamic, aggressive, and innovative.
• He’s worried about short termism—particularly in financial markets. His suggestions for dealing with that include providing incentives for long-term thinking. One example: cutting capital gains tax, but requiring organizations to vest the gains for years.
• After two years of cost-cutting, companies and leaders need to sit down with their team and make sure they still have some kind of strategy.
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.”