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america care driven health in industry largest loses market service transformation who who win

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  2. Market-Driven Health Care- Who Wins, Who Loses in the Transformation of America's Largest Service Industry
    Cover of ISBN 0201489945Market-Driven Health Care
    Who Wins, Who Loses in the Transformation of America's Largest Service Industry:
    • Book by Regina E. Herzlinger.
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Market-Driven Health Care- Who Wins, Who Loses in the Transformation of America's Largest Service Industry

Cover of ISBN 0201489945Market-Driven Health Care
Who Wins, Who Loses in the Transformation of America's Largest Service Industry:
Book by Regina E. Herzlinger. Perseus Books 379 pages Hardcover Published 1997-01.
      • Review:: 'market s in healthcare? Herzlinger is a card-carrying member of the club that believes that markets can cure all social ills, and like all members of this club, she plays fast and loose with reality. For instance, she tries to present the vision market as an exemplar of how market forces can work in healthcare. Vision is one of the few areas of medicine where patients can appraise the value of the service, the quality of the provider, and make decisions about how much they are willing to pay. That is simply not the case when a patient is really sick with heart failure, and needs multiple medications, multiple doctors, and is probably going to be hospitalized repeatedly. In trying to argue that all aspects of medicine can follow market rules the way vision services do, Herzlinger conveniently ignores one critical fact: there is no true market in the healthcare industry, and there can't be. Kenneth J. Arrow, Nobel Prize winning economist pointed this out 30 years ago, and his observations are still true today. Providers (doctors and hospitals, and increasingly the drug and device industries) drive demand for their services. They are the ones who decide what patients need. The notion that patients can have suffient information to be able to determine what they need is probably only true for the 80 percent of people who consume 20 percent of healthcare costs. The 20 percent who eat up 80 percent of costs are sick with multiple conditions. Imagine your grandmother is in the hospital, sick with diabetes, and pneumonia, scared, having a hard time breathing, and she's supposed to sort through whether or not she should pay the $600 to call in the pulmonologist? The patients with chronic, multiple, debilitating disorders actually need the exerpertise of medical professionals. Her focused factories have come to pass: they are called specialty, or even super-specialty, hospitals, which focus on one procedure, or one category of specialty. There are cardiac hospitals, for instance, that only perform by-pass surgery, cardiac catheterization,angioplasty, and stenting. Are they good at what they do? Sure, because they focus on a narrow range of procedures, they only take insured patients, and they don't take anybody with comorbidities. Of course, the really expensive patients tend to have comorbidies. The effect of the specialty hospitals on local healthcare markets? They do not bring down costs, they simply drain profit from full-spectrum community hospitals, which still have to care for all those patients with pneumonia and who don't have health insurance. The imbalance of information between physician and patient is simply insurmoutable, and without that kind of balance, markets don't work very well.
      • Review:: 'So she's no Tolstoy, but the ideas are great. No one will accuse Ms. Herzlinger of being a great writer, but her conversational style is easy to read and she does have some good ideas for how the healthcare industry should be. Ideas that still haven't been implemented even now, 8 years after it was written. She does make a fairly convincing argument for how focused factories could reduce costs. In addition, suggestions that everybody should have health insurance, that healthcare providers should not be insulated from market forces, that consumers are the ones with the real power to stop the soaring healthcare costs, and that they'll only curtail spending when given incentive to do so are good points that can't be made often enough. Points that seem even more relevant today given the continued increase in healthcare costs, the inability of the HMO system to manage them, and the spiraling problem the growing uninsured population is creating (the more uninsured people there are, the more insurance costs, which increases the number of uninsured, etc.). She has good ideas, I think it's time people listened. It's of vital importance that the healthcare system incorporate what's great about America, what has made America a leader in every other industry: innovation and sensibly regulated free markets. Ms. Herzlinger gives us a good way to get it done.

        I also have to ask if some of the other reviewers actually read the book. The author gives a pretty good analysis of how focused factories would reduce costs, using that 20% of the people produce 80% of the costs as a cornerstone of her argument. Also, she cites physicians' inability to deal with market forces as a cause of the problem and gives suggestions for how to deal with it.

      • Review:: 'There is no "market" in American medical care, period. Market forces cannot solve the medical crisis. No market exists. Knowledge of what is sold is inequivalent: if patients knew the difference between colonoscopy and colposcopy, they would not know the fair market value of either procedure. Unlike buying a car, where the dealer knows you can walk off, patients cannot negotiate, and can't determine the quantity of medical services needed. Eyeglasses constitute a misleading example. Physicians are the principal drivers of all expenditure on medical care. Without a medical license, nothing can be ordered or prescribed. This fact must be faced squarely: the supplier of services regulates the level of demand for medical services. Annual outlays have now reached $1.6 trillion with no end in sight to the physician-driven escalation in expenditures. This is not COST inflation, but relentless EXPENDITURE INCREASE driven chiefly by an oversupply of medical doctors. If this system is ever to be fixed, these stubborn realities must be faced. This author evidently has no clue that there is not a "market" operating in the world of medical care delivery, thus her analysis is unhelpful.
      • Review:: 'Admirable goals,solutions ignore some regulatory constraints The author accurately identifies a subpopulation of patients who are middle class,time constrained, and annoyed with the difficulty of obtaining quick evaluation and therapy for a variety of health problems of varying complexity. After examining a number of systems for health care delivery, she gives the nod to highly specialized and focused units such as the Shouldice Clinic for hernia surgery in Canada. There are several problems with the soultions she proposes: 1) Goverment regulatory agencies and third party payers currently refuse to pay multiple consultants for seeing a patient on the same day. 2)Patients with complex multisystem problems may be ill served in such a focused system- eg. the patient who has congestive heart failure and a hernia. 3)There would monumental problems with education of medical students and residents in such a system. While this is a secondary consideration in a market driven system in which there is a physician surplus, if we fail to adequately educate physicians for future generations the law of supply and demand will ultimately come back to haunt us.
      • Review:: 'This book has been widely hailed in the medical community. This book received rave reviews in such varied publications as the Wall Street Journal, Fortune, the New England Journal of Medicine, the British Medical Journal, JAMA, and the New Democrat. It won the book year award from the American College of Health Care Executives. Since its publication it has regularly appeared in the Ingram Books' list of top 50 current events best sellers for good reason.

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