Harvard Business Review Leadership Library: The Executive Collection (12 Books)

CHAPTER 11

Redefining Competition in Health Care

Michael E. Porter

Elizabeth Olmsted Teisberg

THE U.S. HEALTH CARE SYSTEM HAS REGIStered unsatisfactory performance in both costs and quality over many years. While this might be expected in a state-controlled sector, it is nearly unimaginable in a competitive market—and in the United States, health care is largely private and subject to more competition than virtually anyplace else in the world.

In healthy competition, relentless improvements in processes and methods drive down costs. Product and service quality rise steadily. Innovation leads to new and better approaches, which diffuse widely and rapidly. Uncompetitive providers are restructured or go out of business. Value-adjusted prices ...