How physicians can change the future of health care.

Today's preoccupation with cost shifting and cost reduction undermines physicians and patients. Instead, health care reform must focus on improving health and health care value for patients. We propose a strategy for reform that is market based but physician led. Physician leadership is essential. Improving the value of health care is something only medical teams can do. The right kind of competition--competition to improve results--will drive dramatic improvement. With such positive-sum competition, patients will receive better care, physicians will be rewarded for excellence, and costs will be contained. Physicians can lead this change and return the practice of medicine to its appropriate focus: enabling health and effective care. Three principles should guide this change: (1) the goal is value for patients, (2) medical practice should be organized around medical conditions and care cycles, and (3) results--risk-adjusted outcomes and costs--must be measured. Following these principles, professional satisfaction will increase and current pressures on physicians will decrease. If physicians fail to lead these changes, they will inevitably face ever-increasing administrative control of medicine. Improving health and health care value for patients is the only real solution. Value-based competition on results provides a path for reform that recognizes the role of health professionals at the heart of the system.

Redefining competition in health care.

The U.S. health care system is in bad shape. Medical services are restricted or rationed, many patients receive poor care, and high rates of preventable medical error persist. There are wide and inexplicable differences in costs and quality among providers and across geographic areas. In well-functioning competitive markets--think computers, mobile communications, and banking--these outcomes would be inconceivable. In health care, these results are intolerable, with life and quality of life at stake. Competition in health care needs to change, say the authors. It currently operates at the wrong level. Payers, health plans, providers, physicians, and others in the system wrangle over the wrong things, in the wrong locations, and at the wrong times. System participants divide value instead of creating it. (And in some instances, they destroy it.) They shift costs onto one another, restrict access to care, stifle innovation, and hoard information--all without truly benefiting patients. This form of zero-sum competition must end, the authors argue, and must be replaced by competition at the level of preventing, diagnosing, and treating individual conditions and diseases. Among the authors' well-researched recommendations for reform: Standardized information about individual diseases and treatments should be collected and disseminated widely so patients can make informed choices about their care. Payers, providers, and health plans should establish transparent billing and pricing mechanisms to reduce cost shifting, confusion, pricing discrimination, and other inefficiencies in the system. And health care providers should be experts in certain conditions and treatments rather than try to be all things to all people. U.S. employers can also play a big role in reform by changing how they manage their health benefits.