This paper discusses the potential for increasing the use of competition in local health-care markets. The goal is to provide a guide for analyzing health-care markets and for identifying situations where competitive forces can improve market performance. The paper is aimed principally at planners who work for health system agencies and State health planning and development agencies. The economic analysis contained in this paper may also assist health benefits officers, health plan administrators, and others concerned with how market forces can be used in regulated health-care markets. For example, understanding the competitive process in health care can help corporate decision-makers in designing employee benefit packages and reimbursement schemes with incentives for cost containment. Originally published in 1982 by the Bureau of Economics of the Federal Trade Commission.

The U.S. health care system is in crisis. At stake are the quality of care for millions of Americans and the financial well-being of individuals and employers squeezed by skyrocketing premiums—not to mention the stability of state and federal government budgets. In Redefining Health Care, internationally renowned strategy expert Michael Porter and innovation expert Elizabeth Teisberg reveal the underlying—and largely overlooked—causes of the problem, and provide a powerful prescription for change. The authors argue that competition currently takes place at the wrong level—among health plans, networks, and hospitals—rather than where it matters most, in the diagnosis, treatment, and prevention of specific health conditions. Participants in the system accumulate bargaining power and shift costs in a zero-sum competition, rather than creating value for patients. Based on an exhaustive study of the U.S. health care system, Redefining Health Care lays out a breakthrough framework for redefining the way competition in health care delivery takes place—and unleashing stunning improvements in quality and efficiency. With specific recommendations for hospitals, doctors, health plans, employers, and policy makers, this book shows how to move health care toward positive-sum competition that delivers lasting benefits for all.

Government control has driven health care costs sky-high at the same time that it has reduced the quality of care. As America's health care system cries out for reform, should policymakers embrace even more government planning, or should they fight for more individual freedom? In this updated edition of their 2005 book, the authors tackle proposals that would let government manage even more of America's health care sector. The continuing problem of ever-rising health care costs makes this book as timely as ever.