Using Competition to Reform Healthcare

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Michael E. Porter and Elizabeth Olmsted Teisberg:

The starting point for developing strategy in any field is to define the relevant business or businesses in which an organization competes. Health care delivery is no different. Health care providers do not think of themselves as businesses, but they are in the business of providing services to patients. (Those who are uncomfortable with the notion of businesses in health care can substitute the term service lines.)

The question “What business are we in?” is an important one because it guides an organization’s thinking about who its customer is, what needs it is trying to meet, and how it should organize. Implicit in every business definition is a view of how value is created. Aligning an organization’s view of value with actual value is a precondition for excellent performance.

In some fields, defining the relevant business is straightforward. In health care this is not the case, in part because of the way medicine has traditionally been structured and organized. Many hospitals, for example, see themselves in the “hospital” business or the “health care delivery” business, competing with other hospitals based on their overall service offering. An even broader definition of the business, “health care,” is common among experts in health policy. This leads them to favor large health systems, believing that health care is best organized by combining insurance and health care delivery into one vertically integrated, full-line system.

The Key Ingredients for a “Great City”

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Paul Graham ruminates on the essence of a technology hub:

I think you only need two kinds of people to create a technology hub: rich people and nerds. They’re the limiting reagents in the reaction that produces startups, because they’re the only ones present when startups get started. Everyone else will move.

Do you really need the rich people? Wouldn’t it work to have the government invest in the nerds? No, it would not. Startup investors are a distinct type of rich people. They tend to have a lot of experience themselves in the technology business. This (a) helps them pick the right startups, and (b) means they can supply advice and connections as well as money. And the fact that they have a personal stake in the outcome makes them really pay attention.

Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue– or perhaps more accurately, Vogue editors running a math journal.

Grahams words are a must read for local politicians. Madison’s (Wisconsin) biggest challenge with respect to new business development is it’s parochialism. Living in San Francisco years ago, I was impressed by the general willingness to try new things and take risks. We have a world class University, lots of bright citizens but not so many people willing to take financial and career risks.

Email Addresses to Steer Snail Mail?

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Ben Charny:

The U.S. Postal Service was recently asked to start delivering packages and letters based on someone’s e-mail rather than street address.

he request is from Los Angeles-based Inventerprise LLC, which wants to conduct a trial run of its so-called Shelmail e-mail-to-snail addressing system sometime in 2008.

The Shelmail proposal is noteworthy because it suggests that e-mail addresses are a better means of delivering physical mail than what the postal service uses now.

Put another way, Shelmail questions just what constitutes someone’s “address” nowadays. For now and probably decades going forward, it’s a description of a physical location, in the form “101 Second Street, San Francisco, Calif., 94105.”

An answer in search of a question?

Vivisimo Criticizes Search Engine Personal Data Collection

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Tom Foremski:

Mr Valdes-Perez is also a critic of the behavioral technologies that the large search engine companies use to try and improve the search experience by collecting personal data. Clusty.com does not collect any user data which means that there can be no privacy breaches, accidental or subpoenaed.

“Users search based on their whims at the time, and not on past behavior. It is much better to provide a user with several options on what they are searching for and allow them to choose,” he says.

Best 2006 Car Deals

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Dan Lienert:

Chop isn’t the only one hacking prices down to size. Car buyers remember 2005 as a goldmine for car deals, because major American manufacturers, including General Motors (nyse: GM – news – people ) and Ford Motor (nyse: F – news – people ), made employee-pricing plans available to the public for a period of time. In comparison, 2006 has been something of a letdown so far, at least from the consumer standpoint. But the year is still young, discount deals are out there and the domestics might have these kinds of fire sales again.