Who Killed Health Care?
Regina Herzlinger
November 12, 2007
Santa Monica

When it comes to buying a car or a house, Americans have plenty of information and plenty of choices.

Yet when it comes to health care, information and choices remain in short supply, and that's a major reason our system is in such trouble, said Regina Herzlinger of Harvard Business School.

Fortunately, under growing pressure from both employers and employees, reform of the nation's health-care system is imminent, she predicted during a talk Monday at the Milken Institute.

"We're at a tipping point," she said. "We're going to have profound change very soon."

Herzlinger addressed the development of the U.S. health-care system; what has been done to try to improve it; and what she feels is the best way to unravel the mess: a consumer-oriented, market-driven system in which users, not providers, make decisions about the health care they want. She calls this a "let the flowers bloom" system.

In answer to the question that is the title of her book, "Who Killed Health Care?" she pointed to three culprits: insurance companies, the government and hospitals, whose profit-making or political motives affect their decisions on patient care.

The current system, bloated with bureaucracy and one-size-fits-all rules, has increased costs and illness rather than reduced them, she said. Consumers don't have the incentives to stay healthy that would exist in a system where they have choices and are rewarded for healthier lifestyles.

Giving consumers the power to make their own decisions on how much and what kind of insurance to buy, and giving them performance evaluations of doctors and hospitals, would produce a more equitable, less costly and better system, Herzlinger said. It would also help take the onus off the back of employers, who often don't know what their workers want in terms of health care.

"Would you want your employer to buy your car or your home?" she asked. "Of course you wouldn't. They don't know what you want. So why are they buying your health insurance?"

Herzlinger is the Nancy R. McPherson Professor of Business Administration at the Harvard Business School and a Senior Fellow at the Manhattan Institute Center for Medical Progress. She has been named one of the "100 Most Powerful People in Health Care" by Modern Healthcare.