01 Dec 2013

Faculty Opinion: Making It Better

From overseas, bright ideas for American health care
Re: Michael Chu; Richard Hamermesh; Robert Huckman; John Quelch; Ray Goldberg
by Regina Herzlinger


by Regina E. Herzlinger

Health care now represents some 18 percent of the American economy. With its costs continuing to rise, and with tens of millions uninsured, we in the United States are understandably preoccupied with our own system and solutions—but sometimes overly so, and to our detriment. Americans and other Western health-care leaders are often unaware of the many advances in health-care management and delivery that are being made "under the radar" in diverse parts of the world. To further disseminate the exciting global best practices and new ideas I discovered while writing cases for my MBA course Innovating in Health Care, I created a forum at which health-care leaders from around the globe could gather to learn from each other and share breakthrough knowledge.

At HBS in June, with Senior Lecturer Michael Chu as coleader, we launched Business Innovations in Global Health Care (BIG), an Executive Education program that attracted, among others, the Nigerian and Liberian ministers of health, the founders of South Africa's second-largest health insurance firm, a highly successful Russian health-care venture capitalist, and an Australian health-care delivery entrepreneur. Our faculty included the Swiss government's former top health official and HBS professors Hamermesh, Huckman, Quelch, and Rangan.

“In global health care, we've found that a key driver of innovation
is necessity—truly the mother of invention.”

In global health care, we've found that a key driver of innovation is necessity—truly the mother of invention. For example, in Brazil, Russia, and China, which have universal coverage, and in India, which does not, demand for health care far outstrips the state's ability to pay for and supply it, which has led to the emergence of private health-care innovations that offer good value for the money. It was in Africa that we first saw sensible, low-cost health-insurance plans that protect people against financially catastrophic expenses and offer policies that reward the chronically ill for self-care, with tremendous reduction in their costs. A variety of coverage plans have emerged in response to a desire for lower-cost insurance, as would be expected in a consumer-driven market.

BRIC countries are home to many health-service innovations, too. In India, for example, telemedicine—health care dispensed via electronic communication—is widely used, and cancer care is now delivered in a hub-and-spoke model, a system that is much cheaper and more convenient for patients because it is built around local treatment. At the hub, expensive advanced radiotherapy is available around the clock, with lower prices for those willing to come at night. The spokes are community cancer centers where chemotherapy, radiation, and rehabilitation take place.

As America struggles with its fee-for-service model, Amil, a Brazilian accountable-care organization that provides coverage and owns its own health-care facilities, offers a variety of products with various levels of cost and provider choice. Its impressive organic growth also has many lessons on how to train and evaluate people.

Modeled after HBS professor emeritus Ray Goldberg's highly successful Agribusiness Program, BIG was a forum for sharing success stories like these and for building a network of global health-care entrepreneurs who can learn from each other about local health-care innovations. In the dealmaking, networking, and connections made among BIG attendees, the program—which will be offered again in June—has already borne fruit. But we still have a lot more to learn and to accomplish.

Regina E. Herzlinger is the Nancy R. McPherson Professor of Business Administration at HBS. For more information about BIG, visit bit.ly/PsI5ts.


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