Hospitals Should Compete on Quality

What would happen if hospitals competed on quality?

Competition is rare in health care. Really. Health care is full of rivalry. There’s a difference.

From the trusty Merriam-Webster OnLine: competitor: “one selling or buying goods or services in the same market as another;” rival: “one of two or more striving to reach or obtain something that only one can possess.”

I would suppose that rivalry is similar to what Porter calls zero-sum competition.

Competition is healthy and it should force prices down while improving the product delivered. Here’s the problem: prices are not decreasing. And quality is improving—because it is the right thing to do—not because of the forces of competition.

It may be possible to compete on price at some point in the future. But until health insurance is reformed so that patients know how much health care really costs, I just don’t see it happening. If we’re really interested in competition, and competition sooner rather than later, it is going to have to be quality of care that leads the way.

This isn’t a new idea, but I like it, and I think it could go somewhere.  The prevailing question has been “will competition improve quality?” But why not just compete on quality since we’re having such a difficult time competing on price?

CMS is working toward a quality comparison solution.  But its development is slow and functionality minimal.  Quality measures are difficult to agree upon for comparison purposes.  Difficult is the key word here, it is not impossible.  It is another opportunity to be proactive about positive change.  Hospitals are already late: Health 2.0 companies are pushing the comparison tools forward.  Thankfully.

Here’s the question: is your organization hiding behind a rock or leading the way in quality reporting?  Competition on quality could very well be the future.  And if so, the transition will be swift (it won’t be phased in by CMS, it will be forced in by outside forces).  Will you be ready?

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