In the July 10/17 issue of The New Republic, Michael Porter and Elizabeth Olmsted Teisberg present their prescription for a more effective and efficient health care system based on measuring and reporting outcomes on a provider basis — a common-sensical approach which nonetheless is rarely seen in the US health care system.

Most people have better information about their restaurants, cars, and sellers on eBay than they do about their medical care. And the information that is available — health plan ratings, subscriber satisfaction surveys, and rankings based on doctor or hospital reputation — do not really measure health outcomes.

This lack of transparency means that health care providers aren’t really competing on what matters most — the value they provide. We can define the value of a procedure being performed by a provider as the effectiveness of that procedure divided by how much it costs. This is the measure that both end consumers and insurers really care about; getting the highest quality treatment at the lowest price. Furthermore, competition among providers on the basis of value is what will drive the discovery and adoption of more effective standards and procedures, which is of great benefit to society as a whole. So what’s holding us back?

Measuring results is the single-most important step in transforming health care, not only in the United States, but in other countries, too. So what’s standing in the way of developing more such measures? Some providers have resisted outcome reporting, which means that mandatory reporting might be necessary… Another impediment has been the fear, by insurers, amon others, that publicizing outcome measures would lead patients to demand care from the most expensive doctors and hospitals. Biut, by and large, the best health care providers are the most efficient. They make fewer errors and enable faster recovery and less long-term disability. They also tend ot manage diseases better, so that fewer patients have full-blown, acute crises. And this, ultimately, is the mindset that should define our health care system: Better health outcomes do not have to cost more money. On the contrary, they may end up costing less.

The New Republic article is adapted from their recent book Redefining Health Care: Creating Value-Based Competition on Results.