Perspective The NEW ENGLAND JOURNAL of MEDICINE july 9, 2009 n engl j med 361;2 nejm.org july 9, 2009 109 unsustainable trajectory of the sys- tem, much less to offsetting the rising costs of an aging popula- tion and new medical advances. Today there is a new openness to changing a system that all agree is broken. What we need now is a clear national strategy that sets forth a comprehensive vision for the kind of health care system we want to achieve and a path for getting there. The central focus must be on increasing val- ue for patients — the health out- comes achieved per dollar spent. 1 Good outcomes that are achieved efficiently are the goal, not the false “savings” from cost shifting and restricted services. Indeed, the only way to truly contain costs in health care is to improve out- comes: in a value-based system, achieving and maintaining good health is inherently less costly than dealing with poor health. True reform will require both moving toward universal insur- ance coverage and restructuring the care delivery system. These two components are profoundly interrelated, and both are essen- tial. Achieving universal coverage is crucial not only for fairness but also to enable a high-value delivery system. When many peo- ple lack access to primary and preventive care and cross-subsi- dies among patients create major inefficiencies, high-value care is difficult to achieve. This is a prin- cipal reason why countries with universal insurance have lower health care spending than the United States. However, expanded access without improved value is unsustainable and sure to fail. Even countries with universal cov- erage are facing rapidly rising costs and serious quality prob- lems; they, too, have a pressing need to restructure delivery. 2-4 How can we achieve universal coverage in a way that will sup- port, rather than impede, a fun- damental reorientation of the de- livery system around value for patients? There are several criti- cal steps. First, we must change the na- ture of health insurance compe- tition. Insurers, whether private or public, should prosper only if they improve their subscribers’ health. Today, health plans com- pete by selecting healthier sub- scribers, denying services, nego- tiating deeper discounts, and shifting more costs to subscrib- ers. This zero-sum approach has given competition — and health insurers — a bad name. Instead, health plans must compete on health care 2009 A Strategy for Health Care Reform — Toward a Value-Based System Michael E. Porter, Ph.D. D espite many waves of debate and piecemeal reforms, the U.S. health care system remains largely the same as it was decades ago. We have seen no convincing approach to changing the Copyright © 2009 Massachusetts Medical Society. All rights reserved. Downloaded from www.nejm.org at UNIVERSITY OF MICHIGAN on July 13, 2009 .