A User Manual for Healthcare

Buy This Book

A talk to 25-plus Master of Business Administration (MBA) students heading into healthcare internships came with an unusual pitch:

buy The Health Care Handbook, backed by a personal money-back guarantee

The confidence is earned. For anyone new-ish to healthcare, this is where to start, a smart, no-nonsense way to understand the edges of the massive puzzle called United States healthcare. In a healthcare strategy classroom, the book gets read essentially cover to cover, and students keep it long after the semester.

Scaffolding for a 17 Percent Economy

The New York Times called the book a user manual, and the label fits. It is deliberately broad, covering the industries, government bodies and nonprofit entities that together make up more than 17 percent of the United States economy. The deeper value is structural. The book puts things into buckets, hospitals, payers, pharmaceutical companies, quality institutions and providers, and that mental scaffolding means every new fact learned afterward has a place to live. It answers the basic questions on big topics that everyone assumes everyone else already knows. What distinguishes inpatient from outpatient facilities? How many hospitals exist, more than 5,500? What share operates for profit, less than a third? What ownership, service and network models exist, and what types of outpatient facilities operate alongside them? Nobody sounds smart in a healthcare meeting without these foundations.

Ingredients for the Harder Questions

Orientation is the start, not the destination. The book supplies the main ingredients for critical thinking about difficult, nuanced questions, and curiosity remains the reader's number one asset. The authors say it directly in the preface: "Everything is always more complicated than you think." Sample questions the book equips but does not answer: if six of the ten leading diseases are chronic conditions relying on prevention rather than cures, how should the nation optimize its 900,000 inpatient beds? With average hospital margins near 7 percent, propped up by charitable donations, and a quarter of hospitals unprofitable, does inevitable consolidation threaten quality and access in remote areas? As Medicare, private payers and employers push outcomes-based payment, how do leaders manage portfolios straddling fee-for-service and fee-for-value, knowing incrementalism works until it does not? Discussion questions like these turn a user manual into a strategy course.

Useful Because Physicians Wrote It

The book would be less useful and less credible without clinician authors. Its usefulness has nothing to do with distinguishing an angiogram from an angioplasty, because the book is decidedly not medical or surgical. It is useful because two medical students, Elizabeth Askin and Nathan Moore, had a pile of questions, researched the answers and put their findings on paper, self-publishing through their medical school. It is credible for the simplest reason: they are physicians, writing about the system they work inside. That combination, outsider curiosity with insider standing, is rare in healthcare writing and explains the book's durability.

The Triangle That Governs Everything

United States healthcare is largely broken and needs change, change that must crack through administrative complexity, shifting regulation, misaligned incentives, outdated norms, poor data quality and Wall Street's drive for profits. That change arguably needs to be physician-led, which makes this book a fitting start. It level-sets the discussion on the triple aim and the inherent trade-offs among cost, access and quality.1 From the outset, honesty requires agreeing that perfect quality, unlimited access and zero cost cannot coexist. Honesty also requires agreeing the country can do better than the current scoreboard. Cost runs at 17 percent of gross domestic product (GDP), averaging 9,000 dollars per American and growing faster than in any other Organisation for Economic Co-operation and Development (OECD) country.2 Access is uneven, with a quarter of Americans reporting difficulty reaching the system. Quality varies widely, with Americans receiving only 55 to 70 percent of recommended care and infant mortality ranking worst among the 19 wealthiest OECD nations.

How to Study It Like a Strategist

Reading the book well differs from merely finishing it. Build your own one-page map of the five buckets as you go, because drawing the structure fixes it in memory better than highlighting ever will. After each chapter, write two questions the material raised but did not answer, since those questions become your interview material and your engagement hypotheses later. Pair each institutional chapter with one current news story about the same players, watching how the scaffolding immediately organizes the headlines. Consultants preparing for a healthcare case should rehearse explaining one payment model aloud in two minutes, the test of whether orientation became understanding. The book supplies the map. The study habits determine whether you can navigate with it.

Start Less Ignorant

The authors bold their own caveat in the preface, admitting the book may oversimplify, and frankly that is what newcomers need. The goal is getting less ignorant about the economic drivers, business models and trade-offs of an expanding industry. At just over 240 pages, the book runs one-tenth the length of the Affordable Care Act it helps explain.3 Motivated students devour it, one undergraduate covering 90 pages within a week of the recommendation. For consultants, analysts, investors and clinicians-turned-managers, the prescription is identical. Read the user manual first, hold the humility it teaches, and then start asking the harder questions it deliberately leaves open.

• 1Institute for Healthcare Improvement
• 2OECD
• 3Affordable Care Act