Why Not Better and Cheaper?: Healthcare and Innovation

An engaging account of innovation in healthcare and why the results fall short for patients and society.The evolution of the cell phones we carry in our pockets demonstrates that quality can increase while prices fall. Why doesn't healthcare also get better and cheaper? In Why Not Better and Cheaper?, James B. Rebitzer and Robert S. Rebitzer offer an answer to this question. Bringing together research on incentives, social norms, and market competition, they argue that the healthcare system generates the wrong kinds of innovation. It is too easy to profit from low-value innovations and too hard to profit from innovations that reduce the costs of care. The result is a healthcare system that is profusely innovative yet remarkably ineffective in discovering ways to deliver increased value at lower cost. Why Not Better and Cheaper? sheds new light on the trajectory of innovation in healthcare, and how to point innovation in a better direction.

Table of Contents:
Chapter 1: Introduction and Overview Chapter 2: Economically Valuable Innovation Chapter 3: Missing Innovations Chapter 4: Shared Savings Chapter 5: Beyond Financial Incentives Chapter 6: Competition, Innovation, and Disruption Chapter 7: Dilemmas and Opportunities Appendix 1: Does Innovation Respond to Expected Profits? Appendix 2: Incentives Leading to Overlooked Innovations Outside of Healthcare Acknowledgments References Index

About the Author :
James B. Rebitzer is the Peter and Deborah Wexler Professor of Management at Boston University's Questrom School of Business where he was founding chair of the department of Markets, Public Policy, and Law. Formerly, he was the Mannix Professor of Healthcare Finance and Economics and Chair of the Economics Department at the Weatherhead School of Management at Case Western University. He is a research associate at the National Bureau of Economic Research and a research fellow at the Institute for the Study of Labor (IZA). He has received The Health Care Research Award from the National Institute of Health Care Management and the Kenneth J. Arrow Award from the International Health Economics Association. Robert S. Rebitzer is a senior advisor at Manatt Health and a Distinguished Career Institute Fellow at Stanford University. Formerly, he was a partner in the healthcare strategy practice of Accenture and a Vice President of UnitedHealth Group. He has also served as an advisor to the California Healthcare Foundation and to Stanford University's Clinical Excellence Research Center. He is currently chairman of the board of El Camino Health System.

Review :
The Rebitzers explore an overlooked feature of our healthcare system: it is too easy to profit from low-value innovations and too hard for cost-reducing innovations to find a buyer. The book is full of engaging examples and policy ideas. Anyone who cares about innovation in healthcare and wants to make things better should read it. In Why Not Better and Cheaper?, James and Robert Rebitzer elegantly explain the misaligned incentives in American healthcare and how to fix them. This is a must-read for anyone looking to make healthcare better and cheaper. The book does not disappoint—it is a masterclass in medicine, law, economics, strategy, and psychology—infused with clever facts and written with a steadfast determination to make the reader smarter about taking health care, which is so doggedly frustrating and expensive, and innovating to make it better and cheaper. At last, a book that explains why a country with extraordinary innovative capacity has a wildly expensive and underperforming healthcare sector—and it's not just the prices! The Brothers Rebitzer use fascinating examples to pinpoint the perverse incentives driving low-value innovation in the U.S. healthcare sector and to show what can be done to can set them right. This is a most welcome and important work on U.S. healthcare. Two brothers, Jim and Bob Rebitzer, one an economist and one a business consultant, combine their unique perspectives to give us fresh and deep insights into why healthcare innovation in the U.S. is the way it is and what we can do about it. The promise of innovation is to provide better technologies at lower cost. But in healthcare markets, we often observe that ideas for potential cost-reducing innovations fail to take root and never diffuse to benefit patients. In this fantastic book, Jim and Bob Rebitzer provide a compelling diagnosis of this problem and lay out a road map for how to fix it. A compelling analysis of a question that has long puzzled experts: why innovation does not reliably increase value in healthcare. Combining insights from economics with close inspection of the institutional features of the healthcare system, Why Not Better and Cheaper? shines new light on this health policy conundrum. A must-read for all who want to improve the American health system. Why Not Better and Cheaper?, shines a light on the remarkable anomaly that, unlike any other industry, innovation and value creation are often opposites in healthcare. The Rebitzers demonstrate this in fascinating and tangible ways, pointing out that meaningful advancements often struggle to see the light of day. An essential read for anyone in healthcare. In a highly readable way, the Rebitzers do a masterful job of synthesizing a vast amount of theory and practice to answer an important question: why we don't have cost reducing innovation in healthcare. The answer lies in the incentives, norms, and competitive structure of our complex, pluralistic, and highly profitable health system. They dissect the problem carefully and compellingly and offer cogent policy suggestions about how to get more healthcare and health for the money we spend. But even these innovations may not be enough to alter the course of a multi trillion dollar 'Pimp My Ride' health system. Jim and Bob Rebitzer present a compelling analysis about the sources of dysfunction in the American healthcare system. They combine a broad understanding of economics with deep knowledge of healthcare to explain why important innovations often have trouble spreading widely, while marginal ones can proliferate at ruinous prices. And their recommendations, involving incentives, creative application of professional norms, and thoughtfully-regulated competition, offer a useful and optimistic path forward. A concise book with nuggets of insight missing from the conventional economics literature... the Rebitzers have focused correctly on the 'win-win' potential for cost-saving innovation in US health care. This book doesn't provide solutions to many serious problems in US health care, such as the shocking lack of reliable insurance coverage. But by pointing us in the right direction for policy reforms, whether through simplified patent legislation or novel market based incentives to reward the development of new drug-resistant antibiotics, the authors provide a valuable roadmap for making US health care better and cheaper. In this compelling and challenging volume, James Rebitzer and Robert Rebitzer importantly and rightly question the expensive and inefficient health care system in the US... Abundant with examples of how health care organizations have experimented with and adopted innovative change, the book describes the many persistent barriers impeding the successful adoption of needed changes. In this compelling and challenging volume, James Rebitzer (Questrom School of Business, Boston Univ.) and Robert Rebitzer (Stanford Univ.) importantly and rightly question the expensive and inefficient health care system in the US...Recommended. Advanced undergraduates through faculty; professionals. If you are a health economist, then this book is firmly in familiar territory as it outlines some of the classic sources of market failure using practical examples and attempts tobuild some solutions around them.