Five Cases in Creating and Destroying Value

Case studies are most useful when they recover the decisions and uncertainties behind an outcome. In healthcare this is especially hard. Outcomes depend on payment rules and capital cycles that no management team controls, on evidence that arrives years after the decision, and on a payer who is rarely the patient. A celebrated company may have made a poor decision that a generous formula rescued; a failure may have followed a reasonable decision overtaken by a rule change, a currency or a lab result. The task is to separate what decision-makers could have known from what happened afterwards.

The five cases below were chosen to test all four factors of the care equation, to balance value created against value captured or destroyed, and to span the United States and the rest of the world. They avoid the lead cases of earlier chapters. Kaiser Permanente is the longest-running test of whether integrated, prepaid care creates value, and of why it travels so badly. Discovery's Vitality asks whether an insurer can earn money by making its members healthier, and how strong the proof of that is. DaVita shows a company that delivers essential care and earns most of its profit from one minority of payers, and the political fight that follows. Philips Respironics shows how a failure of proof after launch can destroy a franchise built over decades. mPharma shows what building looks like in Ghana and West Africa, where patients pay cash and the currency is part of the cost of goods. Figures are those reported in the research companion's company profiles and strategic-move entries, which record their sources and confidence. Interpretations are analytical judgments, not claims that one decision caused an outcome.