Idea in Brief

The Problem

The U.S. health care system is inefficient, unreliable, and crushingly expensive. In other sectors, competition improves quality and efficiency, spurs innovation, and drives down costs. Yet health care organizations are actively consolidating in order to stymie competition.

The Solution

Health care payers and providers must stop fighting the emergence of a competitive health care marketplace and make competing on value central to their strategy.

The Way Forward

All stakeholders in the health care industry can catalyze change in five ways: Put patients at the center of care, create choice, stop rewarding volume, standardize value-based methods of payment, and make data on outcomes transparent.

Here’s the good news: Thanks to the Affordable Care Act, or Obamacare, more Americans have access to health care than ever before. The bad news? The care itself hasn’t improved much. Despite the hard work of dedicated providers, our health care system remains chaotic, unreliable, inefficient, and crushingly expensive.

A version of this article appeared in the December 2016 issue (pp.76–87) of Harvard Business Review.