In most developed markets, health care suffers from two large and growing problems. The first is the significant variation in patient outcomes, even for routine procedures. For example, one in seven people in Europe will likely need either hip or knee replacement surgery at some point in their lives. Germany has some of the world’s best orthopedic clinics, yet patients who undergo hip surgery in that country experience a vast range of outcomes. Those who are treated at the country’s worst-performing hospitals require follow-up surgery within two years at rates that are 18 times higher than for patients at the best-performing hospitals.
That same disparity is seen for other medical conditions and in other markets. (See Exhibit 1.) In the Netherlands, whose health care consistently ranks among the best in Europe, there is a ninefold variation in the rate of post-surgical complications from radical prostate surgery, a procedure that can have a major impact on a patient’s quality of life. In Sweden, the complication rate for some patients who undergo cataract surgery can be 36 times that of other patients. These variations are mainly the results of differences in medical practices—rather than demographics or other complicating medical conditions in patients—and can, therefore, be addressed.