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August 27, 1997

Market-Driven Health Care: Who Wins, Who Loses in the Transformation of America's Largest Service Industry

Author Affiliations

American Medical Association Chicago, Ill

JAMA. 1997;278(8):686. doi:10.1001/jama.1997.03550080096050

Regina Herzlinger, who holds a Harvard Business School chair, writes about restructuring the health care service sector in the same consumer-friendly way that has successfully transformed American industry over the last two decades. She has both a prediction and a prescription for the health care sector.

The author's prediction is twofold. First, the failure of the health care sector to keep pace with the remainder of the service industry in adopting a consumer orientation makes it increasingly anachronistic. For the most part, the health industry still treats consumers as though their time were worthless and they were ignorant about available choices. Unlike other sectors of the service industry, health care providers have done little to adapt to consumers' increasing knowledge, demand for information, ability to make their own decisions, and the increasing opportunity cost of their time. Health care financing and delivery institutions will face increasing pressure to respond to