Monday, March 12, 2007

The Accountant Is In

Continued from page 3

By Anne Murphy

Herzlinger's vision of health care boils down to transparency, so that consumers can compare prices and outcomes or other measures of quality; choice, so that insurance products can be customized and allocated by users; and deregulation, so that flexible, specialized networks of providers can focus on the treatment of particular chronic diseases. "That someone with heart disease or diabetes has to assemble and manage their own team of providers, often in the midst of a health crisis, is cruel," Herzlinger says.

That vision is not without critics--on the right as well as the left. Administration policy makers have taken umbrage at Herzlinger's contention that Bush's proposals for health security accounts and high-deductible insurance fail to deliver enough choice or buying power to consumers. ­Managed-­care proponents, even conservative-leaning ones, are uneasy with the laissez-faire she endorses in the health-care marketplace. And although she favors universal coverage, her opposition to government-funded universal care is so vehement that she has been pilloried in left-leaning blogs.

"There are some people who dislike my work intensely," says Herzlinger. But she has answers for her critics. To exponents of universal health care who say her system would penalize the poor and the sick, she counters, "If the poor weren't stuffed into Medicaid, if they got as much money as anybody else to spend on health insurance and the freedom to choose what they needed, they'd have better access and better quality of care." To the defenders of managed care, whom she calls "micromanaging technocrats" and "gatekeepers," she cites unabated double-digit annual cost increases in recent years and the rise of the patients'-rights movement: "Just-say-no health insurance is generally conceded to be a failure."

To further the cause of promoting innovation and choice in health care, Herzlinger is mentoring a generation of like-minded iconoclasts and entrepreneurs, many of them former students, who are building consumer-driven-health-care companies. She serves as a board director for at least one. "Having Regi on your board is like the Good Housekeeping Seal of Approval," says HBS alumnus Todd Farha, CEO of WellCare, a $3.7 billion health-insurance company in Tampa, FL. "She brings credibility."

In between board meetings, lectures, and classes, ­Herz­linger is thinking ahead and usually thinking big. Retirement appears nowhere on her horizon; it's just another long-range market opportunity. "Teaching business to young entrepreneurs in China or Russia," she says, picking up the phone to take her next conference call. "That might be fun in my 70s." And "consumer" might well be the first word she learns in Mandarin.