Health Care

Health Care is a featured research topic and an initiative at Harvard Business School.
Over the past several decades, HBS has built a foundation in health care research, from Clayton Christensen's application of disruptive innovations and Regina Herzlinger's concept of consumer-driven health care to Michael Porter's use of competitive strategy principles. Today our research focuses on 
  • how management principles and best practices from other industries can be applied;
  • how the process of innovation can be improved;
  • how principles of strategy and consumer choice can be utilized;
  • how information technology can expand access, decrease costs, and improve quality;
  • how new approaches in developing nations can impact global health.
  1. Dissecting Costs of CT Study: Application of TDABC (Time-driven Activity-based Costing) in a Tertiary Academic Center

    Robert S. Kaplan, Yoshimi Anzai, Marta E. Heilbrun, Derek Haas, Luca Boi, Kirk Moshre, Satoshi Minoshima and Vivian S. Lee

    The lack of understanding of the real costs (not charge) of delivering healthcare services poses tremendous challenges in the containment of healthcare costs. In this study, we applied an established cost accounting method, the time-driven activity-based costing (TDABC), to assess the costs of performing an abdomen and pelvis computed tomography (AP CT) in an academic radiology department and identified opportunities for improved efficiency in the delivery of this service.

    Keywords: healthcare costs; medical imaging; computed tomography; Activity-Based Costing; Cost Accounting; Activity Based Costing and Management; Health Care and Treatment; Performance Efficiency; Health Industry;


    Kaplan, Robert S., Yoshimi Anzai, Marta E. Heilbrun, Derek Haas, Luca Boi, Kirk Moshre, Satoshi Minoshima, and Vivian S. Lee. "Dissecting Costs of CT Study: Application of TDABC (Time-driven Activity-based Costing) in a Tertiary Academic Center." Academic Radiology 24, no. 2 (February 2017): 200–208. View Details
  2. Fitbit

    Regina E. Herzlinger, Christine Snively and Sarah Mehta

    In 2016, Fitbit remained the world’s leading producer of activity trackers—an increasingly crowded space—with over 21 million units sold that year. Fitbit’s suite of products allowed users to track the number of steps taken, calories burned, and heart rate activity. Fitbit devices were marketed to individual consumers as well as corporate wellness programs and employers. Though Fitbit was primarily focused on wellness, should management consider evolving into a chronic disease management company?

    Keywords: health care and treatment; technology; Health Care and Treatment; Hardware; Technology; Health Testing and Trials; Health Industry;


    Herzlinger, Regina E., Christine Snively, and Sarah Mehta. "Fitbit." Harvard Business School Case 317-007, January 2017. View Details
  3. Managing Healthcare Costs and Value

    Robert S. Kaplan, Michael E. Porter and Mark L. Frigo

    Rising healthcare costs are a major global challenge. A number of factors contribute to this trend, including aging populations and medical technology. But an underlying and misunderstood source of healthcare’s escalating costs has been the inability of healthcare provider organizations (such as large medical centers) to properly measure and manage the true costs and value of healthcare. The paper contains an interview with Kaplan and Porter about their experiences with improving the measurement of health care outcomes and cost.

    Keywords: Health Care and Treatment; Cost; Cost Management; Cost Accounting; Health Industry;


    Kaplan, Robert S., Michael E. Porter, and Mark L. Frigo. "Managing Healthcare Costs and Value." Strategic Finance (January, 2017). View Details
  4. Selective Regulator Decoupling and Organizations' Strategic Responses

    Jonas Heese, Ranjani Krishnan and Frank Moers

    We posit that nonprofits that provide a greater supply of unprofitable services (beneficent nonprofits) face lenient regulatory enforcement for mispricing in price-regulated markets. Consequently, beneficent nonprofits exploit such regulatory leniency and exhibit higher mispricing. Drawing on organizational legitimacy theory, we argue that both regulators and beneficent nonprofits seek to protect their legitimacy with stakeholders, including those who demand access to unprofitable services. Using data from hospitals, we examine mispricing via "upcoding," which involves misclassifying ailment severity. Archival analysis indicates less stringent regulatory enforcement of upcoding for beneficent nonprofit hospitals, defined as hospitals that provide higher charity care and medical education. After observing regulator leniency, beneficent hospitals demonstrate higher upcoding. Our results suggest that lenient enforcement assists beneficent nonprofits to obtain higher revenues in price-regulated markets.

    Keywords: Regulator leniency; nonprofit organizations; beneficence; mispricing; upcoding; Nonprofit Organizations; Health Care and Treatment; Revenue; Health Industry;


    Heese, Jonas, Ranjani Krishnan, and Frank Moers. "Selective Regulator Decoupling and Organizations' Strategic Responses." Academy of Management Journal 59, no. 6 (December 2016). (Selected for Best Paper Proceedings of the 2015 Academy of Management Annual Meeting. Winner of the Healthcare Management Division of the Academy of Management 2015 Best Paper Award.) View Details
  5. Health Care Needs Real Competition

    Leemore S. Dafny and Thomas H. Lee

    The U.S. health care system is inefficient, unreliable, and crushingly expensive. There is no shortage of proposed solutions, but central to the best of them is the idea that health care needs more competition. In other sectors, competition improves quality and efficiency, spurs innovation, and drives down costs. Health care should be no exception. Yet providers and payers continue to try to stymie competition. Many are actively pursuing consolidation, buying up market share, and increasing their bargaining power. In this article, the authors argue that 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. All stakeholders in the health care industry—regulators, providers, insurers, employers, and patients themselves—have roles to play in creating real competition and positive change. In particular, five catalysts will accelerate progress: Put patients at the center of care, create choice, stop rewarding volume, standardize value-based methods of payment, and make data on outcomes transparent.

    Keywords: Competition; Health Care and Treatment; Health Industry; United States;


    Dafny, Leemore S., and Thomas H. Lee. "Health Care Needs Real Competition." Harvard Business Review 94, no. 12 (December 2016): 76–87. View Details
  6. Pete & Gerry's

    Jose Alvarez and Natalie Kindred

    Keywords: "Pete & Gerry's; " eggs; egg industry; avian flu; cage free; free range; Agribusiness; Agriculture; industry structure; industry evolution; price volatility; small business; strategy formulation; branding; marketing; premium brand; Growth; consumer; consumer behavior; animal welfare; retail; grocery; food; food labeling; Animal-Based Agribusiness; Advertising Campaigns; Business Model; Change; Change Management; Disruption; Transition; Trends; Volatility; Customer Value and Value Chain; Entrepreneurship; Food; Ethics; Health; Problems and Challenges; Operations; Sales; Risk and Uncertainty; Quality; Public Opinion; Value; Strategy; Agriculture and Agribusiness Industry; Retail Industry; United States;


    Alvarez, Jose, and Natalie Kindred. "Pete & Gerry's." Harvard Business School Case 517-048, November 2016. View Details
  7. BrightStar Care: The Evolution of a Leadership Team

    Boris Groysberg, Colleen Ammerman and John D. Vaughan

    BrightStar Care was a rapidly growing franchise of home health care agencies. Founded by husband and wife team JD and Shelly Sun as a single agency near Chicago in 2002, by 2016 nearly 300 BrightStar franchises were open across the United States, generating over $300 million in revenue. BrightStar was now a very different company from the one Shelly and JD had started up during their first year of marriage. Shelly Sun, CEO, had decided to franchise the business in 2004, believing that the franchise model presented a relatively low-risk and high-return approach to growing BrightStar. As franchises began to sell, Sun quickly set about building scalable operations and infrastructure, including a centralized technology function and custom software for franchisees. As more and more locations opened around the United States, she focused on growing BrightStar’s national marketing profile and putting measures in place to distinguish BrightStar’s services as higher-quality than that of its competitors. A shifting regulatory landscape and labor shortages posed challenge, but BrightStar continued to grow swiftly. As the company evolved and Sun attempted to spend more time away from headquarters, surveying the field and building relationships, she knew she needed a strong senior management team. Some members of her senior team had been with BrightStar for years, expanding their responsibilities as the company expanded, while others she recruited from outside. In the early 2010s, Sun was close to filling all BrightStar’s crucial executive roles, but had to consider whether some longtime leaders were the right fit for the company’s current needs. As she thought through the composition of her senior team, she also revamped her board of advisors and pursued international franchising opportunities and a debt recapitalization. By early 2016, Shelly was looking to the company’s next phase of growth while handing management of her executive team to BrightStar’s President and COO.

    Keywords: health care services; entrepreneurs; board of directors; boards of directors; health care industry; growth strategy; Organizational change; brand positioning; entrepreneurial organizations; entrepreneurial management; Franchising; Family-owned business; home health care; managing growth; management styles; organizational development; talent management; women executives; women and leadership; Business Startups; Family Business; Small Business; Talent and Talent Management; Governing and Advisory Boards; Health Care and Treatment; Human Capital; Leadership Development; Leadership Style; Business or Company Management; Growth and Development Strategy; Management Analysis, Tools, and Techniques; Management Skills; Management Style; Management Succession; Management Systems; Management Teams; Brands and Branding; Marketing Strategy; Strategy;


    Groysberg, Boris, Colleen Ammerman, and John D. Vaughan. "BrightStar Care: The Evolution of a Leadership Team." Harvard Business School Case 417-020, November 2016. (Revised November 2016.) View Details
  8. One Obstacle to Curing Cancer: Patient Data Isn't Shared

    Richard G. Hamermesh and Kathy Giusti

    Precision Medicine requires large datasets to identify the mutations that lead to various cancers. Currently, genomic information is hoarded in fragmented silos within numerous academic medical centers, pharmaceutical companies, and some disease-based foundations. For new precision therapies to be developed, these data sets need to be shared broadly. Patients can help lead this effort by exercising their right to have their anonymized data made more broadly available.

    Keywords: healthcare; Technological and Scientific Innovation; Research and Development; Cancer care in the U.S.; cancer treatment; precision medicine; personalized medicine; data sharing; Technological Innovation; Data and Data Sets; Health Disorders; Medical Specialties; Research and Development; Customization and Personalization; Health Industry; United States;


    Hamermesh, Richard G., and Kathy Giusti. "One Obstacle to Curing Cancer: Patient Data Isn't Shared." Harvard Business Review (website) (November 28, 2016). View Details
  9. Hygeia Group: Delivering Quality Care in Nigeria

    Robert F. Higgins and Ifedayo O. Kuye

    Fola Laoye is the Group Managing Director of Hygeia Group, a Nigerian healthcare insurer and provider, and she is deciding on the optimal strategy to grow the provider arm of her business. Hygeia Group was founded in the 1980s by her physician parents, and although operating a healthcare company in Nigeria offered challenges particularly in human resources and infrastructure, by 2011, it had expanded to include three hospital and clinic sites and a large insurance company. The company has just received a large equity investment from an international private equity company, and it has decided to focus on expanding tertiary care capabilities in its hospitals. A consulting team has identified cardiology, oncology and advanced surgery (orthopedic and minimally invasive) as areas with strategic potential. However, Ms. Laoye must decide which of these options offers the greatest growth opportunities. In addition, as her company grows, she must decide how best to structure the payor and provider aspects of her business in a way that maximizes synergies for both.

    Keywords: healthcare; healthcare industry; Hospitals; Nigeria; Health Care and Treatment; Growth and Development Strategy; Health Industry; Nigeria;


    Higgins, Robert F., and Ifedayo O. Kuye. "Hygeia Group: Delivering Quality Care in Nigeria." Harvard Business School Case 817-088, November 2016. View Details
  10. Adding Value by Talking More

    Robert S. Kaplan, Derek A. Haas and Jonathan Warsh

    The prevailing fee-for-service payment model has led health care administrators and physician practices to impose severe constraints on the time physicians spend talking, for which they are reimbursed poorly or not at all. New value-based reimbursement models, however, such as bundled payments, accountable care organizations, and shared savings plans, provide powerful incentives for physicians to regain control over the quantity and quality of time they spend talking. We’ve identified many situations in which having physicians and other clinical personnel talk more with patients and each other can be the least expensive and most effective approach for producing better outcomes at lower total costs.

    Keywords: Value Creation; Cost Management; Health Care and Treatment; Customer Focus and Relationships; Health Industry;


    Kaplan, Robert S., Derek A. Haas, and Jonathan Warsh. "Adding Value by Talking More." New England Journal of Medicine 375, no. 20 (November 17, 2016): 1918–1920. View Details
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