Health Care
Health Care
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.
Initiatives & Projects
The Health Care Initiative and the Social Enterprise Initiative connect students, alumni, faculty, and practitioners to ideas, resources, and opportunities for collaboration that yield innovative models for health care practice.
Health CareSocial EnterpriseRecent Publications
Retailers and Health Systems Can Improve Care Together
By: Robert S. Huckman, Vivian S. Lee and Bradely R. Staats
- March–April 2024 |
- Article |
- Harvard Business Review
Health systems are struggling to address the many shortcomings of health care delivery: rapidly growing costs, inconsistent quality, and inadequate and unequal access to primary and other types of care. However, if retailers and health systems were to form strong partnerships, they could play a major role in addressing these megachallenges. While some partnerships do exist, they are rare and have only scratched the surface of their potential. Rather than focusing on the direct-to-consumer model that retailers have largely employed, the partnerships should offer much broader care.
Drawing on real-world examples, the authors outline four key actions that retailers and health systems should take: (1) They must move beyond convenience to offer comprehensive care. (2) They should move care from clinics into the home. (3) They should leverage data to improve clinical care and the customer experience. And (4) they should change how—and by whom—health care work is done. Implementing these four actions would generate improvements that would benefit not just patients but also the organizations that pay for their health care.
Cicely Saunders and the Modern Hospice Movement: A Brother's View
By: Amar Bhide and Srikant M. Datar
- 2024 |
- Working Paper |
- Faculty Research
This Case history describes the role of Dame Cicely Saunders (1918- 2005) in
shaping the modern hospice movement. It is narrated in the first person through the words of her
brother, Christopher Saunders (1926-2024) as told to one of the authors of this paper.
Best Buy Health: Enabling Care at Home
- February 2024 |
- Case |
- Faculty Research
This case explores retailer Best Buy’s decision to enter health care. Best Buy Health aims to enable care at home across three prongs: consumer health, active aging, and virtual care. A key pillar of Best Buy Health's strategy is leveraging the Geek Squad—the company's technical support agents who install technology and media products in the home—to set up remote patient monitoring devices for people with a chronic disease or those enrolled in a hospital-at-home program. Set in April 2023, the case finds senior company leaders reviewing the results of a pilot with Pennsylvania-based Geisinger Health System evaluating whether Geek Squad agents can safely expand timely access to care
Beyond the 510(k): The Regulation of Novel Moderate-Risk Medical Devices, Intellectual Property Considerations, and Innovation Incentives in the FDA’s De Novo Pathway
By: Mateo Aboy, Cristina Crespo and Ariel Stern
- 2024 |
- Article |
- npj Digital Medicine
Moderate-risk medical devices constitute 99% of those that have been regulated by the U.S. Food and Drug Administration (FDA) since it gained authority to regulate medical technology nearly five decades ago. This article presents an analysis of the interaction between the 510(k) process—the historically dominant path to market for most medical devices—and the De Novo pathway, a more recent alternative that targets more novel devices, including those involving new technologies, diagnostics, hardware, and software. The De Novo pathway holds significant potential for innovators seeking to define new categories of medical devices, as it represents a less burdensome approach than would have otherwise been needed historically. Moreover, it supports the FDA in its effort to modernize the long-established 510(k) pathway by promoting the availability of up-to-date device “predicates” upon which subsequent device applications can be based, reflecting positive spillovers that are likely to encourage manufacturers to adopt current state-of-the-art technologies and modern standards of safety and effectiveness. We analyze the characteristics of all the De Novo classification requests to date, including the submission type, trends, FDA review times, and device types. After characterizing how the De Novo process has been used over time, we discuss its unique challenges and opportunities with respect to medical device software and AI-enabled devices, including considerations for intellectual property, innovation, and competition economics.
Representation and Extrapolation: Evidence from Clinical Trials
By: Marcella Alsan, Maya Durvasula, Harsh Gupta, Joshua Schwartzstein and Heidi L. Williams
- February 2024 |
- Article |
- Quarterly Journal of Economics
This article examines the consequences and causes of low enrollment of Black patients in clinical
trials. We develop a simple model of similarity-based extrapolation that predicts that evidence is
more relevant for decision-making by physicians and patients when it is more representative of
the group that is being treated. This generates the key result that the perceived benefit of a
medicine for a group depends not only on the average benefit from a trial, but also on the share of
patients from that group who were enrolled in the trial. In survey experiments, we find that
physicians who care for Black patients are more willing to prescribe drugs tested in representative
samples, an effect substantial enough to close observed gaps in the prescribing rates of new
medicines. Black patients update more on drug efficacy when the sample that the drug is tested
on is more representative, reducing Black-White patient gaps in beliefs about whether the drug
will work as described. Despite these benefits of representative data, our framework predicts that
those who have benefited more from past medical breakthroughs are less costly to enroll in the
present, leading to persistence in who is represented in the evidence base.
Value-Based Health Care Can Transform the Treatment of Patients with Substance Use Disorder
By: Robert S. Kaplan and Sarah E. Wakeman
- January 19, 2024 |
- Article |
- Health Affairs Forefront
U.S. overdose deaths currently exceed 100,000 per year. New facilities, known as bridge clinics, are broadening access to high-quality care by offering outpatient substance use disorder (SUD) treatment with few access barriers. But many of the critical services offered by bridge clinics, such as recovery coaching and resource navigation are not consistently reimbursable under a fee-for-service payment model. Even for billable services, the existing billing codes fail to capture the intensity of bridge clinics’ full scope of work, such as post-emergency department (ED) ambulatory alcohol withdrawal management and medication for opioid use disorder (MOUD) initiation. These services, like ambulatory withdrawal management, often involve hours of direct nursing care and provider treatments whose costs far exceed current reimbursements under outpatient Current Procedural Terminology (CPT) codes. The payment failures can be addressed and solved, but not with ad hoc patches to the current fee-for-service system. Here, we describe how to dramatically improve care for patients with SUD by systematic adoption of four value-based care (VBC) principles. These principles, which are already being applied for other medical conditions, can be successfully introduced and scaled to accomplish large reductions in the US’s annual SUD-related death toll.
Vibrant Health
By: Henry McGee and Sarah Mehta
- January 2024 |
- Case |
- Faculty Research
This case is about nutritional supplements company Vibrant Health, among the 100 largest Black-owned businesses in the U.S. After acquiring the company from its white founder in 2007, co-owners Ted and Paige Parker significantly grew its sales. Set in September 2023, the case follows the Parkers as they work to increase Vibrant Health’s market share among Black consumers and simultaneously weigh the potential and pitfalls of tapping external investment to fuel the company’s growth.
Subset Scanning for Multi-Trait Analysis Using GWAS Summary Statistics
By: Rui Cao, Evan Olawsky, Edward McFowland III, Erin Marcotte, Logan Spector and Tianzhong Yang
- January, 2024 |
- Article |
- Bioinformatics
Multi-trait analysis has been shown to have greater statistical power than single-trait analysis. Most of the existing multi-trait analysis methods only work with a limited number of traits and usually prioritize high statistical power over identifying relevant traits, which heavily rely on domain knowledge.
Cost of Exempting Sole Orphan Drugs from Medicare Negotiation
By: Matthew Vogel, Olivia Zhao, William B. Feldman, Amitabh Chandra, Aaron S. Kesselheim and Benjamin N. Rome
- January 2024 |
- Article |
- JAMA Internal Medicine
Importance: The Inflation Reduction Act (IRA) requires Medicare to negotiate prices for some high-spending drugs but exempts drugs approved solely for the treatment of a single rare disease.
Objective: To estimate Medicare spending and global revenues for drugs that might have been exempt from negotiation from 2012 to 2021.
Design, Setting, and Participants: This cross-sectional study analyzed drugs that met the IRA threshold for price negotiation (Medicare spending >$200 million/y) in any year from 2012 to 2021 and had an Orphan Drug Act designation. We stratified drugs into 4 mutually exclusive categories: approved for a single rare disease (sole orphan), approved for multiple rare diseases (multiorphan), initially approved for a rare disease and subsequently approved for a nonrare disease (orphan first), and initially approved for a nonrare disease and subsequently approved for a rare disease (non–orphan first).
Outcomes: The primary outcomes were the number of sole orphan drugs, estimated Medicare spending on those drugs from 2012 to 2021, and global revenue since launch.
Results:Among 282 drugs, 95 (34%) were approved to treat at least 1 rare disease, including 25 sole orphan drugs (26%), 20 multiorphan drugs (21%), 13 orphan first drugs (14%), and 37 non-orphan first drugs (39%). From 2012 to 2021, Medicare spending on sole orphan drugs increased from $3.4 billion to $10.0 billion. Each year, a median (IQR) of $2.5 ($1.9–$2.6) billion in Medicare spending would have been excluded from price negotiation because of the sole orphan exemption. The cumulative global revenue of the median (IQR) sole orphan drug was $11 ($6.6–$19.2) billion.
Conclusions and Relevance: The sole orphan exemption will exclude billions of dollars of Medicare drug spending from price negotiation. The high level of global revenues achieved by these drugs, however, suggests that special exemption is unnecessary for them to achieve financial success. Congress could consider removing the sole orphan exemption to obtain additional savings for patients and taxpayers and to eliminate any potential disincentive for developing additional indications for these drugs.
Objective: To estimate Medicare spending and global revenues for drugs that might have been exempt from negotiation from 2012 to 2021.
Design, Setting, and Participants: This cross-sectional study analyzed drugs that met the IRA threshold for price negotiation (Medicare spending >$200 million/y) in any year from 2012 to 2021 and had an Orphan Drug Act designation. We stratified drugs into 4 mutually exclusive categories: approved for a single rare disease (sole orphan), approved for multiple rare diseases (multiorphan), initially approved for a rare disease and subsequently approved for a nonrare disease (orphan first), and initially approved for a nonrare disease and subsequently approved for a rare disease (non–orphan first).
Outcomes: The primary outcomes were the number of sole orphan drugs, estimated Medicare spending on those drugs from 2012 to 2021, and global revenue since launch.
Results:Among 282 drugs, 95 (34%) were approved to treat at least 1 rare disease, including 25 sole orphan drugs (26%), 20 multiorphan drugs (21%), 13 orphan first drugs (14%), and 37 non-orphan first drugs (39%). From 2012 to 2021, Medicare spending on sole orphan drugs increased from $3.4 billion to $10.0 billion. Each year, a median (IQR) of $2.5 ($1.9–$2.6) billion in Medicare spending would have been excluded from price negotiation because of the sole orphan exemption. The cumulative global revenue of the median (IQR) sole orphan drug was $11 ($6.6–$19.2) billion.
Conclusions and Relevance: The sole orphan exemption will exclude billions of dollars of Medicare drug spending from price negotiation. The high level of global revenues achieved by these drugs, however, suggests that special exemption is unnecessary for them to achieve financial success. Congress could consider removing the sole orphan exemption to obtain additional savings for patients and taxpayers and to eliminate any potential disincentive for developing additional indications for these drugs.
A Cost Model for a Low Threshold Clinic Treating Opioid Use Disorder
By: Sarah E. Wakeman, Elizabeth Powell, Syed Shehab, Grace Herman, Laura Kehoe and Robert S. Kaplan
- January 2024 |
- Article |
- Journal of Behavioral Health Services & Research
The US fee-for-service payment system under-reimburses clinics offering access to comprehensive treatments for opioid use disorder (OUD). The funding shortfall limits a clinic’s ability to expand and improve access, especially for socially marginalized patients with OUD. New payment models, however, should reflect the high variation in cost for using a clinic’s clinical and voluntary psychosocial and recovery support services. The authors applied time-driven activity-based costing to estimate the cost at an outpatient clinic that delivers medication for opiate use disorder (MOUD) and voluntary psychosocial and recovery support services. Much of the cost variation could be explained by classifying patients into three archetypes: (1) light touch (1–3 visits): no significant co-occurring psychiatric illness, stable housing, and easy to connect for ongoing OUD treatment in a traditional outpatient setting; (2) standard (average of 8 visits): initially requires an integrated team-based care model but soon stabilizes for transition to community-based outpatient care; (3) quad morbidity (> 20 visits): multiple co-occurring substance use disorders, unhoused, co-occurring medical and psychiatric complexity, and limited social supports. With the cost of the initial visit set at an indexed value of 100, an average light touch patient had a cost of 352, a standard patient was 718, and a quad morbidity patient was 1701. The cost structure revealed by this analysis provides the foundation for alternative payment models that would enable new MOUD clinics, staffed with multi-disciplinary care teams, and located for convenient access by high-risk patients, to be established and sustained.