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. Behavioral Hazard in Health Insurance

    Katherine Baicker, Sendhil Mullainathan and Joshua Schwartzstein

    A fundamental implication of standard moral hazard models is overuse of low-value medical care because copays are lower than costs. In these models, the demand curve alone can be used to make welfare statements, a fact relied on by much empirical work. There is ample evidence, though, that people misuse care for a different reason: mistakes or "behavioral hazard." Much high-value care is underused even when patient costs are low, and some useless care is bought even when patients face the full cost. In the presence of behavioral hazard, welfare calculations using only the demand curve can be off by orders of magnitude or even be the wrong sign. We derive optimal copay formulas that incorporate both moral and behavioral hazard, providing a theoretical foundation for value-based insurance design and a way to interpret behavioral "nudges." Once behavioral hazard is taken into account, health insurance can do more than just provide financial protection—it can also improve health care efficiency.

    Keywords: Insurance; Consumer Behavior; Health Care and Treatment; Insurance Industry;


    Baicker, Katherine, Sendhil Mullainathan, and Joshua Schwartzstein. "Behavioral Hazard in Health Insurance." Quarterly Journal of Economics 130, no. 4 (November 2015): 1623–1667. (Online Appendix.) View Details
  2. Emdeon's Acquisition of Change Healthcare: Innovating Transparency Solutions for Health Care Consumers

    Regina E. Herzlinger, Jeet Guram and Aanchal Raj

    Case describes acquisition of Change Healthcare, which provides health care cost and quality information, by Emdeon, a health information exchange, and discusses health care transparency. Emdeon is a billion-dollar company that has grown through acquisitions; at its core, it transmits health insurance claims and payments between providers and insurers. The health care marketplace is becoming increasingly electronic, but this move comes with risks. Increased consumerism in health care is creating a need for information on cost and quality. Change Healthcare responds to this need and markets primarily to health insurers. The company has unique ways to drive enrollee engagement. However, the transparency space is becoming competitive, with entrants from public and private sources. In this shifting environment, Emdeon must decide how best to integrate Change.

    Keywords: healthcare; healthcare industry; healthcare innovation; Health Care and Treatment; United States;


    Herzlinger, Regina E., Jeet Guram, and Aanchal Raj. "Emdeon's Acquisition of Change Healthcare: Innovating Transparency Solutions for Health Care Consumers." Harvard Business School Case 316-026, September 2015. View Details
  3. Blinded by Experience: Prior Experience, Negative News and Belief Updating

    Bradley R. Staats, Diwas S. KC and Francesca Gino

    Traditional models of operations management involve dynamic decision-making assuming optimal (Bayesian) updating. However, behavioral theory suggests that individuals exhibit bias in their beliefs and decisions. We conduct both a field study and two laboratory studies to examine the phenomena in the context of health. In particular, we examine how an individual's prior experiences and the experiences of those around them alter the operational decisions that the individual makes. We draw on an exogenous announcement of negative news by the Food and Drug Administration (FDA) and explore how this affects an operational decision—production tool choice—of interventional cardiologists deciding between two types of cardiac stents. Analyzing 147,000 choices over 6 years, we find that individuals do respond to negative news by using the focal production tool less often. However, we find that both individual's own experience and others' experience alter their responses in predictable ways. Moreover, although individual and other experience act as substitutes prior to negative news, the two types of experience act as complements following the negative announcement—leading to even greater use of the same production tool. Two controlled lab studies replicate our main findings and show that behavioral biases, not rational expectations, drive the effect. Our research contributes not only to operations management research, but also to the practice of healthcare and operations more generally.

    Keywords: behavioral operations; egocentric bias; experience; healthcare Operations; Prejudice and Bias; Behavior; Operations; Decision Making; Health Care and Treatment;


    Staats, Bradley R., Diwas S. KC, and Francesca Gino. "Blinded by Experience: Prior Experience, Negative News and Belief Updating." Harvard Business School Working Paper, No. 16-015, August 2015. View Details
  4. Hospital Board and Management Practices Are Strongly Related to Hospital Performance on Clinical Quality Metrics

    Thomas C Tsai, Ashish K. Jha, Atul A. Gawande, Robert S. Huckman, Nicholas Bloom and Raffaella Sadun

    National policies to improve health care quality have largely focused on clinical provider outcomes and, more recently, payment reform. Yet the association between hospital leadership and quality, although crucial to driving quality improvement, has not been explored in depth. We collected data from surveys of nationally representative groups of hospitals in the United States and England to examine the relationships among hospital boards, management practices of front-line managers, and the quality of care delivered. First, we found that hospitals with more effective management practices provided higher-quality care. Second, higher-rated hospital boards had superior performance by hospital management staff. Finally, we identified two signatures of high-performing hospital boards and management practice. Hospitals with boards that paid greater attention to clinical quality had management that better monitored quality performance. Similarly, we found that hospitals with boards that used clinical quality metrics more effectively had higher performance by hospital management staff on target setting and operations. These findings help increase understanding of the dynamics among boards, front-line management, and quality of care and could provide new targets for improving care delivery.

    Keywords: Quality; Governing and Advisory Boards; Management Practices and Processes; Service Delivery; Health Care and Treatment; Health Industry;


    Tsai, Thomas C., Ashish K. Jha, Atul A. Gawande, Robert S. Huckman, Nicholas Bloom, and Raffaella Sadun. "Hospital Board and Management Practices Are Strongly Related to Hospital Performance on Clinical Quality Metrics." Health Affairs 34, no. 8 (August 2015): 1304–1311. View Details
  5. The Crash and the Fix (A)

    Leonard A. Schlesinger and Paras D. Bhayani

    A review of the process utilized by the Obama administration to create the Health exchange and the problems that resulted from the implementation effort. There is a B case that provides the follow on strategy and processes utilized to get the site up and running after the initial failures of implementation.

    Keywords: Organizational change; Implementing strategy; Implementation; government innovation; health care industry; health care reform; Health Care and Treatment; Government Administration; Governing Rules, Regulations, and Reforms; Organizational Change and Adaptation; Health Industry; Information Technology Industry; United States;


    Schlesinger, Leonard A., and Paras D. Bhayani. " The Crash and the Fix (A)." Harvard Business School Case 315-129, June 2015. View Details
  6. Acıbadem Healthcare Group

    Regina E. Herzlinger, Esel Çekin, Natalie Kindred and Gamze Yucaoglu

    This case focuses on Acıbadem Healthcare Group's, Turkey's only premium nationwide hospital network, potential expansion strategies after it was acquired by International Healthcare Holdings Berhad (IHH) in 2011, the world's second-largest publicly listed health care group and a private hospital leader in Singapore and Malaysia. By providing perspectives on both Acıbadem and IHH-Parkway-Pantai's operational models, growth aspirations, collaboration and synergies, as well as cultural and operational differences, the case allows students to discuss which expansion strategies would be best suited for Acıbadem's operations—which geographic regions should initially be targeted, what business model is best suited for Acıbadem's growth (specialized chain, public-partnership etc.) Also, students are encouraged to discuss how Acıbadem should leverage its relationship with IHH and collaborate with Parkway-Pantai.

    Keywords: health care; Turkey; hospital; Health Care and Treatment; Health; Health Industry; Turkey;


    Herzlinger, Regina E., Esel Çekin, Natalie Kindred, and Gamze Yucaoglu. "Acıbadem Healthcare Group." Harvard Business School Case 315-120, May 2015. View Details
  7. Philips Healthcare: Marketing the HealthSuite Digital Platform

    John A. Quelch and Margaret L. Rodriguez

    In June 2014, leading healthcare and consumer technology company, Royal Philips ("Philips"), announced its HealthSuite Digital Platform to house healthcare data and enable applications used by physicians and patients. Philips had strong equity in the healthcare technology space, due to its extensive portfolio of medical devices and related software sold primarily to hospitals. Philips designed the first two apps for the platform (eCareCoordinator and eCareCompanion) in-house, but it planned to open it up to third-party developers who would create an array of health-focused apps. Healthcare had long lagged behind other industries in adoption of technology as well as patient-relationship management. However, many health players had recently increased investment in new infrastructure and data analytics. Would the new Philips HealthSuite Digital Platform find success in the rapidly evolving industry?

    Keywords: health; healthcare; digital; platform; ecosystem; Health Care and Treatment; Technological Innovation; Technology; Product Development; Health Industry; Medical Devices and Supplies Industry; Netherlands; United States;


    Quelch, John A., and Margaret L. Rodriguez. "Philips Healthcare: Marketing the HealthSuite Digital Platform." Harvard Business School Case 515-052, May 2015. (Revised September 2015.) View Details
  8. Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste

    John A. Quelch and Margaret L. Rodriguez

    In October 2013, Colgate-Palmolive Company, the world's leading oral care company, was about to launch its new Colgate® Maximum Cavity Protection™ plus Sugar Acid Neutralizer™ toothpaste in Brazil. Oral care category accounted for 46 percent of Colgate's $17.4 billion sales worldwide in 2013. The new toothpaste was clinically proven to reduce and prevent cavities more effectively than toothpaste with the same level of fluoride alone. All major industry players, including Procter & Gamble, GlaxoSmithKline and Colgate itself, had long ago launched products with the maximum amount of fluoride allowed by Health authorities. Yet cavities remained a significant threat to public health in many countries, both developing and developed. As Suzan Harrison, Colgate's president of Oral Care, prepared to launch CMCP+SAN in Brazil, the world's third largest oral care market, her executive team was divided over the product's positioning and pricing. Should it be positioned as a basic product to maximize reach for its health benefits or as a premium product for consumers who sought superior cavity protection?

    Keywords: marketing; new product management; Consumer segmentation; global marketing; corporate social responsibility; healthcare; sustainability; Health Care and Treatment; Environmental Sustainability; Marketing; Segmentation; Product Development; Product Launch; Corporate Social Responsibility and Impact; Consumer Products Industry; Brazil; United States;


    Quelch, John A., and Margaret L. Rodriguez. "Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste." Harvard Business School Case 515-050, May 2015. (Revised September 2015.) View Details
  9. Medicine's Continuous Improvement Imperative

    Robert S. Huckman and Ananth Raman

    Maintaining quality and spurring innovation have long been central objectives of the US health care system. Like other health care professionals, physicians are challenged to minimize the likelihood of errors that could harm patients while simultaneously making efforts to understand the causes of illnesses and develop better ways to prevent, treat, and cure them.

    Keywords: medicine; continuous improvement; Toyota production system; Alcoa; Health Care and Treatment; Performance Improvement; Health Industry;


    Huckman, Robert S., and Ananth Raman. "Medicine's Continuous Improvement Imperative." JAMA, the Journal of the American Medical Association 313, no. 18 (May 12, 2015): 1811–1812. View Details
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