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  • September 2011
  • Article
  • Harvard Business Review

How to Solve the Cost Crisis in Health Care

By: Robert S. Kaplan and Michael E. Porter
  • Format:Print
  • | Pages:18
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Abstract

Existing health care costing systems have serious flaws that make it impossible to measure costs accurately at the individual patient and medical condition level. This gap has severely limited meaningful cost reduction throughout the system. The paper describes a new (for health care) approach that can accurately measure the costs incurred over the care cycle for a patient's condition. Combining this cost information along with the patient outcomes achieved reveals major opportunities for health care providers and third-party payers to transform the economics of delivering health care. We illustrate multiple ways for providers to drive costs out of the system while simultaneously improving the quality of care they deliver.

Keywords

Cost; Health Care and Treatment; Measurement and Metrics; Service Delivery; Outcome or Result; Quality; Health Industry

Citation

Kaplan, Robert S., and Michael E. Porter. "How to Solve the Cost Crisis in Health Care." Harvard Business Review 89, no. 9 (September 2011): 47–64.
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About The Authors

Robert S. Kaplan

Accounting and Management
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Michael E. Porter

Strategy
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More from the Authors

    • 2023
    • BMC Health Services Research

    Comparison of COVID-19 Hospitalization Costs across Care Pathways: A Patient-level Time-driven Activity-based Costing Analysis in a Brazilian Hospital

    By: Ricardo Bertoglio Cardoso, Miriam Allein Zago Marcolino, Milena Soriano Marcolino, Camila Felix Fortis, Leila Beltrami Moreira, Ana Paula Coutinho, Nadine Oliveira Clausell, Junaid Nabi, Robert S. Kaplan, Ana Paula Beck da Silva Etges and Carisi Anne Polanczyk
    • 2023
    • Faculty Research

    Accounting for Carbon Offsets – Establishing the Foundation for Carbon-Trading Markets

    By: Robert S. Kaplan, Karthik Ramanna and Marc Roston
    • February 2023
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    Dr. Andrea Pusic, Video Supplement

    By: Robert S. Kaplan
More from the Authors
  • Comparison of COVID-19 Hospitalization Costs across Care Pathways: A Patient-level Time-driven Activity-based Costing Analysis in a Brazilian Hospital By: Ricardo Bertoglio Cardoso, Miriam Allein Zago Marcolino, Milena Soriano Marcolino, Camila Felix Fortis, Leila Beltrami Moreira, Ana Paula Coutinho, Nadine Oliveira Clausell, Junaid Nabi, Robert S. Kaplan, Ana Paula Beck da Silva Etges and Carisi Anne Polanczyk
  • Accounting for Carbon Offsets – Establishing the Foundation for Carbon-Trading Markets By: Robert S. Kaplan, Karthik Ramanna and Marc Roston
  • Dr. Andrea Pusic, Video Supplement By: Robert S. Kaplan
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