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• Case | HBS Case Collection | October 2016 (Revised March 2019)

  Carrum Health: Scaling Bundled Payments

  Robert S. Huckman and Sarah Mehta

  Founded in 2014, Carrum Health helped self-insured employers located in three markets (San Diego, California; Seattle, Washington; and San Francisco, California) save money on their employees’ planned surgeries. It did so by contracting directly with top-quality hospitals located within the area, and negotiating a set fee (known as a bundled payment) for each of five common surgical procedures: knee replacement, hip replacement, cervical spinal fusion, lumbar spinal fusion, and coronary bypass. By 2016, the company was growing steadily and saving its clients over 40% on average on these five procedures.
  In September 2016, Sachin Jain, Carrum’s CEO, received an email from North Beach Apparel, a large retailer based in San Francisco with a growing presence near Chicago, Illinois and Columbus, Ohio. North Beach was ready to partner with Carrum, but the terms of the deal required Carrum to enter the Chicago and Columbus markets in order to serve all North Beach employees. The deal would significantly increase Carrum’s revenue and begin to move the entrepreneurial venture closer to profitability. However, by expanding to Chicago and Columbus, the young company ran the risk of spreading itself too thin, especially given the opportunity for growth in Carrum’s current three markets. But Jain knew that if he waited too long to expand geographically, Carrum might lose its first-mover advantage in several markets. With limited resources, Jain needed to decide how to scale his young company: should Carrum enter the Chicago and Columbus markets with a guaranteed initial client base and then focus on selling the existing five bundles to new customers there; or, should the company add new bundles to its product line through the existing provider networks in the three markets it currently served?

  Keywords: health financing; health insurance; value-based healthcare reimbursements; bundled payments; innovation; Scale; Health; Health Care and Treatment; Cost Management; Growth and Development Strategy; Decision Choices and Conditions; Health Industry; California; San Francisco; San Diego; Seattle;

  Citation:

  Huckman, Robert S., and Sarah Mehta. "Carrum Health: Scaling Bundled Payments." Harvard Business School Case 617-017, October 2016. (Revised March 2019.)  View Details

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• Case | HBS Case Collection | October 2018

  The Brigham and Women's Hospital Innovation Hub: Driving Internal Innovation

  Ariel D. Stern and Robert S. Huckman

  Citation:

  Stern, Ariel D., and Robert S. Huckman. "The Brigham and Women's Hospital Innovation Hub: Driving Internal Innovation." Harvard Business School Case 619-026, October 2018.  View Details

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• Article | Management Science | September 2018

  Discretionary Task Ordering: Queue Management in Radiological Services

  Maria Ibanez, Jonathan R. Clark, Robert S. Huckman and Bradley R. Staats

  Work-scheduling research typically prescribes task sequences implemented by managers. Yet employees often have discretion to deviate from their prescribed sequence. Using data from 2.4 million radiological diagnoses, we find that doctors prioritize similar tasks (batching) and those tasks they expect to complete faster (shortest expected processing time). Moreover, they exercise more discretion as they accumulate experience. Exploiting random assignment of tasks to doctors’ queues, instrumental variable models reveal that these deviations erode productivity. This productivity decline lessens as doctors learn from experience. Prioritizing the shortest tasks is particularly detrimental to productivity. Actively grouping similar tasks also reduces productivity, in stark contrast to productivity gains from exogenous grouping, indicating deviation costs outweigh benefits from repetition. By analyzing task completion times, our work highlights the tradeoffs between the time required to exercise discretion and the potential gains from doing so, which has implications for how discretion over scheduling should be delegated.

  Keywords: discretion; scheduling; queue; healthcare; learning; experience; Decentralization; operations; service operations; service delivery; Performance; Performance Effectiveness; Performance Efficiency; Performance improvement; Performance Productivity; Decisions; time management; Cost vs Benefits; Health Industry; Operations; Service Operations; Service Delivery; Performance; Performance Effectiveness; Performance Efficiency; Performance Improvement; Performance Productivity; Decisions; Time Management; Cost vs Benefits; Health Industry;

  Citation:

  Ibanez, Maria, Jonathan R. Clark, Robert S. Huckman, and Bradley R. Staats. "Discretionary Task Ordering: Queue Management in Radiological Services." Management Science 64, no. 9 (September 2018): 4389–4407. (Working paper available here. Winner of the 2017 Best Paper Competition of the POMS College of Healthcare Operations Management. Featured in Forbes, Quartz, and Inc.)  View Details

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