Health Care Providers Need a Value Management Office

Robert S. Kaplan; Catherine H. MacLean; Alexander  Dresner; Derek A. Haas; Thomas W. Feeley

Article | Harvard Business Review (website)

Health Care Providers Need a Value Management Office

by Robert S. Kaplan, Catherine H. MacLean, Alexander Dresner, Derek A. Haas and Thomas W. Feeley

Abstract

Many health care organizations are striving to implement a value agenda that delivers better patient outcomes at lower cost, medical condition by medical condition. To accelerate the dissemination and adoption of the value agenda, across many more medical conditions, leading institutions, such as MD Anderson Cancer Center and the Hospital for Special Surgery, have established a new central office to oversee the creation of all the capabilities and information for measuring and improving outcomes and cost, setting priorities for continuous improvement projects, facilitating the creation of value-based payment models with insurers and employers, and ensuring that new information technology platforms are aligned with the value agenda.

Keywords: Service Delivery; Value; Health Care and Treatment; Health Industry;

Format: Electronic

Citation:

Kaplan, Robert S., Catherine H. MacLean, Alexander Dresner, Derek A. Haas, and Thomas W. Feeley. "Health Care Providers Need a Value Management Office." Harvard Business Review (website) (December 2, 2015). (Part of the “Leading Change in Health Care” series, a collaboration of the editors of Harvard Business Review and NEJM Group.)

Many companies are now attempting to achieve triple bottom line performance on financial, environmental, and societal metrics. Successful strategies for such performance, however, generally require new relationships among multiple players in multiple sectors across a company’s supply chain for products and talent. The Balanced Scorecard (BSC), originally developed to describe and implement a single organization’s strategy, needs to be adapted to reflect such multi-stakeholder strategies for triple bottom line performance. The Financial perspective is replaced by “Outcomes” to encompass financial, environmental, and societal metrics; Customer becomes “Stakeholders” to reflect the interests of the multiple participants in the ecosystem; and Learning & Growth becomes “Enablers” to include the new capabilities for collaboration and alignment. The paper motivates and illustrates the new framework with examples from innovative agribusiness ecosystems.

Based in Cairo, Afreximbank was founded in October 1993 as a specialized continental financial institution designed to address the low level of intra-African trade, the decline in financial flows to Africa, the worsening external debt situation of many African countries, and the sharp reduction in lending to Africa by international commercial banks. This case study explores how the Bank introduced the Balanced Scorecard (BSC) to improve the Bank’s performance management system. The goal was to transform the Bank’s bureaucratic culture and processes into one more attuned to the fast-paced and dramatic changes happening in Africa. The case examines how the BSC is being used to implement the Bank’s strategy and the issues arising from its implementation. The case facilitates a discussion on whether the Bank had become entrepreneurial enough to keep pace with the continent’s thriving, emerging markets.

Leaders at six hospitals conducted a research study to assess and compare the health outcomes and costs of pediatric aerodigestive care. Four of the hospitals delivered care with an integrated practice unit (IPU) while two delivered care traditionally, with isolated specialists. The study used time-driven activity-based costing as a tool to measure and compare costs across the six sites. The results demonstrate that the four IPU sites improved clinical outcomes and had lower costs of care.

Faculty & Research

Health Care Providers Need a Value Management Office

Abstract

Citation:

About the Authors

More from these Authors