My Favorite Slide: The Entrepreneurial Gap Applied to Health Care

Robert S. Kaplan; Robert  Simons

My Favorite Slide: The Entrepreneurial Gap Applied to Health Care

Abstract

Value-based health care increases physicians’ accountability for patient outcomes. Many have resisted, claiming that patient outcomes are influenced by many forces outside their control, such as patient’s compliance with post-acute and rehab care. The difference between accountability and control is an “entrepreneurial gap,” evoking the HBS definition of entrepreneurs as those who pursue opportunities—internally and externally—without regard to the resources they currently control. The creative tension generated by the entrepreneurial gap of holding physicians responsible for patient outcomes, motivates more integrated patient care that delivers superior patient outcomes at a lower total cost.

Keywords: Health Care and Treatment; Outcome or Result; Motivation and Incentives;

Format: Electronic

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Citation:

Kaplan, Robert S., and Robert Simons. "My Favorite Slide: The Entrepreneurial Gap Applied to Health Care." NEJM Catalyst (March 8, 2017). (Blog Post.)

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.

Value-based care models are becoming instrumental in structuring clinical care delivery in our healthcare climate. Our objective was to determine the value associated with implementation of a Family-Centered Care Coordination (FCCC) program for neonates undergoing tracheostomy.

Article | American Heart Journal

Are Cost Advantages from a Modern Indian Hospital Transferable to the United States?

R. S. Kaplan, F. Erhun, V.G. Narayanan, B. Mistry and K. Brayton, et al

We use time-driven activity-based costing to estimate the cost of personnel and space for an elective coronary artery bypass graft (CABG) surgery at two U.S. hospitals, Intermountain and Baylor Heart, and Narayana Health (NH), in India. All three hospitals use modern management methods to achieve excellent patient outcomes. We use variance analysis to remove the effect of differential prices paid for personnel and space at the three hospitals. NH, even at U.S. price levels, retains a cost advantage over the two U.S. hospitals by shifting tasks to less-credentialed and/or less-experienced personnel, supervised by highly-skilled personnel, a practice facilitated by NH’s high annual CABG volume. NH offsets some of its task downshifting cost savings by having lower-skilled employees spend more time counseling patients and their families for in-hospital and home recovery. NH’s cost-saving practices could be captured by U.S. hospitals by relaxing hospital and health professional licensing regulations, encouraging greater family participation in inpatient care, and performing complex surgeries in high-volume regional centers of excellence.

Keywords: Time-Driven Activity-Based Costing; Health Care and Treatment; Cost; Organizational Structure; Performance Efficiency; India; United States;

Citation:

Kaplan, R. S., F. Erhun, V.G. Narayanan, B. Mistry, and K. Brayton, et al. "Are Cost Advantages from a Modern Indian Hospital Transferable to the United States?" American Heart Journal 224 (June 2020): 148–155. View Details

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My Favorite Slide: The Entrepreneurial Gap Applied to Health Care

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