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.)

This video series, which is intended to be used with C3: Driven to Succeed (119-004), shows founder and CEO Tom Siebel addressing a class of MBA students. In eight short video clips, he discusses how he selects customers and employees, creates a high-energy culture, and builds accountability for results.

Objectives: To apply time-driven activity-based costing (TDABC) methodology to determine emergency medicine physician documentation costs with and without scribes.

Methods: Two research assistants shadowed attending physicians for a total of 64 hours in the adult emergency department. A tablet-based time recorded was used to obtain estimates for physician documentation time on both control (no scribe) and intervention (scribe) shifts.

Results: Control shifts yielded approximately 3 hours of documentation time per 8 hours of clinical time. When paired with a scribe, attending physician documentation decreased to 1 hour and 45 minutes during a shift and 15 minutes of post-shift documentation. The physician cost estimate for documentation without and with a scribe is 644 and 488 dollars, respectively.

Conclusions: TDABC methodology demonstrated that scribes afford a cost-effective solution to ED clinical documentation. The costing approach enables clinicians to understand utilization and cost of medical resource at a more granular level.

Module Note | October 2016 (Revised February 2019)

Strategy Execution Module 5: Building a Profit Plan

Robert Simons

This module reading describes how to build a profit plan to reflect the strategy of a business in economic terms. After introducing the profit wheel, cash wheel, and ROE wheel, the module illustrates how to use a profit plan to assess the viability of different strategies and evaluate whether sufficient resources will be available to implement the chosen strategy. The module examines in detail how to develop accurate estimates for sales, profit, cash flow, asset turnover, investment in new assets, and return on equity. The discussion then turns to how to gather and analyze data and the effects of sensitivity analysis on predictions. The module concludes by illustrating the critical role of a profit plan in setting goals, communicating expectations to the investment community, and evaluating the performance of individual managers and businesses. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies.

Keywords: Management Control Systems; Implementing strategy; Execution; profit planning; cash flow analysis; Asset utilization; return on equity; Business planning; Testing strategy; Analyzing strategic alternative; Strategy; Asset Management; Cash Flow; Investment Return; Management Systems; Profit;

Citation:

Simons, Robert. "Strategy Execution Module 5: Building a Profit Plan." Harvard Business School Module Note 117-105, October 2016. (Revised February 2019.) View Details

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My Favorite Slide: The Entrepreneurial Gap Applied to Health Care

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