Health Care

Health Care is a featured research topic and an initiative at Harvard Business School.
 
Over the past several decades, HBS has built a foundation in health care research, from Clayton Christensen's application of disruptive innovations and Regina Herzlinger's concept of consumer-driven health care to Michael Porter's use of competitive strategy principles. Today our research focuses on 
  • how management principles and best practices from other industries can be applied;
  • how the process of innovation can be improved;
  • how principles of strategy and consumer choice can be utilized;
  • how information technology can expand access, decrease costs, and improve quality;
  • how new approaches in developing nations can impact global health.

Featured Works

 

  1. Case | HBS Case Collection | January 2020

    Celata Bioinnovations

    John R. Wells and Benjamin Weinstock

    In December 2019, Jon Hu (Harvard Business School MBA, 2019) and Dr. Samantha Dale Strasser, co-founders of Celata Bioinnovations, were raising $1 million to launch their company. They had founded Celata less than six months earlier with the aim of redefining the drug discovery process. Celata’s platform used novel data types and a unique data integration process to generate hypotheses about proteins that were involved in the formation and progression of disease. They believed the platform was better and faster at identifying actionable biological targets, increasing the speed of discovery and reducing the chances of failure, promising to lower costs and bring drugs to market more quickly. Their platform had achieved proof of concept during Strasser’s PhD research at Massachusetts Institute of Technology (MIT), when it helped identify and validate a target related to Inflammatory Bowel Disease (IBD) in mouse models. However, full validation wouldn’t come until their platform was used to develop a drug that successfully treated a disease in humans, a process that could take several years.
    In the first instance, Celata’s platform was best suited to identify targets for cancers, inflammatory diseases, and neurodegenerative diseases, which collectively presented a global market opportunity of over $200 billion. However, Hu and Strasser were debating which opportunities to pursue. Should they try to improve the efficacy of current drugs, or go for brand new opportunities, indications for which there were no solutions on the market? And if they focused on the latter, should they just look for large market opportunities, or include “orphan” diseases, for which there was a relatively small market? Should they look for small molecule drug candidates, or include large molecule biologics in their search? And where should they operate in the drug development pipeline? At one extreme, they could sell potential drug candidates to established pharmaceutical companies; at the other, they could “go full pharma” and build a new pharmaceutical company themselves.

    Keywords: drug development; drug discovery; Drug Trials; Pharmaceutical Companies; Pharmaceutical Company; Pharmaceuticals; therapeutics; Biologics; biotech; biotechnology; biopharmacy company; biochemistry; technology commercialization; technology companies; Drug Testing; Startup; start-up; Startups; start-ups; Startup financing; strategic decision making; strategic decisions; strategic evolution; FDA; Food and Drug Administration; clinical trials; disease management; market attractiveness; Market entry; market opportunities; Health Disorders; Technological Innovation; Technology; Commercialization; Business Startups; Finance; Decision Making; Strategy; Market Entry and Exit; Opportunities; Pharmaceutical Industry; Biotechnology Industry;

    Citation:

    Wells, John R., and Benjamin Weinstock. "Celata Bioinnovations." Harvard Business School Case 720-427, January 2020.  View Details
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  2. Article | New England Journal of Medicine | January 2, 2020

    Changes in Quality of Care After Hospital Mergers and Acquisitions

    Nancy Dean Beaulieu, Leemore S. Dafny, B. E. Landon, Jesse Dalton, Ifedayo Kuye and J. Michael McWilliams

    Background: The hospital industry has consolidated substantially during the past two decades and at an accelerated pace since 2010. Multiple studies have shown that hospital mergers have led to higher prices for commercially insured patients, but research about effects on quality of care is limited.
    Methods: Using Medicare claims and Hospital Compare data from 2007 through 2016 on performance on four measures of quality of care (a composite of clinical-process measures, a composite of patient-experience measures, mortality, and the rate of readmission after discharge) and data on hospital mergers and acquisitions occurring from 2009 through 2013, we conducted difference-in-differences analyses comparing changes in the performance of acquired hospitals from the time before acquisition to the time after acquisition with concurrent changes for control hospitals that did not have a change in ownership.
    Results: The study sample included 246 acquired hospitals and 1986 control hospitals. Being acquired was associated with a modest differential decline in performance on the patient-experience measure (adjusted differential change, −0.17 SD; 95% confidence interval [CI], −0.26 to −0.07; P=0.002; the change was analogous to a fall from the 50th to the 41st percentile) and no significant differential change in 30-day readmission rates (−0.10 percentage points; 95% CI, −0.53 to 0.34; P=0.72) or in 30-day mortality (−0.03 percentage points; 95% CI, −0.20 to 0.14; P=0.72). Acquired hospitals had a significant differential improvement in performance on the clinical-process measure (0.22 SD; 95% CI, 0.05 to 0.38; P=0.03), but this could not be attributed conclusively to a change in ownership because differential improvement occurred before acquisition.
    Conclusions: Hospital acquisition by another hospital or hospital system was associated with modestly worse patient experiences and no significant changes in readmission or mortality rates. Effects on process measures of quality were inconclusive. (Funded by the Agency for Healthcare Research and Quality.)

    Keywords: Hospitals; Mergers and Acquisitions; Health Care and Treatment; Quality;

    Citation:

    Beaulieu, Nancy Dean, Leemore S. Dafny, B. E. Landon, Jesse Dalton, Ifedayo Kuye, and J. Michael McWilliams. "Changes in Quality of Care After Hospital Mergers and Acquisitions." New England Journal of Medicine 382, no. 1 (January 2, 2020): 51–59.  View Details
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  3. Article | Journal of Medical Systems | January 2020

    Using Time-Driven Activity-Based Costing to Demonstrate Value in Perioperative Care: Recommendations and Review from the Society for Perioperative Assessment and Quality Improvement

    O. Allin, RD Urman, AF Edwards, JD Blitz, KJ Pfeifer, TW Feeley and AM Bader

    A shift in health care payment models from volume toward value-based incentives will require deliberate input into systems development from both perioperative clinicians and administrators to ensure appropriate recognition of the value of all services provided—particularly ones that are not reimbursable in current fee-for-service payment models. Time-driven activity-based costing (TDABC) methodology identifies cost drivers and reduces inaccurate costing based on siloed budgets. Inaccurate costing also results from the fact that current costing methods use charges and there has been tremendous cost shifting throughout health care. High cost, high variability processes can be identified for process improvement. As payment models inevitably evolve towards value-based metrics, it will be critical to knowledgably participate in the coordination of these changes. This document provides eight practical recommendations from the Society for Perioperative Assessment and Quality Improvement (SPAQI) aimed at outlining the principles of TDABC, creating process maps for patient workflows, understanding payment structures, establishing physician alignment across service lines to create integrated practice units to facilitate development of evidence-based pathways for specific patient risk groups, establishing consistent care delivery, minimizing variability between physicians and departments, utilizing data analytics and information technology tools to track progress and obtain actionable data, and using TDABC to create costing transparency.

    Keywords: value-based health care; outcomes; Time-Driven Activity-Based Costing; Health Care and Treatment; Cost Management; Value; Activity Based Costing and Management;

    Citation:

    Allin, O., RD Urman, AF Edwards, JD Blitz, KJ Pfeifer, TW Feeley, and AM Bader. "Using Time-Driven Activity-Based Costing to Demonstrate Value in Perioperative Care: Recommendations and Review from the Society for Perioperative Assessment and Quality Improvement." Journal of Medical Systems 44, no. 1 (January 2020).  View Details
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  4. Case | HBS Case Collection | November 2019 (Revised December 2019)

    Martini Klinik: Prostate Cancer Care 2019

    Michael E. Porter, Jens Deerberg-Wittram and Thomas W. Feeley

    Since its establishment in 2005, Hamburg’s Martini Klinik had single mindedly focused on prostate cancer care with a commitment to measure long-term health outcomes for every patient. A wholly owned subsidiary of the University Hospital Hamburg, Martini Klinik was a “hospital in a hospital” in close proximity to other medical departments and services. By 2019, Martini Klinik had become the largest prostate cancer treatment program in the world with 8,000 outpatient cases and more than 2,500 surgical cases annually. Patients came from all over Germany and from around the world. A new and expanded facility was under construction to have the capacity to manage more patients with prostate cancer.

    Keywords: health care; Michael Porter; Jens Deerberg-Wittram; Clifford Marks; prostate cancer; health care policy; value agenda; integrated practice units; outcomes measurement; Health Care and Treatment; Value; Health Disorders; Insurance; Medical Specialties; Outcome or Result; Measurement and Metrics; Business Processes; Insurance Industry; Health Industry; Germany;

    Citation:

    Porter, Michael E., Jens Deerberg-Wittram, and Thomas W. Feeley. "Martini Klinik: Prostate Cancer Care 2019." Harvard Business School Case 720-359, November 2019. (Revised December 2019.)  View Details
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  5. Article | Health Management, Policy and Innovation | 2019

    Mandate Outcomes Reporting

    Robert S. Kaplan and Michael E. Porter

    Currently, few health care providers measure and report their patient outcomes, which leads to several problems. Attempts to introduce price transparency without outcomes transparency could trigger a “race to the bottom.” Should Medicare coverage be expanded to non-elderly populations, its much lower reimbursements will create pressure on providers to lower their spending in ways that produce even worse outcomes. Even without Medicare expansion, the lack of systematic outcomes measurement has made the migration from fee-for-service to value-based reimbursements, especially bundled payments, less effective and more difficult to implement. Hidden variation in outcomes prevents providers from learning from others how to produce better outcomes for their patients. We propose that the Congress elected in November 2020 mandate the Centers for Medicare and Medicaid Services to begin requiring outcomes measurement by all providers reimbursed under government Medicare and Medicaid programs.

    Keywords: outcomes reporting; outcomes measurement; Medicare; Medicaid; Health Care and Treatment; Outcome or Result; Measurement and Metrics;

    Citation:

    Kaplan, Robert S., and Michael E. Porter. "Mandate Outcomes Reporting." Health Management, Policy and Innovation 4, no. 3 (2019).  View Details
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  6. Article | Annals of the American Academy of Political and Social Science

    Economic Principles for Medicare Reform

    Amitabh Chandra and Craig Garthwaite

    In this article, we develop an economic framework for Medicare reform that highlights trade-offs that reform proposals should grapple with but often ignore. Central to our argument is a tension in administratively set prices, which may improve short-term efficiency but do so at the expense of dynamic efficiency (slowing innovations in new treatments). The smaller the Medicare program is relative to the commercial market, the less important this is; but in a world where there are no market prices or the private sector is very small, the task of setting prices that are dynamically correct becomes more complex. Reforming Medicare should focus on greater incentives to increase competition between Medicare Advantage plans, which necessitates a role for government in ensuring competition; premium support; less use of regulated prices; and less appetite for countless “pay for performance” schemes. We apply this framework to evaluate Medicare for All proposals.

    Keywords: Medicare; value-based care; health care reform; markets in health care; Health Care and Treatment; Value; Governing Rules, Regulations, and Reforms;

    Citation:

    Chandra, Amitabh, and Craig Garthwaite. "Economic Principles for Medicare Reform." Annals of the American Academy of Political and Social Science 686, no. 1 (November 2019): 63 – 92.  View Details
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  7. Article | Harvard Business Review (website) | November 19, 2019

    The Unexpected Benefits of Pursuing a Passion Outside of Work

    Jon M. Jachimowicz, Joyce He and Julian Arango

    We are often told to pursue work we’re passionate about. But, for many people, this simply isn’t feasible. Not every job affords the possibility of doing what you love. And people care deeply about many different things—not all of which will be how they want to earn a living. A growing body of research suggests that pursuing your passion does indeed improve well-being, but that where you do it is far less critical. In fact, several studies show that people who find joy in non-professional activities see benefits in both their careers and personal lives.

    Keywords: passion; work; Health; Welfare or Wellbeing; Satisfaction;

    Citation:

    Jachimowicz, Jon M., Joyce He, and Julian Arango. "The Unexpected Benefits of Pursuing a Passion Outside of Work." Harvard Business Review (website) (November 19, 2019).  View Details
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  8. Article | Journal of Bone and Joint Surgery Reviews | November 2019

    A Review of Bundled Payments in Total Joint Replacement

    Olivia Manickas-Hill, Kevin J. Bozic and Thomas W. Feeley

    The Bundled Payments for Care Improvement (BPCI) initiative, developed by the U.S. Center for Medicare & Medicaid Innovation, aims to reduce health care expenditures while maintaining or improving patient outcomes.
    Several published reports evaluating the impact of the BPCI on payment, utilization, and patient outcomes during the first three years of the initiative demonstrated a reduction in Medicare payments for major joint replacement of the lower extremity, driven primarily by a reduction in post-acute care utilization, without a sacrifice in quality of care as measured by no change in unplanned readmission rate, emergency department use, or mortality rate during the 90 days from episode start date. However, this reduction in Medicare payments did not translate into savings to the Medicare program, as the Net Payment Reconciliation Amount (NPRA) to providers was not included in any of the cost analyses.
    The impact of the BPCI on outcomes important to patients and physicians has not been thoroughly evaluated in the published literature. Important (and standardly trackable) outcome measures that can be considered when assessing the effectiveness of a health care model for bundled payments for total joint replacement include 30-day postoperative mortality, reoperation, and readmission; hip or knee functional status; hip, knee, or lower back pain; quality of life; work status; and satisfaction with results. Many studies directly evaluated only survival and disutility as manifested by readmission rate and emergency department use.
    Multiple pilot studies evaluating cost savings and quality measures using a bundled payment alternative payment model have demonstrated a reduction in Medicare episode payments, primarily related to decreased length of hospital stay and post-acute care utilization.
    Readmission, certain comorbidities, and low socioeconomic status are associated with higher episode costs.
    An evaluation of a bundled payment program for orthopaedic procedures in Stockholm, Sweden, revealed a decrease in cost, complication rate, and wait time after the introduction of a bundled payment system. Some of these improvements may be related to an increase in the number of surgical procedures on younger, healthier patients performed at specialized orthopaedic centers, with a concomitant shift of patients with comorbidities to hospitals.

    Keywords: bundled payments; Health Care and Treatment; Cost Management;

    Citation:

    Manickas-Hill, Olivia, Kevin J. Bozic, and Thomas W. Feeley. "A Review of Bundled Payments in Total Joint Replacement." Journal of Bone and Joint Surgery Reviews 7, no. 11 (November 2019).  View Details
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  10. Case | HBS Case Collection | October 2019

    GRIT Fitness

    Lynda M. Applegate and Olivia Hull

    In December 2018, GRIT Fitness was a growing chain of boutique fitness studios offering a variety of workout classes, including weightlifting, high intensity interval training, and cardio dance. With 400 members and three Dallas studios, CEO Brittani Rettig believed her business had found a niche in a crowded industry by promoting female empowerment and psychological resilience through fitness. Rettig wanted to extend GRIT’s reach to impact more women. What was the best path to growth?

    Keywords: Entrepreneurship; Business Startups; Mission and Purpose; Corporate Strategy; Customer Focus and Relationships; Forecasting and Prediction; Business Plan; Trends; Experience and Expertise; Talent and Talent Management; Training; Health; Selection and Staffing; Leadership Style; Leadership Development; Management Style; Management Teams; Brands and Branding; Organizational Culture; Organizational Structure; Motivation and Incentives; Sports; Competition; Diversification; Expansion; Value Creation; Health Industry; Sports Industry; Texas;

    Citation:

    Applegate, Lynda M., and Olivia Hull. "GRIT Fitness." Harvard Business School Case 820-016, October 2019.  View Details
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    11.  
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Initiatives & Projects

  • Health Care

    The Health Care Initiative serves as a gateway for health care research, educational programs, and collaboration across all sectors of the health care industry.

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    The Social Enterprise Initiative at HBS applies innovative business practices and managerial disciplines to drive sustained, high-impact social change.

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Faculty

HBS Working Knowledge

Pic
re Regina E. Herzlinger
A public insurance option could use its scale to hold prices down, but only if the approach avoids the financing gimmicks that are undermining Medicare, say Regina E. Herzlinger and James Wallace.
Pic
re Rembrand M. Koning
Does the gender of inventors make a difference for who benefits from their inventions? Analysis of all U.S. biomedical patents issued between 1976 and 2010 shows that research teams with women were m
Pic
re Ariel D. Stern
In Germany, drugmakers must prove that a new medication’s benefits merit a higher price than existing drugs. Ariel Dora Stern asks whether "value-based pricing" should become the standard elsewhere.

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Harvard Business Publishing

Article
by Nitin Nohria
Case
by Michael E. Porter, Jens Deerberg-Wittram and Thomas W. Feeley

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