How Not to Cut Health Care Costs

“Health care provider organizations also try to optimize the number and mix of patients seen—for instance, by pushing physicians to spend less time with each patient and on treatment processes that are poorly reimbursed under fee-for-service mechanisms. Fee-for-service payments encourage physicians to increase their volume of reimbursable procedures and visits, not to deliver effective and efficient care for a patient’s condition. To make matters worse, clinical personnel—the people who actually treat patients—are seldom involved in decisions about how to achieve savings, which means that providers lose out on significant opportunities for benchmarking and standardizing medical practices in ways that could both lower costs and improve care. Field research we are conducting with more than 50 health care provider organizations, most U.S.-based, suggests much better ways to reduce costs without jeopardizing care and often while improving outcomes.”

Robert S. Kaplan and Derek A. Haas

Harvard Business Review

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