Harvard Business School

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Harvard Profs On ‘Previously Hidden Secret’ For Solving Health Cost Crisis

What’s the opposite of transparent? Opaque? But that doesn’t seem to go far enough to capture just how un-transparent health care costs are. Black-box-like? Impenetrable?

Anyway, a major article in this month’s Harvard Business Review — here — begins by describing just how little even doctors and their managers know about how much things really cost. Then Harvard Business School professors Robert S. Kaplan and Michael E. Porter put forward their proposed solution: “Time-Driven, Activity-Based Costing,” a way of figuring out how much each piece of medical care costs by multiplying the time it consumes by the cost of the person performing it. (Not to over-simplify — that’s just the primitive level at which I understand it.)

They conclude: “We are struck by the sheer size of the opportunity to reduce the cost of health care delivery with no sacrifice in outcomes. Accurate measurement of costs and outcomes is the previously hidden secret for solving the health care cost crisis.”

Wow, quite a claim. A lively discussion follows, but the commenters don’t challenge it. Do you?

Must-Read: Harvard Business Guru’s Own Diabetes, Cancer, Stroke Shape His Views

Forbes Magazine has just posted here a deeply personal, multi-faceted feature on Clayton Christensen, the renowned Harvard Business School professor and co-author of “The Innovator’s Prescription,” a 2009 book on what is wrong with the health care system and how to fix it.

The Forbes piece includes his own struggles with diabetes, cancer and a recent stroke, as well as the deep religious beliefs that permeate his life. Accordiing to Forbes writer David Whelan:

Christensen’s work took on new urgency the past few years as he suffered a heart attack followed by cancer followed by a stroke. For Christensen it was not a reason to get too upset. It was another opportunity, in a lifetime full of them, to gain insight into how to make the world work better. Because of his July stroke it took a long time for Christensen to be ready to sit down with FORBES. He was in intensive speech therapy, eight hours a day at the beginning. But he graciously agreed to tell his inspiring story in January, the same month he went back to teaching.