Health →
- 07 May 2009
- Working Paper Summaries
Broadening Focus: Spillovers and the Benefits of Specialization in the Hospital Industry
What is the optimal scope of operations for firms? This question has particular relevance for the US hospital industry, because understanding the effects of focus and spillovers might help hospitals determine how they should balance focusing in a single clinical area with building expertise in related areas. While some scholars argue that narrowing an organization's set of activities improves its operational efficiency, others have noted that seemingly unfocused operations perform at a high level and that a broader range of activities may in fact increase firm value. This study by HBS doctoral student Jonathan Clark and professor Robert Huckman highlights the potential role of spillovers—specifically complementary spillovers—in generating benefits from focus at the operating unit level. Key concepts include: Hospitals devoting a greater portion of their business to treating patients in related service categories (i.e., those with the potential for knowledge spillovers) experience higher returns to specialization in a focal service. Ultimately, these results provide a potential explanation for why there might be decreasing returns to focusing an organization on a single operating activity (or narrow set of activities), especially when it is possible to invest in other activities that complement the organization's area of concentration. Closed for comment; 0 Comments.
- 22 Apr 2009
- Working Paper Summaries
Where is the Pharmacy to the World? International Regulatory Variation and Pharmaceutical Industry Location
The era of paternalistic medicine has passed, but the notion that patients can act as consumers and make appropriate decisions concerning medical treatment poses countervailing risks of its own. A better accommodation among key players needs to be struck to foster the safe use of pharmaceuticals, according to HBS professor Arthur Daemmrich. The "pharmacy to the world," once located at the intersection of Germany, Switzerland, and France, today is found in the United States. Studies of the industry have attributed this sustained competitive advantage to a variety of factors, including U.S. intellectual property policies, funding for biomedical research through the National Institutes of Health, the absence of government controls on drug prices, and the availability of venture capital and other factors that fostered the growth of the biotechnology industry. The data and analysis presented in this working paper, however speculative, are an initial step toward deepening the understanding of interrelationships between government regulation, patients' mobilization both as regulators and as consumers, and the functioning of the pharmaceutical industry. Key concepts include: An open question is whether the current "pharmacy to the world" of the United States will lose ground to competitors from developing countries, especially India and China. Regulation plays a role in the success and failure of the pharmaceutical industry. The consumer mode that has emerged in the United States has proven easy to manipulate for the industry, as in cases of corporate-financed organizations claiming to be self-organized by patients. The consumer mode in the United States has also driven a focus on disease prevalent in wealthy countries, to the detriment of research into HIV/AIDS, malaria, and other ailments prevalent in the developing world. The combination of public attention to drug prices, health concerns from product withdrawals due to adverse reactions, and criticisms of the failure to deliver medicines to patients in developing countries pose significant challenges to the industry and regulators. The emergence of a consumer model of regulation poses a number of critical, unresolved questions about the longer-term role of government, industry, the medical profession, and citizens. Closed for comment; 0 Comments.
- 08 Apr 2009
- Research & Ideas
Clayton Christensen on Disrupting Health Care
In The Innovator's Prescription, Clayton Christensen and his coauthors target disruptive innovations that will make health care both more affordable and more effective. From the HBS Alumni Bulletin. Closed for comment; 0 Comments.
- 03 Apr 2009
- Working Paper Summaries
Applying the Care Delivery Value Chain: HIV/AIDS Care in Resource Poor Settings
The prevention and treatment of a complex disease such as HIV/AIDS in resource‐poor settings presents enormous challenges. Many of the social and economic factors that make populations living in these settings vulnerable to HIV/AIDS such as poverty, malnutrition, and political instability conspire to create barriers to effective care delivery. Understanding how interventions are related to each other and how local socioeconomic factors influence them is critical to effective program design. The Care Delivery Value Chain (CDVC) looks at care as an overall system, not as a series of discrete interventions, and describes the activities required to deliver care, illustrating their sequence and organization. Government agencies, philanthropic organizations, and non‐governmental organizations can use the framework to improve HIV/AIDS care delivery. Key concepts include: The CDVC framework allows one to outline and analyze the process of care delivery for a medical condition and provide maximize value for patients. The CDVC framework can map the activities associated with HIV/AIDS care delivery in resource-poor settings to illuminate effective linkage and coordination. The CDVC framework allows synthesis of knowledge about the overall system of care delivery and provides a common language for improving it. Closed for comment; 0 Comments.
- 09 Mar 2009
- Research & Ideas
How to Revive Health-Care Innovation
Simple solutions to complex problems lead to breakthroughs in industries from retailing to personal computers to printing. So let's try health care, too. According to HBS professor Clayton M. Christensen and coauthors of The Innovator's Prescription, such disruption to an industry might look like a threat, but it "always proves to be an extraordinary growth opportunity." Book excerpt. Key concepts include: Most disruptions have three enablers: a simplifying technology, a business model innovation, and a disruptive value network. Business model innovations are almost always forged by new entrants to an industry. Disruption of an industry rarely happens piecemeal. It is more common that entirely new value networks arise, displacing the old. Always, the technological enablers of disruption are successfully deployed against an industry's simplest problems first. Health care is no different. Closed for comment; 0 Comments.
- 09 Oct 2008
- Working Paper Summaries
Dirty Work, Clean Hands: The Moral Psychology of Indirect Agency
When powerful people do morally questionable things, they rarely interact directly with their putative victims. Mobsters have hit men. CEOs have vice presidents, lawyers, and accountants. More specifically, the powerful are likely to carry out their intentions through the actions of other agents, with varying degrees of explicit direction and control. This working paper describes four studies that explore the effects of such "indirect agency" on moral judgment. Key concepts include: Results of these studies suggest that heightened awareness of people's sometimes dubious motivations for acting indirectly, and the organizational structures that facilitate them, may be a useful safeguard against the abuse of power. Acting indirectly through another can hide the fact that one has caused harm, hide the fact that one knowingly chose to cause harm, and hide the extent of one's control over the harmful outcome. Causing harm indirectly through another can protect harm-doers, and thus harm society in a more subtle and insidious way. This is important to know, given that many of the greatest crimes against society are perpetrated by powerful people who carry out their intentions through others. Closed for comment; 0 Comments.
- 16 Jul 2008
- Op-Ed
What Should Employers Do about Health Care?
Companies that cut health care costs without improving the overall value of care eventually pay a price in terms of employee absenteeism and chronic ailments. According to Harvard University professor and strategy expert Michael E. Porter and coauthors, the best way to truly reduce health care costs is to improve quality. Closed for comment; 0 Comments.
- 17 Dec 2007
- Research & Ideas
The Rise of Medical Tourism
Medical tourism—traveling far and wide for health care that is often better and certainly cheaper than at home—appeals to patients with complaints ranging from heart ailments to knee pain. Why is India leading in the globalization of medical services? Q&A with Harvard Business School's Tarun Khanna. Key concepts include: Medical tourism is a new term but not a new idea. Patients have long traveled in search of better care. Today, constraints and long waiting lists at home, as well as the ease of global travel, make medical tourism more appealing. Superior medical schools, a low cost of living, family preferences, and the barriers to foreign accreditation mean that Indian doctors may prefer to work in India rather than elsewhere. The medical services industry is evolving quickly. Khanna expects to see dynamics in China similar to those in India and in other parts of Southeast Asia. Closed for comment; 0 Comments.
- 24 Sep 2007
- Research & Ideas
The FDA: What Will the Next 100 Years Bring?
With the possible exception of the Internal Revenue Service, no other governmental agency touches the lives of more Americans than the U.S. Food and Drug Administration, which ensures the safety of $1.5 trillion worth of consumer goods and medicines. Harvard Business School professor Arthur A. Daemmrich discusses the impact and challenges of the agency and his new book, Perspectives on Risk and Regulation: The FDA at 100. Closed for comment; 0 Comments.
- 14 Aug 2007
- Working Paper Summaries
Improving Patient Outcomes: The Effects of Staff Participation and Collaboration in Healthcare Delivery
Health-care organizations have a well-documented, industry-wide need to improve their processes. To that aim, the Institute of Medicine has made at least 2 recommendations that focus on front-line staff—physicians, nurses, and respiratory therapists. The first recommendation states that front-line staff should be involved in unit decision-making and the design of work processes and workflow (participation). The second emphasizes respectful interactions among front-line staff, including information-sharing and coordinating activities to achieve organizational goals (collaboration). This study provides preliminary supporting evidence for the Institute of Medicine's recommendations to use a dual, front-line strategy of participation and collaboration to improve patient outcomes. Key concepts include: Shared decision-making and respectful collaboration are vital to enabling improvement in health-care organizations. Front-line staff participation in process improvement can solve a common problem: lack of commitment from health-care professionals to implement new practices. Units with more collaboration—as measured by staff perception and use of collaborative work practices—experienced greater improvement in risk-adjusted mortality among patients. Participation in process improvement may be an effective strategy for other service organizations that face staff resistance to new routines. Closed for comment; 0 Comments.
- 04 Jun 2007
- Research & Ideas
Is Health Care Making You Better—or Dead?
Professor Regina Herzlinger has been studying the US health care system for decades, advocating for consumer-driven reform as the best remedy. But the slow pace of change, which she attributes to a fat-cat network of insurers, policymakers, hospitals, and even employers, has her fed up. Her new book, Who Killed Health Care? adopts the emotional language of a manifesto in demanding change to make health care more responsive to customers, affordable to those in need, and a hotbed of innovation and entrepreneurship. Closed for comment; 0 Comments.
- 30 May 2007
- Research & Ideas
Health Care Under a Research Microscope
Perhaps no industry has caught the research attention of Harvard Business School faculty as much as health care. Researchers are investigating business-focused solutions on everything from improving team work among surgical teams to developing market motivations that increase the use of water purification in poor villages. Key concepts include: The $2 trillion American health care system has grown bloated and overly expensive, and it delivers poor service to many patients. Harvard Business School faculty are looking at the system through a business management perspective to recommend changes in almost all aspects of health care research and delivery. Around the world, HBS researchers are studying ways to improve medical services to the poor using techniques that include everything from motivational marketing to microfinance. Closed for comment; 0 Comments.
- 04 May 2007
- What Do You Think?
How Do Managers Think?
"Uncertainty sometimes is essential for success" asserts a new book, How Doctors Think. The work of doctors raises intriguing questions about managing, says Jim Heskett, since diagnostics are an important part of managerial decision-making, too. Jim sums up nearly 60 responses from readers around the world, including practicing physicians. Closed for comment; 0 Comments.
- 02 Mar 2007
- What Do You Think?
What Is the Government’s Role in US Health Care?
Healthcare will grab ever more headlines in the U.S. in the coming months, says Jim Heskett. Any service that is on track to consume 40 percent of the gross national product of the world's largest economy by the year 2050 will be hard to ignore. But are we addressing healthcare cost issues with the creativity they deserve? What do you think? Closed for comment; 0 Comments.
- 09 Feb 2007
- Working Paper Summaries
Do Corporate Social Responsibility Ratings Predict Corporate Social Performance?
Ratings of corporations' environmental activities and capabilities influence billions of dollars of "socially responsible" investments as well as consumers, activists, and potential employees. But how well do these ratings predict socially responsible outcomes such as superior environmental performance? Companies can enhance their environmental image in one of two ways: by reducing or minimizing their impact on the environment, or by merely appearing to do so via marketing efforts or "greenwashing." This study evaluates the predictive validity of environmental ratings produced by Kinder, Lydenberg, Domini Research & Analytics (KLD), and tests whether companies that score high on KLD ratings generate superior environmental performance or whether highly rated firms are simply superior marketers of the factors that these rating agencies purport to measure. The data analysis examines all 588 large, publicly-owned companies in the United States that were both regulated by the U.S. Environmental Protection Agency and whose social performance was rated by KLD at least once during 1991-2003. This paper may be the first to examine the predictive validity of social or environmental ratings. Key concepts include: KLD ratings for environmental "concerns," such as hazardous waste and regulatory problems, have small but statistically significant effects in predicting future emissions and regulatory violations. KLD ratings for environmental "strengths," such as environmentally beneficial products or pollution prevention, do not predict future environmental outcomes. Most, but not all, of the predictive power of KLD ratings is due to the fact that lagged emissions and regulatory violations predict both lagged KLD ratings and future emissions and regulatory violations. KLD expends substantial resources attempting to measure the quality of companies' environmental management systems. The results suggest that this measurement is difficult to do well. Closed for comment; 0 Comments.
- 13 Dec 2006
- Research & Ideas
Improving Public Health for the Poor
Microfinance may offer a window on new methods for widening access to healthcare for the poor, says Harvard Business School's Michael Chu. He and colleagues at the Harvard School of Public Health have embarked on a new project to serve this critical sector. Bringing together public healthcare and market forces "could have huge impact," he says. Key concepts include: Poverty is defined by three billion people in the world living on less than $2 a day. Public health as a private good should be complementary to public health as a public good, not in opposition to it. Project Antares wants to take high-impact initiatives and deliver them through commercial means. Part of its measure of success is whether a higher percentage of the population is helped than would be otherwise. Poverty cannot be tamed with a single solution. It needs an arsenal comprising education, healthcare, housing, access to basic services, and access to capital. Closed for comment; 0 Comments.
- 01 Nov 2006
- Working Paper Summaries
Male Circumcision and AIDS: The Macroeconomic Impact of a Health Crisis
The AIDS epidemic is a humanitarian disaster that has struck sub-Saharan Africa with particular severity, but its macroeconomic impact is much less certain. Though conflicting theories abound, empirically-based studies on the link between HIV prevalence rates and economic growth have shown no consensus. Given the significant medical evidence that male circumcision can reduce the risk of contracting HIV in Africa, tribal circumcision practices provide an "experimental" setting to test the impact of the AIDS epidemic on the overall economy. Key concepts include: AIDS has not had a measurable impact on key economic variables in Africa such as gross domestic product per capita, savings rates, and fertility. Youth literacy levels may have increased more slowly than they would have in the absence of AIDS, suggesting that HIV may decrease investment in education. The AIDS epidemic may have led to an increase in malnutrition, perhaps supporting the hypothesis that AIDS has contributed to the persistence of poverty in Africa. While the impact of the epidemic on growth has not been as large as the world feared, governments of high-AIDS countries need to establish educational and nutritional outreach. Closed for comment; 0 Comments.
- 14 Jul 2006
- Op-Ed
The Case for Consumer-Driven Medicaid
The Medicaid program is a health insurance safety net for 52 million Americans, but the price tag threatens the financial stability of the states. Regina Herzlinger looks to South Carolina for a model in consumer-driven healthcare. Key concepts include: Medicaid costs threaten the financial health of states. Consumer-driven plans dramatically control costs and improve the health of those with chronic disease. Closed for comment; 0 Comments.
- 12 Jul 2006
- Research & Ideas
Competition the Cure for Healthcare
Michael Porter is considered by many the world's foremost authority on competition and strategy. He discusses the need for fundamental reform in the way the United States delivers healthcare. Q&A. Key concepts include: American healthcare is broken structurally, rewarding the wrong actions and punishing the patient. Competition correctly placed in healthcare can reduce cost, improve physician performance, and create better results for patients. Closed for comment; 0 Comments.
Diagnosing the Public Health Care Alternative
With deep experience in health insurance reform, HBS faculty describe how improved competition in insurance plans could improve value for patients. Professors Regina E. Herzlinger, Robert Huckman, and Michael E. Porter take the pulse of a debate. Key concepts include: "A government market with an underpriced Medicare would likely lead to the death of private-sector markets and products," say Professor Regina E. Herzlinger and coauthor Tom Coburn (R-OK). Patients would like the option of a public insurance plan, according to Professor Robert Huckman. Competition among insurers should be based on improving patients' health outcomes achieved per dollar spent, writes Professor Michael E. Porter. Closed for comment; 0 Comments.