PUBLICATIONS: Articles

How to Solve the Cost Crisis in Health Care
HARVARD BUSINESS REVIEW (September 2011)
Robert S. Kaplan and Michael E. Porter
This pivotal article presents the key concept of value measurement in health care: evaluating patient outcomes achieved per dollar spent. HBS Professors Robert Kaplan and Michael Porter detail how time-driven activity-based costing can be used to accurately measure costs at the patient level for the span of an entire medical condition.

How Not to Cut Health Care Costs
HARVARD BUSINESS REVIEW (November 2014)
Robert S. Kaplan and Derek A. Haas
Health care providers are facing tremendous pressure to reduce costs—but evidence suggests that many of their responses are counterproductive, raising costs and sometimes decreasing the quality of care. Kaplan and Haas describe five mistakes commonly made in attempts to cut costs, uncovering multiple opportunities to improve processes in ways that lower total costs and deliver better care.

Delivering Higher Value Care Means Spending More Time with Patients
HARVARD BUSINESS REVIEW ONLINE (December 2014)
Derek A. Haas, Yudit C. Krosnerm Nirvan Mukerji, and Robert S. Kaplan
Pressuring physicians to maximize the number of patients they see and minimizing the time they spend with each is a common mistake made in trying to reduce costs. When overworked physicians spend an inadequate amount of time with their patients, the patients may not fully understand the importance of complying with all aspects of their recommended treatments, which eventually leads to deteriorating health and higher treatment costs. In this study, the authors analyze historical data of dialysis patients and used TDABC to assess the costs of care associated with a suboptimal start--which could be reduced by additional upfront provider counseling.

Using Time-Driven Activity-Based Costing to Identify Value Improvement Opportunitues in Healthcare
JOURNAL OF HEALTHCARE MANAGEMENT (November-December 2014)
Robert S. Kaplan, Mary Witkowski, Megan Abbott, Alexis Barboza Guzman, Laurence D. Higgins, John G. Meara, Erin Padden, Apurva S. Shah, Peter Waters, Marco Weidemeier, Sam Wertheimer, and Thomas W. Feeley
This article describes early time-driven activity-based costing work at several leading healthcare organizations in the United States and Europe. It identifies the opportunities they found to improve value for patients and demonstrates how this costing method can serve as the foundation for new bundled payment reimbursement approaches.

How Cleveland Clinic Used TDABC to Improve Value
JOURNAL OF HEALTHCARE MANAGEMENT (November-December 2014)
Christopher J. Donovan, Mike Hopkins, Benjamin M. Kimmel, Stephanie Koberna, and Carrie A. Montie
Cleveland Clinic partnered with Harvard Business School to conduct a pilot project to explore the differences between time-driven activity-based costing (TDABC) and relative value unit costing. The goal was to determine whether TDABC could improve the accuracy of cost information and identify value-improvement opportunities for two types of heart-value procedures. Using TDABC, leaders gained a detailed look into process steps that could be consolidated, reduced, or performed with a lower cost mix of personnel.

How to Design a Bundled Payment Around Value
HARVARD BUSINESS REVIEW ONLINE (October 2013)
Mary Witkowski, Larry Higgins, Jon Warner, Michael Sherman, and Robert S. Kaplan
This paper describes the HBS partnership with two orthopedic surgeons and an insurer, Harvard Pilgrim Health Plan, to co-create a bundled payment offering that covers a complete cycle of care for rotator cuff repairs. This innovative reimbursement approach should encourage value-based health-care delivery.

An Intelligent Redesign of Health Care
HARVARD BUSINESS REVIEW ONLINE (October 2013)
Robert S. Kaplan, Thomas W. Feeley, Mary L. Witkowski, and Heidi W. Albright
This paper provides further details on our work to help MD Anderson’s Center for Cancer Care Innovation identify and act on several process improvement opportunities. The report illustrates the power of TDABC to drive operational changes within a delivery organization.

Better Accounting Transforms Health Care Delivery
ACCOUNTING HORIZONS (June 2014)
Robert S. Kaplan and Mary L. Witkowski
The paper describes the theory and preliminary results for an action research program that explores the implications from better measurements of health care outcomes and costs. After summarizing Porter's outcome taxonomy (Porter 2010), we illustrate how to use process mapping and time-driven activity-based costing to measure the costs of treating patients over a complete cycle of care for a specific medical condition. With valid outcome and cost information, managers and clinicians can standardize clinical and administrative processes, eliminate non-value added and redundant steps, improve resource utilization, and redesign care so that appropriate medical resources perform each process step. These actions enable costs to be reduced while maintaining or improving medical outcomes. Better measurements also allow payers to offer bundled payments, based on the costs of using efficient processes and contingent on achieving superior outcomes. The end result will be a more effective and more productive health care sector. The paper concludes with suggestions for accounting research opportunities in the sector.

Improving Value with TDABC
HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION MAGAZINE (June 2014)
Robert S. Kaplan
The inventor of time-driven activity-based costing explains its applicability to health care delivery. TDABC traces the path of a patient throughout the continuum of care for a specific medical condition; identifies the actual cost of each resource used, such as personnel, space, consumables, and equipment, in both inpatient and outpatient settings; documents the amount of time the patient spends with each resource; and supports the ability to aggregate cost information across multiple organizations that deliver care to a patient throughout a defined episode of care.

Web Extra: Using TDABC to Deliver Better Patient Outcomes at Lower Cost
HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION MAGAZINE (June 2014)
Robert S. Kaplan

To Reconcile Mission and Margin, Deliver Better Outcomes at Lower Costs
ORTHOPEDICS TODAY (December 2013)
Robert S. Kaplan, Pamela K. Greenhouse, and Anthony M. DiGioia III
This article discusses the 4-year collaboration to between the value-based research team at Harvard Business School (HBS) and orthopedic surgical groups at University of Pittsburgh Medical Center (UPMC), Brigham and Women’s Hospital, Boston Children’s Hospital, Mayo Clinic, University of California San Francisco, Connecticut Joint Replacement Unit and the Schön Klinik in Germany. These sites are implementing the value approach, starting with accurate measurement of the outcomes and costs associated with repairing orthopedic conditions such as knee and hip arthritis and rotator cuff tears.