Value-Based Health Care Delivery – Measuring and Managing Costs
The Value-Based Health Care Delivery (VBHCD) initiative, led by Harvard Business School professors Michael Porter and Robert Kaplan, engages with leading health care providers in the U.S. and around the world to measure and manage patient-level costs over complete cycles of care for a variety of medical conditions. This innovative approach links costs to clinical outcomes in order to identify opportunities for value improvement and develop reimbursement models aligned with high value care delivery.
Read more about Value-Based Health Care Delivery
Read more about Measuring Costs
Action Research
The Harvard Business School VBHCD team helps provider sites:
- Implement time-driven activity-based costing (TDABC) to measure costs over the full care cycle, and then identify cost savings while maintaining quality of care
- Facilitate process improvements identified through the TDABC analysis
- Develop innovative reimbursement approaches that reward providers and organizations for delivering higher value care
- Produce academic materials to disseminate insights and care models gleaned from the work
The Harvard Business School offers partner sites extensive collaboration and support in implementing the value framework. The research identifies actionable steps to improve patient value, either by reducing costs while maintaining clinical outcomes or by improving outcomes without raising costs.
Medical Conditions
The VBHCD team has examined the following medical conditions:
Acute
Conditions
- Joint (knee and hip) replacements
- Cancer: Head and neck, breast, prostate – surgery
and radiation treatments - Heart valve replacements and repairs
- Neurosurgical procedures – cervical spine, brain
- Child birth – vaginal and caesarian
- Bariatric surgery
- Hysterectomies
- Urological procedures
- Rotator cuff repairs
- Tonsillectomies and adenoidectomies
- Observations room patients after ED care
Chronic &
Primary Care
- End-stage kidney disease
- Diabetes
- Congestive heart failure
- Care transition patients to reduce frequency of readmission
- Primary and psychiatric care for patients with intellectual and behavioral disabilities
- Behavioral health for post-traumatic stress disorder
The VBHCD team is also examining how to estimate and distribute the costs of ancillary, indirect, and support departments, including Radiology and Billing.
VBHCD Project Sites
The VBHCD model is being implemented around the globe. VBHCD project sites include:
- American Society of Anesthesiologists
- Baylor Heart & Vascular Hospital
- Beth Israel Deaconess Medical Center
- Boston Children’s Hospital
- Brigham & Women’s Hospital
- Centers for Medicare and Medicaid Services
- Chicago Prostate Center
- Connecticut Joint Replacement Institute
- Intermountain Healthcare
- Johns Hopkins
- Joslin Diabetes Center
- Kaiser Permanente
- Lynn Community Health Center
- Massachusetts Eye and Ear Infirmary
- Massachusetts General Hospital
- Mayo Clinic
- MD Anderson Cancer Center
- Medical University of South Carolina
- Memorial Sloan Kettering Hospital
- Mirebelais Hospital, a Partners in Health facility (Haiti)
- Narayana Hrudayalaya (Bangalore, India)
- Novant Health (North Carolina)
- Schӧn Klinik (Germany)
- Scottsdale Healthcare
- St. Francis Hospital & Medical Center (Hartford, CT)
- Steward Health
- Southboro Reliant Medical Group
- Texas Children’s Hospital
- University of Arkansas for Medical Sciences
- University of California, Los Angeles Medical Center
- University of California, San Francisco Medical Center
- University of Rochester Medical Center
- University of Utah Health Care
- UPMC
- Vanderbilt University Medical Center
- Veterans Health Administration
Professor
Robert S. Kaplan
Robert S. Kaplan is the Marvin Bower Professor of Leadership Development, Emeritus at the Harvard Business School. Kaplan’s research, Executive Education teaching, and consulting focus on linking cost and performance management systems to strategy implementation. His current research focuses on two topics: measuring and managing organizational risk and, in a joint project with Michael Porter, measuring the cost of delivering health care and linking patient costs to outcomes.
Learn more about Professor Kaplan’s work