How to Solve the Cost Crisis in Health Care

Michael Porter and Robert Kaplan weigh in on the health care cost crisis: “the biggest problem with health care isn’t with insurance or politics. It’s that we’re measuring the wrong things the wrong way…

Any accurate costing system must, at a fundamental level, account for the total costs of all the resources used by a patient as she or he traverses the system… That means tracking the sequence and duration of clinical and administrative processes used by individual patients—something that most hospital information systems today are unable to do.

The key to unlocking this potential is combining an accurate cost measurement system with the systematic measurement of outcomes.”

“This recent HBR article hits home on the key to solving the #1 challenge facing healthcare today. As leaders, we know you cannot manage what you cannot measure. Yet, most healthcare systems have inadequate tools to measure true costs.

Porter and Kaplan point out that effective cost management comes from systematic measurement of outcomes and accurate cost measurement. It’s been perceived that tracking true costs is a daunting task due to the inherit complexity of healthcare.

That perception is a thing of the past with modern tools to ascertain true costs, link costs to processes and outcomes, accurately forecast and find sustainable cost reductions while optimizing patient outcomes. ExactCost provides this capability.”