And the second was how quickly they could assign beds to those who came through the emergency room. One was the way they assigned beds to patients who came into the hospital. There was a study done by Johns Hopkins, where they were looking at two areas of focus. If you look at the healthcare industry, it is a very labor-intensive industry which of course drives the cost up and creates some of this inefficiency. For example, the administrative and operational processes are cumbersome and inefficient. The other area would be within a health system. And there are significant administrative processes that are in play today as a payer interacts with a provider and that causes inefficiencies. One is the economic model historically has been a fee-for-service–based model, where incentives are not aligned between payers and providers. I will focus on two that I think drive the fact that our productivity in healthcare is not as great as some other industries. Any top-of-mind observations on why this is such a vexing problem so entrenched for healthcare?Īllen: Yes, and that’s a great question, David. And I think one of the vexing challenges in healthcare is that we continue to throw a lot of technology at various problems, and yet we see precious, if any, improvement in productivity over time.Īnd we all know that affordable quality is one of America’s greatest challenges. Allen, welcome, and thanks for joining us.ĭavid: Allen, perhaps just to start, I think at the highest level, we have seen the application of technology and other measures that improve the productivity of industries over time. I’m a senior partner in McKinsey’s healthcare practice, and today it is my pleasure to have Allen Karp, executive vice president of healthcare management and transformation at Horizon Blue Cross Blue Shield join me for a conversation around productivity in healthcare. The views and opinions expressed are those of the interviewee(s) and are not necessarily those of McKinsey & Company.ĭavid Knott: Good afternoon, this is David Knott.
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