Robert S. Kaplan, Mary L. Witkowski, Jessica A. Hohman
Harvard Business School (112085-PDF-ENG)
March 16, 2012
The case illustrates how a leading German hospital group has invested heavily in measuring outcomes and costs at the patient level, which form the basis of a framework of values in the healthcare sector. The company is launching a pilot project to use Timed Activity Based Cost (TDABC) to measure the cost of total knee replacements. The costing project complements an existing initiative for comprehensive results measurement. The combination of accurately measuring outcomes and costs enables local doctors, nurses, and administrative staff to add value to the care they provide. It also enables benchmarking across different group hospital locations to identify best practices that can be shared. The case closes with the decision to use outcome and cost measurements as the basis for introducing a new approach to recovery that promises to dramatically shorten the duration of the postoperative stay.
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