Massachusetts General Hospital: Cabg Surgery (a) Essay

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Today, governmental, corporate and individual customers increasingly are resisting insurers' attempts to pass on rising healthcare costs. Healthcare providers' costs meanwhile are escalating in the face of an aging population, expensive technologies and therapies... Both payers and providers must determine their true competencies and find ways to remain profitable despite leaner margins. In 1994, Massachusetts General Hospital (MGH), with its $1 billion budget and its dozens of thousands visits per year, is urged to find a new business model to resist cost pressure… In other words, how MGH could lower its costs while enhancing the quality of care provided?

Financially speaking,
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If we are to focus on its accounting systems, it seems that they contain only poor data and are even unable to trace costs to individual patients. As a result of this lack of information relative to the efficiency of different treatment methods, we do not even know which treatment provides the best outcomes. How to improve in such conditions?

One may argue that in any cases, doing nothing is always a solution. However, with increased cost pressure and competition, MGH must do something; it must rethink its way of curing its patients, its way of doing business. That said, MGH will sooner or later have to deal with the inherent reluctance that medical staff has in considering its job as a business. Basically, the conditions for success in the healthcare industry are focus on costs of services, average length of stay (which also has a high impact on costs) and quality (often measured through mortality rates, the patient's perception of quality, which will depend on a successful outcome, a good follow-up and a positive experience before, during and after the operation.).
In terms of cost reduction, MGH can reduce the number of nurses and increase the number of medical assistants to perform low value-added tasks for example.
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