Porter Health Care Case Analysis

Like Porter suggested I do agree that many efforts to reduce the health care costs are ineffective because organizations don’t know how to measure the cost properly. The organizations confuse cost with how much they get paid, they add up the costs around departments, not around a patient. Like Porter said they allocate the costs improperly with all kinds of bias. The insurance companies and the governments reimburse for procedures performed but not based on the outcome achieved.
I think what Kaplan said is true. I agree with his statement. The definition of costs should be costs within the system and the patient should be the fundamental costing unit. When the government talks about costs they mean their costs what they to spend to reimburse

providers. The consumer thinks what it costs them to get medical care to pay for their insurance. But it does nothing to decrease the definite costs of delivering care. Providers usually distribute their costs to departments, procedures, and the services based on how much they are reimbursed but not on the actual resources used to deliver the care.
Costs should focus on the specific medical conditions like a Cardiac failure, Diabetes and organizations should focus on adding value by associating costs with health outcomes. It’s a simple and new process to accurately measure the cost and to compare it with the health outcomes. This approach makes the patients and their circumstances, the fundamental unit of analysis and not departmental units, procedures, or services for determining the costs and outcomes. In my point of view, if the cost is based on the medical conditions it can bring accurate costs and value measurement practices into the healthcare delivery which could have a transformative effect.