AHA: Christensen Cautions Hospital Leaders on Costs
The complexity of this plant is what drove the overhead costs so high, he explained.
"The plant wasn't inefficient, but the overhead exists because of complexity involved in promising that they would do anything for anyone," he said. "You have the same proposition. No matter what's wrong with you, bring it here."
As a consequence, the overhead costs are enormous.
One of Christenson's colleagues tried to figure out how many pathways patients could go through at UC Irvine. He found 110, "but it's infinite numbers, really."
He argued that most hospitals need to "fragment themselves. You can only address overhead through simplification."
Philip Betbeze is senior leadership editor with HealthLeaders Media.
- As Medicare Advantage Cuts Loom, Disagreement Over Program's Stability
- Medicare Advantage Carriers See 'No Choice' But to Accept Cuts
- Centralizing the Revenue Cycle Protects the Bottom Line
- CA Fines 8 Hospitals for Medical Errors
- Physicians to Appeal 'Docs v. Glocks' Ruling in FL
- Doctors Feel Pressure to Accept Risk-based Reimbursement
- Surgical Checklists Unused in 10% of Hospitals, CMS Data Shows
- Employers Weigh Risks, Benefits of Private Exchanges
- A Fresh Look at End-of-Life Care
- Heart Attack Patient Costs Skyrocket Beyond 30 Days