Our Solution

Health care costs are a function of clinical volume and unit cost of the various health care services consumed in the treatment process. Clinical volume depends on patient demand and provider practice decisions. Unit cost depends largely on the investment in fixed capacity. Attempts to reduce health costs by concentrating only on reducing volume, while ignoring the challenge of managing fixed capacity, will fall short since over eighty percent of total costs are locked in fixed investments for buildings, equipment, and staff. If fixed capacity is left unchanged, any reduction in volume will be offset by increases in unit cost leaving total costs relatively unchanged. Cost reduction depends on a simultaneous management of volume and unit cost. Using obstetrics as an example, our solution is developed in three phases.

Phase 1   |   Phase 2   |   Phase 3  

Introduction   |   Principals of HSE   |   Our Approach   |   Our Solution