How Not to Cut Health Care Costs

Our findings show that to identify cost-cutting opportunities, hospital administrators typically work from the information that is most readily available to and trusted by them—namely, the line-item expense categories on their P&L statements. Those categories, such as personnel, space, equipment, and supplies, are attractive targets: Reducing spending on them appears to generate immediate results. But the reductions are usually made without considering the best mix of resources needed to deliver excellent patient outcomes in an efficient manner

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