Harvard Business School Case Study - Intermountain
Intermountain Healthcare Case Study
Gina L. Turley
Northwestern University
In the Harvard Business School case study of Intermountain Health Care (IHC), we learned about the efforts made by IHC to adopt a new strategy for managing health care delivery that is focused on improving care quality while simultaneously saving money. Beginning in 1986 as a series of experiments tying cost outcomes to traditional clinical trials, IHC’s approach to delivering care became known as “Clinical Integration” which “referred to both an organizational structure and a set of tools” (Bohmer, 2002). The organizational structure required a departure from the traditional administrative management model to one that “involved administrative and medical staff working together to implement a system of gathering, storing, and making accessible detailed medical data on each patient”. Once gathered, IHC analyzed that “data across all patients to create decision support tools (protocols) that helped medical providers determine the best medical interventions for each patient and also increase efficiencies” (Bohmer, 2002). Between 1986 and 1996, IHC made two attempts to establish a self-governance model for its physicians, both of which proved unsuccessful. However, through an iterative, continuous process-improvement program highly focused on medical personnel education, IHC was eventually able to establish “quality (defined as process management with measured outcomes) as IHC’s core business approach and to extend full management accountability to IHC’s clinical functions” (Bohmer, 2002).
In 1986, IHC, led by Dr. Brent James, successfully tested Dr. W. Edwards Deming’s theory that “high quality would lead to lower cost” by developing an activity-based cost accounting system that created cost profiles of different strategies for managing particular clinical conditions (Bohmer, 2002). Equipped with these cost profiles, IHC senior management “felt they could realize Deming’s maxim by
Gina L. Turley
Northwestern University
In the Harvard Business School case study of Intermountain Health Care (IHC), we learned about the efforts made by IHC to adopt a new strategy for managing health care delivery that is focused on improving care quality while simultaneously saving money. Beginning in 1986 as a series of experiments tying cost outcomes to traditional clinical trials, IHC’s approach to delivering care became known as “Clinical Integration” which “referred to both an organizational structure and a set of tools” (Bohmer, 2002). The organizational structure required a departure from the traditional administrative management model to one that “involved administrative and medical staff working together to implement a system of gathering, storing, and making accessible detailed medical data on each patient”. Once gathered, IHC analyzed that “data across all patients to create decision support tools (protocols) that helped medical providers determine the best medical interventions for each patient and also increase efficiencies” (Bohmer, 2002). Between 1986 and 1996, IHC made two attempts to establish a self-governance model for its physicians, both of which proved unsuccessful. However, through an iterative, continuous process-improvement program highly focused on medical personnel education, IHC was eventually able to establish “quality (defined as process management with measured outcomes) as IHC’s core business approach and to extend full management accountability to IHC’s clinical functions” (Bohmer, 2002).
In 1986, IHC, led by Dr. Brent James, successfully tested Dr. W. Edwards Deming’s theory that “high quality would lead to lower cost” by developing an activity-based cost accounting system that created cost profiles of different strategies for managing particular clinical conditions (Bohmer, 2002). Equipped with these cost profiles, IHC senior management “felt they could realize Deming’s maxim by