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The price-cost disconnect in healthcare: Negative consequences and recommended remedies

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Payers and providers have been forced to scrutinise costs more over the last five to ten years of vigorous healthcare reform; however, this increased attention to costs has not been reflected in pricing, and a price-cost disconnect leads to many deleterious consequences. This paper outlines the negative results of this disconnect and recommends several ways in which this gap can be corrected to create a more cost-efficient healthcare economy, one of the goals of the so-called Triple Aim of healthcare reform.
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Keywords: bundled payments; consumer-driven cost efficiencies; cost accounting; preservation of margins; price-cost disconnect; provider management; value-based reimbursement

Document Type: Research Article

Publication date: June 1, 2016

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  • Management in Healthcare is the major new professional journal publishing in-depth, peer-reviewed articles and case studies on leadership, administration and management in healthcare. Content will be written by and for healthcare management professionals and researchers with no advertising or sales pitches.

    Each quarterly 100-page issue – published in print and online – will feature detailed, practical articles on key business issues which cut through the deluge of information facing healthcare management professionals to showcase the latest thought leadership in how to deliver more with less resources while at the same time improving healthcare quality, along with actionable advice and ‘lessons learned’ from fellow healthcare managers to put that strategy into practice. It will not publish advertising but rather detailed analysis of new thinking and practice at a wide range of healthcare providers worldwide for readers to benchmark their organization against, with every article being peer-reviewed by an expert Editorial Board to ensure that it focuses on the healthcare manager’s perspective, the challenges they face and how they can tackle them.

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