article thumbnail

Health Systems Need to Completely Reassess How They Manage Costs

Harvard Business Review

hospitals and health systems experienced an average 39% reduction in their operating margins from 2015 to 2017. This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. Here are some examples of what will be required to change the operating culture: Contract rationalization.

Cost 9
article thumbnail

Joint Ventures Reduce the Risk of Major Capital Investments

Harvard Business Review

Driven by economies of scale, container ship size has been increasing for decades, with the largest ships now costing roughly $200 million. Building a large-scale biopharmaceutical facility requires up to $500 million. Model 1: Virtual operator. This all presents CEOs with a tough dilemma. Model 2: Asset capacity pooling.