Giving Compass' Take:

· The Christensen Institute discusses the high cost of hospital care and the benefits behind making homes and communities the default location for healthcare.

· How do the high costs of hospital care affect the US economy? How can donors support the expansion of quality, affordable healthcare for all?

· Learn more about how hospitals are expanding access to healthcare through the use of telehealth. 

In the 20th century, hospitals completed their transformation from the hospice-like institutions of the Middle Ages, into large, gleaming centers of advanced medical expertise and technology that save and improve lives every day. But an unintended consequence of hospitals’ dazzling capabilities is a staggering cost burden that’s proving toxic to the American economy.

Today, hospital care accounts for approximately 33% of the US’ $3.5 trillion annual health care expenditures, according to CMS. The drivers of hospital costs are complex and hard to tackle, including (but not limited to) market consolidation that enables price hikes, heavy administrative burdens, expensive technology and patient usage patterns.

In The Innovator’s Prescription, Clayton Christensen et al. explained another important driver of high hospital care costs: conflation under one roof of business models designed to address very different needs—such as the need for diagnosis of unique, complex conditions and experimental treatments, versus that for highly standardized services (for instance, some surgical procedures). This common phenomenon makes optimization of either business model very difficult, and thus drives up overhead costs.

Read the full article about pulling healthcare out of the hospital by Rebecca Fogg at the Christensen Institute.