Productivity means more than just producing, obviously.

Productivity is defined as an economic measure of output per unit of input. Relatively speaking, you’re less productive if it takes 4 engineers to change a lightbulb (I’m an engineer, it’s an inside joke if you didn’t chuckle), and you’re more productive if your pet robot changes that lightbulb milliseconds after it goes out. After reading “Should Your Business Be Less Productive”, I admit I was a little confused; possibly because I didn’t fully understand what “productivity” exactly was, and why the article hinted at it having an inverse relationship with labor. To me, productivity was all about getting the most done in the shortest amount of time, I never considered the amount of effort though it takes to put in. It all clicked when I eventually looked up the definition, hopefully my painfully obvious example helped clarify this for you as well (if you were even confused as I was).

The article gives an excellent table (like I said, I’m an engineer, I like tables) of scenarios depending on your business structure, what the optimal amount of productivity to return the highest profitability. I happen to work in healthcare, in a segment that is currently undergoing several reimbursement changes to ultimately cut costs for insurance companies. One example of this is regarding COPD. ((Today is World COPD day, check out this video my company put together, it’s a tear jerker!)) Long story short (I’m going to heavily stereotype/generalize for you), think of your grandparents who have smoked their whole lives – trouble breathing, very wheezy cough – that’s COPD. Recently, the government is now penalizing Hospitals with readmission penalties for COPD patients that return to the hospital within 30 days. This had led to hospitals establishing care programs for COPD patients, to ultimately increase their quality of life, thus reducing hospital admissions. So where does Healthcare, as a service, fit into the productivity discussion?

If you look at the four categories Rust and Huang discuss you would see that Healthcare as a whole, does not necessarily fit into the High Service or Low Service Productivity Buckets. I would argue that it would lean slightly to the right on the +Service Productivity side.

Categories Healthcare as a Service
Market Concentration High
Wages High
Profit Margin Medium
Price Increasing


So how should healthcare appropriately find that balance between productivity and balance? This article titled “Productivity? In Healthcare?” I found tackles this discussion. The author, Joe Flower, works to disprove the misnomer that you cannot improve Healthcare’s productivity. He argues a 2012 book, where the author argues that Healthcare cannot be replaced by automation or technology (which equals higher productivity). In order for Healthcare to increase profitability, I believe it is not through increased labor (more doctors, more nurses), and tonight’s reading assignment and the government agree with me (don’t worry, I won’t bring up Obamacare).

I’ll give an example of how I think technology could help Healthcare find a better balance, because I’m immersed in Healthcare and technology every day. One word: Telehealth. Whether this is a skype with your doctor, or your doctor monitoring your medical devices (think ventilators all the way to weight scales), telehealth is huge now. It reduces costs (seeing more patients quicker, monitoring sick patients), and increases productivity significantly. I think you will find this happening more and more, and eventually, an ideal balance between customer satisfaction, productivity, and profitability will be reached!



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