Measuring healthcare productivity - from unit to system level.

Purpose - Healthcare productivity is a growing issue in most Western countries where healthcare expenditure is rapidly increasing. Therefore, accurate productivity metrics are essential to avoid sub-optimization within a healthcare system. The purpose of this paper is to focus on healthcare production system productivity measurement. Design/methodology/approach - Traditionally, healthcare productivity has been studied and measured independently at the unit, organization and system level. Suggesting that productivity measurement should be done in different levels, while simultaneously linking productivity measurement to incentives, this study presents the challenges of productivity measurement at the different levels. The study introduces different methods to measure productivity in healthcare. In addition, it provides background information on the methods used to measure productivity and the parameters used in these methods. A pilot investigation of productivity measurement is used to illustrate the challenges of measurement, to test the developed measures and to prove the practical information for managers. Findings - The study introduces different approaches and methods to measure productivity in healthcare. Practical implications - A pilot investigation of productivity measurement is used to illustrate the challenges of measurement, to test the developed measures and to prove the practical benefits for managers. Originality/value - The authors focus on the measurement of the whole healthcare production system and try to avoid sub-optimization. Additionally considering an individual patient approach, productivity measurement is examined at the unit level, the organizational level and the system level.