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Lowering Cost While Improving Care

BCG begins a long-term relationship with the German pharmaceutical manufacturer Boehringer Mannheim. In analyzing the cost of diabetes and its treatment, BCG maps treatment flows for the disease and establishes critical junctures at which interventions could lead to significant cost reductions. Traditional business systems analysis and total quality management principles were then applied to the health care practices of the medical industry. The resulting models offer the promise of better treatment for patients and lower costs for health care providers. The approach is named "disease management" and will serve as a case study for health care reform in the decade that follows.

BCG Insights & Highlights

  • Alan Zakon starts the first of two three-year terms as chief executive officer
  • BCG's founder Bruce Henderson becomes chairman of the board
  • The first associate class starts. Associates are hired right out of college for two or three years and then usually go to business school or other professional schools. Some return to BCG as consultants after earning graduate degrees. Three members of this class later become partners
  • The Executive Committee is created to help the chief executive officer better manage the growing firm
  • In "Strategic and Natural Competition," Bruce Henderson foreshadows the notion of " strategic intent" with an idea of competition that marshals all of a firm's resources and attention. It is both sweeping and revolutionary
  • Consultants = 249

World News

  • A strike at the Lenin shipyard in Gdansk, Poland spreads to other factories in Poland and 500,000 workers go on strike. An independent trade union called Solidarity is formed and is headed by Lech Walesa. It demands freedom of speech, the release of political prisoners, and new labor laws
  • The World Health Organization formally announces the worldwide eradication of smallpox
  • Iran and Iraq begin an eight-year war
  • John Lennon is shot dead in New York City
  • India puts its first communications satellite into orbit
  • American Walter Alvarez and colleagues discover a worldwide layer of iridium-enriched clay that may be the residue of a gigantic meteorite that struck the earth and wiped out the dinosaurs
  • The 22nd Olympic Games open in Moscow but are boycotted by 50 nations to protest the Soviet invasion of Afghanistan