To prepare for this Discussion, complete the readings in your Learning Resources. Think of a project or program (e.g. creating a new geriatric health center, purchasing a piece of expensive diagnostic equipment, or adding an employee benefit) in a health care setting. Identify all of the primary and secondary benefits of the program. Also identify the direct and indirect costs.
Post a comprehensive response to the following:
• Provide a brief description of the project or program you selected.
• Highlight the primary and secondary benefits of this project. Briefly explain the direct and indirect costs. Are there costs that cannot be quantified? Are there any benefits that cannot be quantified? Why?
• As a decision maker, how would you use the CBA and CEA for this project?
Be sure to support your work with specific citations from this week’s Learning Resources and/or additional scholarly sources as appropriate. Your citations must be in APA format.
Learning Resources
Required Resources
Media
• Interactive Media: Laureate Education, Inc. (Executive producer). (2011). Good Samaritan Hospital organizational chart—: Costs in health care. Baltimore, MD: Author.
This week Patient Care Manager Nadja Muchow shares her team approach to value, Vice President of Finance Deana Stout discusses the financial aspects of change in the hospital and Vice President of Strategic Planning and Business Development Jennifer Weiss Wilkerson shares how Good Samaritan involves physicians in its strategic planning for major capital and equipment needs.
Video Transcripts (zip file)
Readings
• Course Text: Introduction to Health Care Economics & Financial Management
o Chapter 7, “Cost Allocation and Cost-Finding”
In their operating expense budgets, many health care settings budget and report indirect costs generated by departments that provide direct services. This chapter presents an overview of the allocation of indirect costs. The concepts of cost allocation and cost-finding are explained with examples from health care settings.
o Chapter 8, “Break-Even Analysis”
The break-even analysis calculates how much one should charge or how many patients must be seen to cover the cost of doing business in health care. This chapter addresses these factors and includes the calculation and application of the contribution margin as well as the importance of indirect and overhead costs.
o Chapter 9, “Cost-Benefit Analysis and Cost-Effectiveness Analysis”
Cost-benefit and cost-effectiveness analyses are the focus of this chapter. This chapter will explain how you evaluate the benefits and resources used between two or more alternative interventions.
Optional Resources
• Article: Kee, J. E. (1999). At what price? Benefit-cost analysis and cost-effectiveness analysis in program evaluation. The Evaluation Exchange, 5(2 & 3), 4–5. Retrieved from http://www.hfrp.org/evaluation/the-evaluation-exchange/issue-archive/methodology-15/at-what-price-benefit-cost-analysis-and-cost-effectiveness-analysis-in-program-evaluation
• Article: Hutton, G. & Reyfuess, E. (2006). Guidelines for conducting a cost-benefit analysis of household energy and health interventions. World Health Organization. Retrieved fromhttps://extranet.who.int/iris/restricted/bitstream/10665/43570/1/9789241594813_eng.pdf
• Article: Disease Control Priorities Project. (2008). Using cost-effectiveness analysis for setting health priorities.Retrieved from http://www.dcp2.org/file/150/DCPP-CostEffectiveness.pdf
• Article: Centers for Disease Control and Prevention. (n.d.). Cost benefit analysis. Retrieved from http://www.cdc.gov/owcd/eet/cba/PrintAll.html
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