Cost - effectiveness in health care
- Challenges faced by today's nonprofit health care systems.
- Squeezed margins.
- Comparing the relative costs and their effects on outcomes in health care.
- Documenting resources allocated.
- Third-sector organizations.
- How a cost-effective analysis helps a physician.
Applying cost-effectiveness to heath care is ?a clear necessity for responsible nonprofit management.? (Schmaedick, 1993, p. 3) Cost-effectiveness analysis is an equally necessary tool for a responsible physician who has no choice but to allocate limited resources.Today's nonprofit health care systems face ever-growing challenges that mandate the use of cost-effectiveness analysis. That said, as obvious as it appears for a physician or nonprofit cost manager to compile a thorough and accurate accounting of the expenses, resources and work that goes into a task, it still needs to be conceded that "as the analysis gets more sophisticated, pinning down costs can become very complicated." (Schmaedick, 1993, p. 8)
[...] Since that time, strategic planning appears to be receiving increased, yet still limited, attention in both third-sector practice (e.g., United Way of America, Red Cross, Boy/Girl Scouts (Webster and Wylie, 1988)) and in the management literature (Stone and Crittenden, 1994). (Crittenden & Crittenden, 1997) In short, like all nonprofit organizations, more patients need more services and health care systems have no choice but to measure their costs and results as carefully and accurately as possible. It's the nature of trying to provide more positive outcomes with limited resources. Any manager, or physician attempting to manage the health of their clients, should try to achieve their objectives at the most reasonable costs possible. [...]
[...] As such, it seems hard to apply such rigorous forms of measurement to health care because a large number of variables are in play and assessing the outcomes can result in subjective and soft numbers. Treating a person is even more uncertain, fuzzier, than deciding which hours a museum should be open or how a nonprofit should fundraise for their nature conservancy, and certainty can be even harder to guarantee, but health care and the other nonprofits have the same difficulties. [...]
[...] Cost-effectiveness in the nonprofit sector, especially health care, with the example of functioning in the name of public good in order to prevent cost increases and the waste of limited resources (such as access to a dialysis machine or a finite number of hospital beds) allows all positive outcomes to be seen as results. Therefore, through the lens of the essays in Schmaedick, all resources that go into an analysis are costs, all of the efforts are added up, with the effective use of resources being as significant as the tangible benefits of money spent. [...]