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. [...]
[...] Analysis of a given health intervention changes from the perspective that views it: primary care physician, specialist, hospital or insurance provider, but an organization can't perform effectively without using its resources wisely. The above quote reminds that “what you see is what you may be an old principle for measuring performance, but it also is dependent on who does the seeing. This complication is also shown in the analysis of Girls Inc. Two of their study's conclusions were to “follow up early and often” (Schmaedick p. [...]
[...] And how does a provider decide what is most cost-effective on a client-by- client basis?“The measures of effectiveness of health practices used in the analysis should be outcome oriented, with length of life and quality of life as the ultimate measures." (Weinstein & Stason p. 46) Quality of life, the possible trade-offs between longevity and quality and how these tie to the activities of daily living are the best way to measure the maximum possible expected health benefit. No other concerns should be more important in the cost-effectiveness analysis. [...]
[...] And costs and benefits don't occur at the same time, but the key point of learning from a decision, the assessment point at which a nonprofit manager or physician assesses available resources, should be after a thorough study of cost-per-unit-effectiveness."Creativity and inventiveness are valued extremely highly, and, in this culture, making the most of what you have is extremely important," (Schmaedick p. 24) is an effective way to put it.The nature of the health care industry is to adapt and change. Nonprofits fall into the trap of predicting their own outcomes without doing the necessary research. Without measurement and a wide look at the big picture, even if the numbers are a bit soft, a physician risks losing sight of what pays off and what doesn't. Properly used, cost-effectiveness analysis proves what works and what doesn't. [...]
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