Cost and Quality of care Flashcards
(18 cards)
What are the broad categories of health sector costs?
- Health sector costs
- Patient and family costs
- Productivity losses
- Other sector costs
Health sector costs include the valuation of resources used in operating a program. Patient and family costs encompass out-of-pocket expenses, transport, and other related costs. Productivity losses refer to the monetary value of output lost due to health issues.
Define total cost (TC) in the context of healthcare.
Cost of producing a particular quantity of output
Total cost encompasses all costs associated with producing a specific amount of healthcare services.
What is the difference between fixed costs (FC) and variable costs (VC)?
- Fixed costs (FC): Costs that do not vary with quantity of output in the short run
- Variable costs (VC): Costs that vary with the level of output
Fixed costs include expenses like rent and salaries, while variable costs can include supplies and fees-for-service.
What does average cost (AC) indicate?
AC = TC/Q, cost per unit of output
Average cost is important for budgeting and helps in understanding the cost per unit of healthcare services provided.
What are the implications of high average costs in healthcare?
- High quality
- Poor efficiency
High average costs can indicate a high standard of care but may also reflect inefficiencies in resource use.
What does marginal cost (MC) refer to?
Extra cost of producing one extra unit of output
Marginal cost is crucial for understanding the financial impact of expanding services.
Fill in the blank: Charges or prices reflect the _______ of exchange.
[market rate]
What adjustments should be made to charges in healthcare?
- Adjustments should only be made if:
- Unadjusted prices introduce bias into the study
- There is a clear and objective way of making adjustments
Common techniques for adjustment include the use of cost-to-charge ratios.
True or False: Costs can be viewed differently from various perspectives.
True
The perspective of costing can vary depending on the viewpoint, such as that of the patient, government, or healthcare provider.
What are the three types of efficiency in healthcare?
- Technical efficiency
- Productive efficiency
- Allocative efficiency
Each type of efficiency addresses different aspects of resource use and health outcomes.
Define technical efficiency.
Producing maximum output with given resources
An intervention is technically inefficient if it could produce the same or greater outcomes using fewer resources.
What characterizes productive efficiency?
Maximization of health outcome for a given cost or minimization of cost for a given outcome
This allows for the assessment of the relative value for money of healthcare interventions.
What is allocative efficiency?
Achieved when resources are allocated to maximize the welfare of the community
Allocative efficiency is dependent on productive efficiency.
List some causes of inefficiency in healthcare.
- Inappropriate staff mix
- Underutilized staff
- Higher prices of medicines
- Waste and corruption
- Non cost-effective interventions
- Long waiting times
These factors can lead to increased costs and reduced quality of care.
How can human resources be improved to increase efficiency?
- Training
- Flexible contracts
- Performance-based pay
- Task-shifting
- Change staff composition
Enhancing human resources is crucial for improving overall healthcare efficiency.
What are hidden costs in healthcare?
Costs not directly reflected in an institution’s financial reporting or included in the budget
Hidden costs often arise from inefficiencies and poor quality of services.
What are common sources of hidden costs?
- Employee non-attendance
- Staff turnover
- Duplication of duties
- Medical errors
These sources can significantly impact the overall financial health of a healthcare institution.
What should be done to reduce hidden costs?
- Analyze data on hidden costs
- Develop appropriate policies and procedures
- Involve employees in cost management
- Measure effectiveness of actions
Addressing hidden costs can lead to improved efficiency and resource use.
