Costs and Quality of Health Care Services Flashcards
(17 cards)
What are the learning objectives related to costs and quality of health services?
Understanding types and definitions of costs
Exploring the relationship between cost and quality of health services
These objectives guide the analysis and evaluation of health service economics.
How is cost defined in the context of health services?
Value of resources used to produce, provide, and consume a good or service
Economic definition: Opportunity cost, which is the value of opportunity forgone
Costs can exist without monetary exchange and extend beyond health services to include costs on patients and other services
This definition encompasses both direct and indirect costs in health care.
What are the broad categories of costs in health care?
- Health Sector Costs: Valuation of resources used in operating a program
- Patient and Family Costs: Out-of-pocket costs, transport, parking, etc.
- Productivity Losses: Monetary value of output lost due to illness or disability
- Other Sector Costs: Additional costs not categorized above
These categories help in understanding the full economic impact of health care services.
What is Total Cost (TC) in health care?
Cost of producing a specific quantity of output
Total Cost is crucial for understanding the overall financial requirements of health services.
What is Fixed Cost (FC) in health care?
Costs that do not vary with output in the short run (e.g., rent)
Fixed costs are essential for budgeting and financial planning in health care.
What is Variable Cost (VC) in health care?
Costs that vary with the level of output (e.g., supplies)
Understanding variable costs is important for managing operational expenses.
What is Average Cost (AC) in health care?
TC divided by quantity (TC/Q), important for budgeting
Average Cost helps organizations evaluate their financial efficiency.
What is Marginal Cost (MC) in health care?
Extra cost of producing one additional unit of output
Marginal Cost is critical for decision-making regarding resource allocation.
What are Incremental Costs in health care?
Difference in costs between two or more programs
Incremental Costs are useful for comparing the cost-effectiveness of different health interventions.
Are costs equal to charges in health care?
Charges reflect market rates and may differ from costs due to market imperfections
Adjustments to charges should be made only if they introduce bias or if there is a clear method for adjustment
This distinction is important for understanding pricing strategies in health care.
From whose perspective should costs be analyzed?
- Patient
- Ministry of Health
- Other government ministries
- Agency providing the program
- Society
- Employer
Different perspectives can lead to varying interpretations of cost implications.
What are the types of efficiency in health care?
- Technical Efficiency: Maximum output with given resources
- Productive Efficiency: Maximization of health outcomes for a given cost
- Allocative Efficiency: Resources allocated to maximize community welfare
Understanding these efficiencies is crucial for optimizing health care delivery.
What are the leading causes of inefficiency in health care?
- Human Resources: Inappropriate staff mix, underutilization, and lack of motivation
- Medical Commodities: Underuse of generics and high prices
- Health System Factors: Waste, corruption, and payment systems encouraging over-servicing
- Health Care Services: Long waiting times, inappropriate facility size, and medical errors
- Client Factors: Ignoring client preferences and satisfaction
Identifying these causes is essential for improving health care systems.
How can efficiency be increased in health care?
- Human Resources: Training, flexible contracts, performance-based pay, task-shifting
- Medicines: Enforcing manufacturing standards, promoting generics, and monitoring prices
- Health Care Services: Improving clinic settings, developing clinical guidelines, and eliminating unnecessary services
- Health System Leakages: Regulation, promoting codes of conduct, and economic evaluation
Strategies for increasing efficiency can lead to better health outcomes and cost savings.
What are hidden costs in health care?
Costs not reflected in financial reports or budgets, often associated with poor service quality
Common sources include employee non-attendance, medical errors, and occupational diseases
Hidden costs can significantly impact the overall financial health of healthcare organizations.
What are the major consequences of dysfunctions leading to hidden costs?
- Excess salary
- Overtime
- Overconsumption
- Non-production
- Risks
These consequences highlight the importance of addressing inefficiencies in health services.
How can hidden costs be reduced?
- Analyzing data on hidden costs
- Implementing appropriate policies
- Involving employees in cost management
- Measuring effectiveness
Addressing hidden costs can enhance the financial sustainability of health care services.
