Write a 2-4-page executive summary recommending resource investment in a program based on its potential to deliver positive health and economic outcomes.As a health care professional, you must have a foundational, high-level understanding of health care economics:
The health production function and decision rules for allocating health care resources is a key component of the first assessment in this course. For this assessment, think about the ways in which health production efficiency, both technical and economical, can help drive decisions on the allocation of resources (inputs) to drive improved patient health and results (outcomes) (Feldstein, 2012).
Feldstein, P. J. (2012). Health care economics (7th ed.). Clifton Park, NY: Delmar.
By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:
The ability to research, examine, and determine the most efficient ways to allocate resources in order to produce to best health outcomes is a key competency for health care economic professionals. In the complex field of health care, there will always be multiple ways and multiple programs in which an organization can invest resources. It is the health care economics professional’s responsibility to examine the cost of the inputs in comparison to the historic or projected output of health and then make recommendations regarding investment. Looking at investment is not always entirely about the amount of positive outputs—technical efficiency, economic efficiency, and stakeholder priorities will all also play a part (Feldstein, 2012). Being able to not only understand and crunch the numbers, but also navigate these other considerations, is vital in becoming an effective health care economics professional.
You are a health care economics professional with specific expertise in using a health production function to allocate resources. A member of the Board of Directors has asked you to prepare an executive summary that will help the board understand the current practices of the organization and where the organization should align itself in light of current and emerging trends. Additionally, you have been asked to analyze the inputs and outputs of two current programs in the organization in order to make allocation recommendations about how to best utilize the available resources to achieve the best possible outputs for the programs.
This assessment has three main parts:
If you have not already, it may be helpful to complete the formative activity to check your understanding of the economic concepts relevant to this assessment.
Consult the scoring guide to make sure you are meeting the communication criteria and achieving your desired rubric level.
The purpose of a production function is to analyze inputs (i.e., funding and resources) and outputs (i.e., improved health) to identify the least costly combination of inputs to achieve the desired output.This media piece shows how the health production function can help healthcare leaders make resource allocation decisions to help achieve economically efficient objectives of healthcare services programs.In Detroit, there are two state-funded healthcare services programs with the goal of reducing diabetes prevalence rates in obese individuals with low income living in impoverished areas within the city. The State of Michigan has funding available to make two payments one month apart, and would like to choose only one of these programs in which to invest funding for the program’s expansion. The state wishes to make the most economically efficient decision to improve the health of the most people in need.Program 1: “Bariatricity Detroit” is a large program with a strategic objective to establish additional Bariatric Surgery Centers in selected hospitals for obese patients with diabetes to undergo bariatric weight loss surgeries.Program 2: “Healthy Lifestyles Detroit” is a small program with a strategic objective to increase education and coaching focused on healthy eating, lifestyle and behavioral change and increased physical activities for low-income, obese individuals with diabetes.
The first step in using a Health Production Function is to define inputs and outputs:1 of 7
This question has not yet been answered.Outputs (or objectives) are the results, or goals, you are trying to achieve. Looking at the case study, the following are generally what each program and the state of Michigan are trying to achieve.
2 of 7
This question has not yet been answered.Inputs are the resources that are needed to operate a given program or service. Some example of inputs that would be required to establish and operate the Bariatric Surgery Center for Program 1 would be:
3 of 7
This question has not yet been answered.Again, inputs are the resources needed to operate a program or service. Some of the resources needed to increase the capacity of Program 2 are:
The second step in using a Health Production Function is to define the relationship between the output (goal or objective) to be achieved and the inputs (i.e., funding and resources) are available to work towards achieving each program’s defined objectives.
This diagram shows that the relationship between a program’s inputs and outputs is curvilinear. When a program is relatively small, additional inputs devoted to that program (A1 and A2) are likely to result in relatively large increases in the program’s output. As additional resources are allocated to that program, the total output will continue to increase, but at a more gradual rate. If a program is relatively large, additional inputs devoted to that program (A3 and A4) are likely to result in small increases in the program’s output (Q3 and Q4). Finally, increases in output for both programs will become negligible even though the program’s inputs may continue to increase.According to the Health Production Function, there is a law of diminishing returns to consider when making funding allocation decisions. Funding is referred to as a fixed input, because the state can only provide funding of the same amount two times.4 of 7
This question has not yet been answered.There is no single right answer for this, but below are a number of points to consider when analyzing the graph, the health production function, and law of diminishing returns.If the state allocated funding amounts A1 and A2 to the smaller program 2, “Healthy Lifestyles Detroit,” this would result in large changes to health outputs Q1 and Q2, specifically, larger decreases in the rates of diabetes in low income, obese individuals.If the state allocated funding amounts A3 and A4 to the larger program 1, “Bariatricity Detroit,” this would result in small changes to health outputs Q3 and Q4, specifically, smaller decreases in the rates of diabetes in obese individuals. Of note, Bariatricity Detroit is not designed for low-income, obese individuals, but rather, for individuals with insurance that will provide coverage for weight loss surgeries.At this point, the health production function shows that the most economically efficient decision for the state would be to provide funding to the smaller program which would have larger health outputs; that is, a larger decrease in diabetes rates in low-income, obese individuals.The final step in using a Health Production Function is to consider variable inputs (inputs that change depending on the level of production) and marginal outputs (the additional outputs produced by adding a unit of input) for each of the programs.
5 of 7
This question has not yet been answered.Variable Inputs
The two programs that the state can choose to provide funding for are very different in terms of their approaches and the costs associated with program expansion. Aside from funding, which is a fixed input, there are variable inputs for each program. Variable inputs must be considered because they add to the total inputs needed to achieve desired program objectives.For Bariatricity Detroit, the larger program, aside from funding which is a fixed input, the possible inputs that were defined – hospital staffing, licensing of the added facilities, surgical suite costs, bariatric surgeon costs – are variable. For example, costs related to hospital staffing of a bariatric surgery center depend on how many staff are already available in the hospital and how many new staff need to be hired.For Healthy Lifestyles Detroit, the smaller program, aside from funding which is a fixed input, the variable inputs defined were educational materials and behavioral coaches.6 of 7
HOW MIGHT MARGINAL OUTPUTS BE IMPORTANT IN YOUR COMPARISON OF BARIATRICITY DETROIT AND HEALTHY LIFESTYLES DETROIT FROM AN ECONOMIC AND OUTPUT EFFICIENCY POINT OF VIEW? CONSIDER THE HEALTH PRODUCTION CURVE FROM THE PREVIOUS QUESTION TO HELP GIVE SOME MORE CONTEXT TO YOUR RESPONSE.
This question has not yet been answered.Marginal Outputs
For Bariatricity Detroit, assume that an expansion of this program would result in a decrease in diabetes prevalence by 30 obese individuals. The marginal cost of achieving that increased benefit is $300,000.In comparison, an expansion in Healthy Lifestyles Detroit yields, as a marginal benefit, a decrease in diabetes prevalence by 20 low income, obese individuals at a marginal cost of $100,000.Dividing the marginal cost by the marginal benefit (MC/MB) yields a cost of $10,000 per individual patient the Bariatricity Detroit program and $5,000 per individual patient in Healthy Lifestyles Detroit.It is clear from such an analysis that the state should allocate funding to expand Healthy Lifestyles Detroit.
7 of 7
This question has not yet been answered.There is no single correct answer to this question, however, one process for making these types of economic and programmatic decisions could be outlined as follows:First, define and consider important aspects of the outputs and the inputs. These might include:
Next, define the relationship between inputs and outputs for each program. Keep in mind that:
Third, marginal effect on health of each of the programs should be empirically estimated.And last, to use the decision rule that resources should be allocated to those programs whose marginal benefit per dollar spent is greatest.
CRITERIA | NON-PERFORMANCE | BASIC | PROFICIENT | DISTINGUISHED |
---|---|---|---|---|
Describe the current state of a health care organization with regards to alignments to historical health care industry trends. | Does not identify the current state of a health care organization with regards to alignments to historical health care industry trends. | Identifies the current state of a health care organization with regards to alignments to historical health care industry trends. | Describes the current state of a health care organization with regards to alignments to historical health care industry trends. | Describes the current state of a health care organization with regards to alignments to historical health care industry trends. Makes explicit reference to the literature to support description of alignments. |
Explain how a health care organization needs to change to better align itself with current trends in the health care industry. | Does not describe a health care organization or current trends in the health care industry. | Describes a health care organization and describes current trends in the health care industry, but does not explain the need for change. | Explains how a health care organization needs to change to better align itself with current trends in the health care industry. | Explain how a health care organization needs to change to better align itself with current trends in the health care industry. Provides examples from the literature or best-practices that illustrate how the organization could change. |
Analyze two current programs in a health care setting with regards to the inputs required to operate and its outputs with regards to health outcome rates and patients served. | Does not describe two current programs in a health care setting. | Describes but does not analyze two current programs in a health care setting. | Analyzes two current programs in a health care setting with regards to the inputs required to operate and its outputs with regards to health outcome rates and patients served. | Analyzes two current programs in a health care setting with regards to the inputs required to operate and its outputs with regards to health outcome rates and patients served. Notes areas where more information or data could improve the analysis. |
Propose whether to reallocate, maintain, or increase funding for current programs based upon available resources and projects outputs. | Does not explain options for reallocating, maintaining, or increasing funding for programs. | Explains options for reallocating, maintaining, or increasing funding for programs, but falls short of a proposal or does not ground upon the available resources or projected outputs. | Proposes whether to reallocate, maintain, or increase funding for current programs based upon available resources and projected outputs. | Proposes whether to reallocate, maintain, or increase funding for current programs based upon available resources and projected outputs. Uses data, evidence, or the literature to justify proposal. |
Explain how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting. | Does not identify how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting. | Identifies how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting. | Explains how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting. | Explains how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting. Notes potential advantages to aligning decisions with the vision of stakeholders. |
Write following APA style for in-text citation, quotes, and references. | Writes without following APA style. | Writes mostly following APA style for in-text citation, quotes, and references, but there are lapses in style use. | Writes following APA style for in-text citation, quotes, and references. | Writes following APA style for in-text citation, quotes, and references without errors, and uses current reference sources. |
Write clearly and logically, with correct use of spelling, grammar, punctuation, and mechanics. | Writes with many errors, making text difficult to follow; errors involve spelling, grammar, punctuation, and mechanics. | Writes with few errors that can makes text difficult to follow at times; errors involve spelling, grammar, punctuation, and mechanics. | Writes clearly and logically, with correct use of spelling, grammar, punctuation, and mechanics. | Writes clearly and logically, using evidence to support a central idea, with correct use of spelling, grammar, punctuation, and mechanics; the paper contains supporting examples for the main points. |
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more
Recent Comments