12 Feb Cost–Benefit Analysis

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Assignment Details

Reimbursements and cost–benefit analysis are ways to compare the costs and benefits of an intervention, where both are expressed in monetary units. (CDC, n.d.)

Cost–Benefit Analysis

1. Monetary Valuation

The analysis estimates that the following benefits are worth $140 billion:

Direct medical costs averted

Valuation of quality of life gained due to non-fatal heart attacks averted

Valuation of life years gained due to fatal heart attacks averted

Next, the analysis estimates that costs to the industry and consumers are $6 billion.

2. Calculation of Net Benefits

$140 billion in benefits minus $6 billion in costs equals $134 billion in net benefits. Therefore, benefits minus costs equals net benefits.

Net benefit = Benefits – costs

= $140 – $6

= $134 billion

Part A. Monetary Valuation

The analysis estimates that the following benefits are worth $200 billion:

Direct medical costs averted

Valuation of quality of life gained due to non-fatal heart attacks averted

Valuation of life years gained due to fatal heart attacks averted

Next, the analysis estimates that cost to the industry and consumers is $17 billion.

Calculate the net benefits.

What does the value tell you as an administrator relative to the benefit of the procedure?

Reimbursement methods

Part B. Answer the following questions:

What are the various reimbursement methods used by third-party payers?

What incentives are given to providers under each of these reimbursement protocols?

How do these reimbursement methods impact the delivery of health services?

What is capitation?

What are the advantages and disadvantages of each of these reimbursement methods?

Solve the problem in Part A, and write a 5-page analysis in response to the questions in Part B. Cite at least 5 references in APA format.