Reflection
Order Description
Chamberlain College of Nursing: NR-533- Financial Management in HC Org
Reflection (graded)
Class:

As we begin our lesson this week, we will reflect on some of the course content over the past several weeks, with a specific focus on cost-benefit and cost-effective analysis. Students will share and discuss the business-plan assignment that was submitted last week. Students will post their business-plan assignments again this week to seek peer input and recommendations. Last week’s content provided an overview of the development of a business plan.

This week’s graded topics relate to the following Course Outcomes, which are tied to the Program Outcomes (POs).

Evaluate variance analyses as they apply to nursing budgets within healthcare organizations. (PO 4)
Formulate and evaluate a business plan for a healthcare organization. (po4)
Dr. Welling
What specific knowledge of financial management in healthcare organizations, that you gained through this experience, will be most important as you take on your future nurse-executive role?

Cost Benefit
As we begin our lesson this week, we will reflect on some of the course content over the past several weeks, with a specific focus on cost-benefit and cost-effective analysis. Students will share and discuss the business-plan assignment that was submitted last week. Students will post their business-plan assignments again this week to seek peer input and recommendations. Last week’s content provided an overview of the development of a business plan.
Resources in healthcare have been reduced over time. Therefore, it is prudent for a healthcare organization to question if a certain program or service is sufficiently financially beneficial to continue to provide. A cost-benefit analysis (CBA) assists healthcare decision makers to evaluate and determine the relative costs and benefits associated with a particular project or task (Finkler, Jones, & Kovner, 2013). The purpose of performing a CBA is to allow decision makers to review similar interventions by comparing them in economic terms and to determine if the project or task is worth pursuing.
For example, if Saint Louis Medical Center was considering opening a new cardiac-care center, the cost-benefit analysis would help in determining the financial impact and the return on investment or the profitability of the project. After subtracting the total costs from the expected total benefits, you determine the overall cost benefit.
Cost Benefit (CB) = Benefit (B) – Cost (C)
Healthcare providers are routinely challenged to choose a variety of ways to deliver the most effective health outcomes in the most cost-efficient manner. Cost-benefit analyses and their use in healthcare organizations are becoming a daily routine in the formal and informal decision-making processes.
As a healthcare leader, you may be asked to do a cost-benefit analysis. This means you will consider the benefits and costs of completing a project to determine if the project would be feasible for the organization.
Purpose of CBA
As you complete the readings and assignments for this week, consider the following questions:
a. Decision-making tool for making change?
b. Promotes efficient resource allocation?
c. Allows the job to be done properly?
d. Develops an appropriate budget?
e. Ensures thattimeframes are realistic?
An example of a cost-benefit analysis is when a school of nursing must decide between financing a career expo for undergraduate nursing students considering enrolling in a graduate nursing program or funding an educational session for practicum mentors. The two events have a different purpose; however, the school of nursing can only financially support one or the other. A cost-benefit analysis of both events can help the decision makers chose which event to fund.
Cost Effectiveness
There are three categories of costs that are included in a cost-benefit analysis: the costs for health services, costs to patients and their families, and external costs to society.
Cost for health services may include payments for hospital services, home-health visits, medical supplies, and medications. These are the direct costs of providing healthcare. Some variability with direct costs may include healthcare-provider services, supplies, and medication-related costs.
Direct costs that do not typically vary include capital expenses, such as buildings and equipment, which are utilized whether there are patients in the facility or it is unoccupied.
Many public programs may inadvertently impose external costs to society. For example, public-safety recommendations mandating car seats for children of a certain age can increase the demand by society for car seats and cause increased production and, generally, the cost of these items due to the public demand, causing an overall increased cost to society.
A cost-effectiveness analysis is defined as a comparison of one item to another item to determine if one of the two is more cost effective (Finkler, Jones, and Kovner, 2013). The cost-effectiveness analysis includes the cost of a treatment or intervention as well as the proposed benefits to the outcome. Measurement of the benefits is typically in units such as the number of years gained or the number of cases avoided. An example would be to compare elderly persons who received the annual flu vaccine compared to those who did not and their incidence of illness or death. The outcomes of this example would include the number of cases prevented and the number of deaths prevented.
Cost effectiveness can also be used to evaluate programs with similar or the same objectives to determine the overall financial benefit to the consumer. For example, the advance practice nurse and a physician can provide routine healthcare, but the costs and effectiveness may be different to the consumer.
Summary
This week, we reflected on some of the course content over the past several weeks, specifically sharing and discussing the business-plan assignment and providing feedback to peers. In addition, we reviewed the concepts of cost-benefit and cost-effectiveness analysis.

References
Finkler, S., Jones, C., & Kovner, C. (2013). Financial management for nurse managers and executives. (4th ed.). St. Louis, MO: Saunders.
• Chapter 18: Benchmarking, Productivity, and Cost-Benefit and Cost-Effectiveness Analysis
Required Article:
Zengin, S., Güzel, R., Al, B., Kartal, ?., Sarcan, E., & Y?ld?r?m, C. (2013). Cost analysis of a university hospital’s adult emergency service. Journal Of Academic Emergency Medicine, 12(2), 71–75. doi:10.5152/jaem.2013.030

Page or paragraph numbers must be included with quotes per APA. See APA re how to format references and in-text citations i.e. capitalization issues and use of the ampersand versus the word (“and”).
Including at least one in-text citation and matching reference.
Check for grammar and spellings