Description
The factors of cost containment and quality of care are important elements in any discussion of managed health care. Any examination of those factors can elicit an emotional response rather than an objective analysis of the impact of these issues on the ability to continue care. For example, many hospital administrators justify their costs because they must account for legal issues related to malpractice costs, the adoption of innovative technology, and the need to consider uninsured patients who require care. These are only a few factors that pose challenges; and as a health care leader, it is important to have cost containment options to address these and similar factors.
For you to fully understand this concept, develop an analytical paper that examines three (3) cost containment options. Be sure to create tables and/or graphs to support your ideas. Address the following in your paper:
- Analyze and give examples of three cost containment options.
- Critique the advantages and disadvantages of each of the three options.
- Relate each cost containment option to quality of care.
Support your paper with a minimum of five scholarly peer-reviewed sources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7 pages, not including title and reference pages, plus tables and/or graphs
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Explanation & Answer
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Running head: COST CONTAINMENT
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Cost Containment
Name
Institution Affiliation
COST CONTAINMENT
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Cost Containment
Cost containment remains to be a practice that ensures that there is the maintenance of
the expense levels to prevent unnecessary spending. Additionally, their aim is to make sure that
there is increasing the profitability of the organization without long-term damaging the
functioning of the company. Rather than waiting for expenses to be extremely high, there is the
need of coming up with effective strategies of cost- containment measures that keep the expenses
low. In the healthcare, management ensures that there is the reduction of the expenses of the
health care and ensuring that there is the provision of effective healthcare to the patients
(Mossialos & Le Grand, 2009).
Examples of cost containment
Some of the cost containment in the healthcare include budget shifting, budget setting
and at the same time, cost control. The most common method of reducing the expenditure of the
healthcare is ensuring that there is shifting to the other budget. The expenditure of the healthcare
can be shifted on the patient either introduction of charges or co-payments and directly to use the
medical services. Therefore, through budget shifting, there is the likelihood that the healthcare
practitioners will be in a position of reducing the expenses of the health care and be able to
provide effective services to the patients.
Additionally, there is the budget set, which ensures that there are setting specific goals
and objectives and be able to develop a plan to achieve them. Traditionally, most of the health
services providers have worked without the existence of the budget. Therefore, all the relevant
agents operated in the situation that they were an ex- post system of reimbursement. In such a
system, the hospitals and at the same time, doctors worked in a fee for service basis. There was
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the provision of treatment to the patients and sending the payment of the treatment depending on
the insurer. However, if the insurer had limited amount to cover the bills, there was the creation
of levies on the population it covered by raising premiums or through raising the contribution
rates. Therefore, such methods have increased problems, and there is the need of setting a
budget, which can be utilized in governing the healthcare (Davis, 2000).
Additionally, there is the need of controlling cost, which is an initiative that majorly
focuses on the reduction of expenses through the methods of lowering the costs, conserving
necessary resources in the health department. The aim of controlling the cost is to ensure that the
healthcare providers can survive during the hard times of the economy. This can be done through
insurers in trying to affect care costs through controlling the way in which providers supply
healthcare. Fees and payments, which are made to the providers, can be controlled and the prices
of pharmaceuticals and other medical supplies can be regulated. Therefore, there is the need of
controlling the cost in the department of healthcare all the time, with the aim of ensuring that
there is the provision of quality health to the patients.
Advantages and disadvantages
Shifting of budgets can be either advantageous or disadvantageous depending on how it
is capitalized. For example, when there is budget shifting, there is the co-payment, which have
advantages and disadvantages. One of its advantages includes the reduction of the costs of
treatment through prevention of frivolous uses of the health services. Additionally, when there is
the involvement of budget shifting, there is the likelihood that the concerned individuals will be
able to further the health insurance to cover the cost effectively. However, some of the
disadvantages of budget shifting include. Firstly, the payments seem to be much low thus
discouraging its use.
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Additionally, some...