NURS 6211: Finance and Economics in Health Care Delivery | Week 7

You have just been informed that the administrative offices at the university have proposed eliminating your clinic to reduce costs and instead are considering outsourcing student health services to a local urgent care center. You feel this is a huge mistake and would negatively impact students’ ability to access health care. In order to convince those in the administration to keep your clinic running, you must make a compelling case as to your high level of performance. What types of information would you use to make your case? Effective organizations track key performance indicators to monitor progress. What key indicators would demonstrate the success of your clinic?

This week you examine performance reports and how they can be used in financial decision making.

 

Learning Objectives – NURS 6211:Week 7: Performance Measurements and Dashboards Paper

Students will:

• Assess performance based on performance reports
• Analyze performance indicators in health care organizations
• Evaluate the types of information to include in financial dashboards

Learning Resources

Note: To access this Week’s required library resources, please click on the link to the Course Readings List, found in the Course Materials section of your Syllabus.

Required Readings

Baker, J. J., Baker, R. W., & Dworkin, N. R.  (2018). Health care finance: Basic tools for nonfinancial managers (5th ed.). Burlington, MA: Jones and Bartlett Learning.

• Chapter 12, “Financial and Operating Ratios as Performance Measures” (pp. 127-134)This chapter introduces a number of different tools that can be used to measure the performance of an organization. These include liquidity ratios, solvency ratios, and profitability ratios.

Kleinpell, R. M. (2009). Analyzing economic outcomes in advanced practice learning. In Outcome assessment in advanced practice nursing (2nd ed.). New York, NY: Springer Publishing Company.

This chapter outlines five different types of economic outcomes that can be used by advanced practice nurses for assessing costs and determining performance benefits within a health care organization.

Serb, C. (2011). Effective dashboards: What to measure and how to show it. Hospitals & Health Networks, 85(6), 40.

In this article, the authors discuss automated systems known as executive dashboards, which are designed to highlight key data. Additionally, the article describes the components most experts agree should be included on an executive dashboard.

Nash, M., Pestrue, J., Geier, P., Sharp, K., Helder, A., & McAlearney, A. (2010). Leveraging information technology to drive improvement in patient satisfaction. Journal for Healthcare Quality: Promoting Excellence in Health care, 32(5), 30–40.

This article explores how senior leaders can facilitate improvement in patient experience and satisfaction by strategic improvement and setting goals. This article presents a case detailing how the Ohio State University Medical Center (OSUMC) used information technology to formulate a strategy to improve patient experience.

Barta, A. (2010). Dashboards: A required business management tool. Biomedical Instrumentation & Technology, 44(3), 228–30.

This article describes how dashboards became an integral financial and management tool for Trinity Health Clinical Engineering when it centralized the clinical engineering functions of five hospitals.

National Database of Nursing Quality Indicators. (2014). National Database of Nursing Quality Indicators. Retrieved from NDNQI :http://www.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Volume122007/No3Sept07/NursingQualityIndicators.html

This website is a repository for nursing quality indicators.

Wadsworth, T., Graves, B., Glass, S., Harrison, A., Donovan, C., & Proctor, A. (2009). Using business intelligence to improve performance. Healthcare Financial Management, 63(10), 68–72.

In this article, the authors describe a case study involving the Cleveland Clinic Foundation’s management supervision and how they kept track of its key performance indicators (KPIs) to aid in reducing operational costs and improving quality of care.

Required Media

Laureate Education (Producer). (2012). Dashboards. Baltimore, MD: Author.

Note: The approximate length of this media piece is 6 minutes.

In this video, William Ward discusses the use of dashboards as a tool for tracking organizational performance. He compares different types of dashboards and describes how to select the most relevant data to include on a dashboard.

Performance Reports/Dashboards Discussion Paper

Performance reports are a valuable tool for gauging the financial well-being and progress of a health care organization. When properly designed, these reports can provide data on key measures, quality indicators, performance of operations, patient satisfaction, personnel, and facility capacity.

Have you ever seen the cockpit of an airplane? The dashboard is covered with a variety of knobs and gauges. Having a pilot who understands the meaning of the data contained on the dashboard is essential for passenger safety and for reaching the correct destination in a timely fashion. Similarly, a dashboard for your organization can supply a wide variety of performance information to assist in the financial decision making process.

In this Discussion, you will describe a dashboard that would be useful for you in your current position and organization (or one with which you are familiar).

To prepare:

• Review this week’s Media program, Dashboards.
• Consider your own organization (or one with which you are familiar) and the key information that would be useful for decision making.
• Develop a list of key performance indicators in the following categories that would be useful for your situation. Include:
  • 2–3 financial indicators
  • 2–3 operational indicators
  • 2–3 satisfaction indicators
  • 2–3 quality indicators

By Day 3 Performance Reports/Dashboards Discussion Paper

Post describe the specific indicators you selected for each category and explain why you chose those particular ones. Describe whether each indicator is a leading or trailing indicator and how this particular combination would provide the best overall view of the state of your organization. Assess how having a dashboard such as this would assist in decision making.

Note: You do not have to actually create the dashboard, but just describe the indicators you would include.

Read a selection of your colleagues’ responses.

By Day 6

Respond to at least two of your colleagues on two different days using one or more of the following approaches:

• Ask a probing question, substantiated with additional background information, evidence or research.
• Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.
• Expand on your colleagues’ postings by providing additional insights or contrasting perspectives based on readings and evidence. Performance Reports/Dashboards Discussion Paper

 

 

 

ADDITIONAL INFORMATION 

Finance and Economics in Health Care Delivery

Introduction

The health care system is a complex web of people, institutions, and processes. It’s also an economic system that relies on the decisions we make about how to provide care. In this article, we’ll explore some of the key economics concepts that can help improve the way we deliver health care.

Economic Efficiency: Marginal Analysis

Marginal analysis is a way to determine the most efficient use of resources. For example, if you need to buy 100 units of widget X for $1 each and get 200 widgets out of each unit, you can use marginal analysis to determine whether it’s better to buy 10 units or 20 units.

Marginal Analysis helps you decide whether it’s worth buying one more unit just so that your total cost per widget is lower than what it would be without any additional purchases (i.e., no incremental production). It also helps you decide whether renting an extra machine or two could provide benefits by providing access at higher rates than if there were only one machine available at that location—for example, if rent on these machines will eventually be less than what they cost now but still provide value beyond just being able to access them whenever needed rather than having them sitting idle until someone needs them again (eBay).

Opportunity Costs

Opportunity cost is the cost of the best alternative that must be given up. While opportunity cost can be financial, it also includes time and other resources. For example, if a student decides to study abroad instead of taking classes at his campus, he has already lost out on several courses and opportunities for interaction with classmates that would have been available during those periods.

The idea behind opportunity costs is simple: you should choose your options so that you can get more out of them than what they cost you in terms of money or time (or both).

Cost-Benefit Analysis

Cost-benefit analysis is a method to measure the costs and benefits of health care interventions. It involves calculating how much better off people will be as a result of an intervention, considering both disease incidence and death rates.

The main benefit of cost-benefit analysis is that it can help identify which interventions are worthwhile investments in terms of improving population health. For example, if someone develops an illness or dies because they don’t have access to certain medical services or products, this may lead them to support further investment in those areas where there are clear benefits. In some cases, however – such as when we’re talking about treating disease with expensive drugs – there may not be sufficient data on whether these interventions have any effect at all on mortality rates or other outcomes (such as quality-of-life).

Externalities and Public Goods

The concept of externalities is an important one in health care. Externalities can be positive or negative, depending on whether they benefit society as a whole or not. Positive externalities are called public goods and include things like fresh air, clean water, and sound health care systems. Public goods have two properties: non-rivalrous and non-excludable. Non-rivalrous means that one person’s use of a public good does not reduce the amount available for others; it’s impossible to exclude someone from using something once it has been produced (or created). Non-excludable means that there’s no way of telling who should pay for what part of something – like how much you’re paying in taxes towards keeping up roads versus how much someone else pays in taxes towards keeping up roads too!

Economics and finance have a lot to contribute to health care delivery.

The health care industry is a service industry, like any other. Economics and finance have a lot to contribute to the delivery of health care services. It’s not just about doctors, nurses and hospitals; it’s also about insurance companies, pharmaceutical companies and drug manufacturers.

The economic factors that influence how people use drugs are often overlooked by those who think they know everything about medicines. For example: how much do you pay per pill or capsule? How much does it cost when you run out of your prescription before the end of its shelf life (when most pills become ineffective)? What happens if someone else has taken your medication before yours was finished being dispensed at the pharmacy counter?

Conclusion

We hope that this article has opened your eyes to the possibilities of economics and finance in health care delivery! We’ve covered a lot of ground here, but we can’t cover everything. We encourage you to expand your knowledge and explore these topics further on your own time—or find someone else who is equally curious about them.