Essay Example on Creating a Cost Effective Eye Program: Analyzing the Benefits & Challenges

I participated in a committee for the development of an eye program proposal in a health organization. The organization had other preexisting health programs that would be affected by the new program or affect the existing ones. We, therefore, had to use the various techniques outlined below to enhance the decision analysis of the eye clinic program.

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One of the critical aspects for analysis is the cost-effectiveness in the clinic program. It is paramount to have an understanding of the charges to impose for services offered using new investment and perhaps validate the effectiveness of the program to funding organizations-also, the ability to point out weaknesses and money-loss operations in the clinic and to refine them. Unfortunately, in this case, the clinicians probably would have various roles in the hospital. Therefore the exact time and effort in the program versus other tasks in the organization are unknown.

More so, the clinic program may have to share facilities with the existing programs in the organization and therefore makes it complicated to apportion the capital expenses of the eye clinic. Hence, having in mind that the program cost is just a part of the many others in the organization, a coherent approach would need the distinction of the cost of the eye program from the other programs to make the decision (Alemi & Gustafson, 2007). However, it is not possible since each of the programs affect each other. Therefore, cost-effectiveness decision would require an evaluation that is not only based on the program alone but also costs and operations of the preexisting programs by use of decision analytic tools.

The new eye clinic program may have the cost-benefits analysis of the program happen in the future discounting current value returns. For that reason, a definition of the time frame for both the discount future revenues and cost-benefit analysis to the present values. Thus implementation of comprehensive analysis, the following steps need to be actualized in the eye clinic program; the creation of a decision trees technique for evaluating cost-Effectivenessin the eye Clinic.

A model will need formulation with a decision node that would distinguish the eye clinic and the standard care alternative. There will be an indication of the various visits of patients in the eye clinic program daily. After that, a report of the eye clinic cost incurred in terms of the personnel, materials used, structures, information system, and any other cost in undertaking the program to completion (Alemi & Gustafson, 2007).

Perhaps the eye clinic's consequence cost will be on a different decision tree with added details of the probability of the many consequences and their costs daily. Hence the cost will be discussed as the probability of the treatment and retaining of patients daily. Consequently, the implications will be addressed as the probability of the daily need for a service and the cost of different services.

Therefore a consistent analysis takes on that a patient may have an eye visit day or a hospitalization. Also, there is an inclusion of other key events that may happen as a consequence of the eye clinic visits and perhaps not to forget the situation when the significant events fail to occur. The probability tree would enable the separation of the probability of occurrence of an event and cost accompanied.

Changes in the unit cost are not likely to interfere with the analysis substantially since the values are equal for the alternatives. The national estimates technique will, therefore, be the best option for unit costs (Alemi & Gustafson, 2007). Also, a structure depicting the seamless and traditional probation in such a way that on the left is the decision and after the node is the probability of daily probation and treatment showing service utilization. The center of the tree is the outcome of the procedure and probation, which are the consequences of the eye clinic visits. Subsequently, the decision tree assumes homelessness, hospitalization, and imprisonment days will have to vary following the patient's status of probation and treatment. The right segment of the decision tree to show the costs related to each path in the tree daily.

Secondly, the probability of the daily eye clinic utilization and the various consequences estimates is essential for the analysis. The eye clinic would require to use the objective method whereby observing a large number of patients for the alternative programs already in place in the organization over time and then total the frequency of the occasions. Perhaps it would need some extra time to enable the access of many patients, and substantially follow up. Preferably the health manager may decide to inquire from an expert concerning the estimates of the gap between days to the next occurrence of an event.

Additionally, ask forecasts for the future hospitalization of a patient and the likelihood of the happening in a month. During the assessment of the objective frequencies, the daily probability of the events is essential since they will need calculation with consideration of the length of time the events occurred and follow up the total (Alemi & Gustafson, 2007). Therefore, you realize that the period of occurrence of an event will affect the probability.

The daily cost of the eye clinic will also be essential for the analysis. The calculation is done by dividing the cost of fixed and operation of existing program by sum of days patients registered to the given program in the earlier year. The organizations budget will be used to estimate the cost of buildings, supplies, human personnel and information system.

Then to the budget, we will need to add volunteer services, uncounted retirement expense, and value of the building. After the full establishment of the economic costs, the allocation of the costs to the different programs. The distribution of the costs to the programs in the budget will be done using the formula (Alemi & Gustafson, 2007):

• Eye clinic program costs in the budget category;
• Cost to the entire organization in the budget category, estimated from the budget;
• The market value of donated services or unreported capital resources in the budget category;
• Number of full-time equivalent personnel working in the program; and
• Several full-time equivalent personnel working in the entire organization.

Since some of the personnel in the program will have dual roles, it will be essential to inquire about the percentage of time they will take in the various activities, enhanced through the use of activity-based costing.

The program census is the cost of the eye service per day by estimation of the registered days. It is paramount since an error in this leads to astonishing outcomes. Therefore, it is a key factor that requires high accuracy levels. For accuracy purposes, the average of the three methods of calculating the program census will be the best. Where the first will involve the use of the enrollment dates available for both admissions and discharges.

Secondly, the clinicians in the existing programs to estimate the average panel size of the earlier month and then multiply by 365 (Alemi & Gustafson, 2007). Lastly would be checking the difference between the recent discharge and admission date of the clinician and then finding the average of the three estimate enrollments days from the three methods.

Usually, the cost of consequence rarely differs among the alternatives. Therefore, the daily cost is estimated from the regional values within which the organization location. The calculation of the expected cost of the eye clinic program is essential. It will also need the decision tree, as stated earlier. Then to calculate an estimate of the anticipated cost for the eye program will need using excel (Alemi & Gustafson, 2007). This will involve the calculation of the joint probability of the occurrences in each pathway then find the product with the total cost throughout the path.

Finally, conduction of a Sensitivity Analysis. This is essential since a lot of assumptions are made and could be wrong if conclusions are not changed. Therefore, a precise estimation of the parameter is vital since a slight change in the estimates could inverse the findings. Consequently, sensitivity analysis will enable the establishment if the assumptions are substantial for a change of conclusions (Alemi & Gustafson, 2007). For the eye clinic program, there will need to measure the statistical difference between the eye clinic program and the existing program in the organization.

In the decision analysis of the eye clinic program, there will need to articulate the confidence in the report by implementing the sensitivity analysis on single parameters, then two concurrently and finally on multiple parameters.

Therefore, by using the techniques above, we were able to separate the complex decision into parts that made it possible to make an efficient, cost-effective analysis of the eye clinic program.

Reference

Alemi, F., & Gustafson, D. H. (2007). Decision analysis for healthcare managers. Chicago: Health Administration Press. https://www.academia.edu/31569272/Decision_Analysis_for_Healthcare_Managers-Book