Cost Benefit Analysis in Healthcare



Cost Benefit Analysis in Healthcare

Part A: Healthcare problem and healthcare promotion activity

The nature of work in organizations have modified the type of work performed, increased the number of working hours and led to increase in competition due to open markets and increased globalization. These aspects coupled with the decline in quality of life and health habits are the main causes of the increasing healthcare problems and costs in the United States. United States, in comparison to other developed nations of the world, pays too much on healthcare. The healthcare expenditure that people of the United Sates made in 2008 was a whopping $2.3 trillion, compared to $253 billion in 1990. In fact the expense in 2008 was 16.2% of GDP in 2008 and amounts to expense of $7,681 per person (www.cplpcienciassociais.org). Despite the fact that United States pays more than twice the amount on healthcare, the quality of healthcare is ranked poorest among the industrialized countries. One of the main problems facing United Sates is Obesity.

Most of the people in United States are overweight and the rate of increase is exponential. It has been reported that U.S companies in America spend more than $13 billion annually on obesity. If the current rate persists over the next 20 years, most of the states would have obesity rates in excess of 60% in adults. This is an alarming sign as increasing healthcare issues are associated with increased costs. There have been many reforms under the presidency of Obama to tackle this problem. The efforts include “Patient protection and affordable care act” and “Health Care and education reconciliation act”. Both the acts were aimed at reducing healthcare costs but many argue about the effectiveness of the programs.

Healthcare promotion programs

Healthcare promotion programs are aimed at increasing awareness among the masses so that they can better understand the implications of unhealthy habits (Dursi, 2008). The effectiveness of a promotion activity is a challenging task which can be assessed by cost benefit analysis which considers both direct and indirect factors. I would recommend the initiation of Nutrition counseling and healthcare programs. Centers can be formed where people can get advices about their health. Onsite fitness centers are the best way to ensure better health. It facilitates the supervision of individuals currently having healthcare issues and also potential candidates for healthcare issues.

Part B: Cost structure

 

Year 1

Year 2

Year 3

Variable costs ...