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Health Production Analysis

Health Production Analysis

Health Production Analysis

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Instructions

This assessment has three main parts:

1. The first part is your examination of the organization’s current practices and alignments with historical health care trends, as well as how the organization needs to change to align itself with current and emerging trends.

2. The second part is your analysis of two existing programs that could be candidates for further investment

(Note: You may use two program examples from your textbook, your own research, or your own organization as the context for your analysis and this executive summary.).

3. The third part is your proposal on how to allocate resources for the two programs, as well as a brief

explanation of how the views of the stakeholders influenced your decision making project.

If you have not already, it may be helpful to complete the formative activity to check your understanding of the economic concepts relevant to this assessment. Health Production Analysis

Economic Elements in Health Care | Transcript.

Consult the scoring guide to make sure you are meeting the communication criteria and achieving your desired rubric level.

Part I: Current State of Organization and Potential Changes to Align with Trends

Describe the current state of a health care organization with regards to alignments to historical health care industry trends. (Competency 1)

For this, use either an organization that you currently or previously had worked for, have researched as an organization you would like to work for in the future, or one that was present in the textbook or other research you conducted.

Explain how a health care organization needs to change to better align itself with current trends in the health care industry. (Competency 1)

Continue using the organization that you described to meet the first scoring guide criteria.

Part II: Analysis of Current Programs

Analyze two current programs in a health care setting with regards to the inputs required to operate and its outputs with regards to health outcome rates and patients served. (Competency 3)

As noted in the instructions above, you may use program examples from your textbook, your own

research, or your own organization. Be sure you choose examples for which you can report the inputs,

outputs, and approximate patients served.

Part III: Resource Allocation and Stakeholder Reflections

Propose whether to reallocate, maintain, or increase funding for current programs based upon available

resources and projects outputs. (Competency 4)

Use the two programs you analyzed in Part II. It will be helpful to cite evidence (literature, your

textbook, or current health improvement initiatives [like those being pursued via your state’s

Department of Health] to help support your proposals. Health Production Analysis

Explain how opinions and agendas of stakeholders influence decisions related to the funding of programs in a

health care setting. (Competency 4) Health Production Analysis

Make explicit reference to the stakeholders and their statements in the Scenario section for this

assessment, or to specific examples from your current or former career experiences.

Economic Elements in Healthcare

Determining the Allocation of Resources for Two Programs Using the Health Production Function

The purpose of a production function is to analyze inputs (i.e., funding and resources) and outputs (i.e., improved health) to identify the least costly combination of inputs to achieve the desired output.

This media piece shows how the health production function can help healthcare leaders make resource allocation decisions to help achieve economically efficient objectives of healthcare services programs.

In Detroit, there are two state-funded healthcare services programs with the goal of reducing diabetes prevalence rates in obese individuals with low income living in impoverished areas within the city. The State of Michigan has funding available to make two payments one month apart, and would like to choose only one of these programs in which to invest funding for the program’s expansion. The state wishes to make the most economically efficient decision to improve the health of the most people in need. Health Production Analysis

Program 1: “Bariatricity Detroit” is a large program with a strategic objective to establish additional Bariatric Surgery Centers in selected hospitals for obese patients with diabetes to undergo bariatric weight loss surgeries.

Program 2: “Healthy Lifestyles Detroit” is a small program with a strategic objective to increase education and coaching focused on healthy eating, lifestyle and behavioral change and increased physical activities for low-income, obese individuals with diabetes.

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The first step in using a Health Production Function is to define inputs and outputs:

What are the desired outputs (or objective) to be achieved for each program? For the state?

This question has not yet been answered.

Outputs (or objectives) are the results, or goals, you are trying to achieve. Looking at the case study, the following are generally what each program and the state of Michigan are trying to achieve.

  • Program 1 objective = Establish additional Bariatric Surgery Centers in selected hospitals to provide weight loss surgery to obese individuals with diabetes.
  • Program 2 = Increase education and coaching focused on healthy eating, lifestyle and behavioral change and increased physical activities for low-income, obese individuals with diabetes.
  • State program goals = Reduce diabetes rates in obese individuals with low income living in impoverished areas within the city. Make the most economically efficient decision to help the most people in need.

What are the possible inputs needed for establishing Bariatric Surgery Centers?

This question has not yet been answered.

Inputs are the resources that are needed to operate a given program or service. Some example of inputs that would be required to establish and operate the Bariatric Surgery Center for Program 1 would be:

  • Funding
  • Hospital Staffing
  • Licensing of the added facilities
  • Surgical suite costs
  • Bariatric surgeon costs

What are the possible inputs needed for establishing Bariatric Surgery Centers?

This question has not yet been answered.

Again, inputs are the resources needed to operate a program or service. Some of the resources needed to increase the capacity of Program 2 are:

  • Funding
  • Education materials
  • Behavioral coaches

The second step in using a Health Production Function is to define the relationship between the output (goal or objective) to be achieved and the inputs (i.e., funding and resources) are available to work towards achieving each program’s defined objectives. Health Production Analysis

This diagram shows that the relationship between a program’s inputs and outputs is curvilinear. When a program is relatively small, additional inputs devoted to that program (A1 and A2) are likely to result in relatively large increases in the program’s output. As additional resources are allocated to that program, the total output will continue to increase, but at a more gradual rate. If a program is relatively large, additional inputs devoted to that program (A3 and A4) are likely to result in small increases in the program’s output (Q3 and Q4). Finally, increases in output for both programs will become negligible even though the program’s inputs may continue to increase.

According to the Health Production Function, there is a law of diminishing returns to consider when making funding allocation decisions. Funding is referred to as a fixed input, because the state can only provide funding of the same amount two times.

In the example health production curve, consider A1/Q1 and A2/Q2 to be the Healthy Lifestyle Detroit Program and A3/Q3 and A4/Q4 to be Bariatricity Detroit. For the two programs in Detroit, how does the Health Production Function and the law of diminishing returns work?

This question has not yet been answered.

There is no single right answer for this, but below are a number of points to consider when analyzing the graph, the health production function, and law of diminishing returns.

If the state allocated funding amounts A1 and A2 to the smaller program 2, “Healthy Lifestyles Detroit,” this would result in large changes to health outputs Q1 and Q2, specifically, larger decreases in the rates of diabetes in low income, obese individuals.

If the state allocated funding amounts A3 and A4 to the larger program 1, “Bariatricity Detroit,” this would result in small changes to health outputs Q3 and Q4, specifically, smaller decreases in the rates of diabetes in obese individuals. Of note, Bariatricity Detroit is not designed for low-income, obese individuals, but rather, for individuals with insurance that will provide coverage for weight loss surgeries.

At this point, the health production function shows that the most economically efficient decision for the state would be to provide funding to the smaller program which would have larger health outputs; that is, a larger decrease in diabetes rates in low-income, obese individuals.

The final step in using a Health Production Function is to consider variable inputs (inputs that change depending on the level of production) and marginal outputs (the additional outputs produced by adding a unit of input) for each of the programs.

Of your previously defined inputs, which would be considered variable inputs for each of the two programs and why?

This question has not yet been answered.

Variable Inputs
The two programs that the state can choose to provide funding for are very different in terms of their approaches and the costs associated with program expansion. Aside from funding, which is a fixed input, there are variable inputs for each program. Variable inputs must be considered because they add to the total inputs needed to achieve desired program objectives.

For Bariatricity Detroit, the larger program, aside from funding which is a fixed input, the possible inputs that were defined – hospital staffing, licensing of the added facilities, surgical suite costs, bariatric surgeon costs – are variable. For example, costs related to hospital staffing of a bariatric surgery center depend on how many staff are already available in the hospital and how many new staff need to be hired.

For Healthy Lifestyles Detroit, the smaller program, aside from funding which is a fixed input, the variable inputs defined were educational materials and behavioral coaches.

When the costs of increasing a program’s size are not equal, the comparison cannot simply be made between the changes in output of the two programs. The relevant criterion for allocating resources to programs having different benefits and costs is to select those programs whose marginal benefit per dollar spent is greatest (Feldstein, 2012).

How might marginal outputs be important in your comparison of Bariatricity Detroit and Healthy Lifestyles Detroit from an economic and output efficiency point of view? Consider the health production curve from the previous question to help give some more context to your response.

This question has not yet been answered.

Marginal Outputs
For Bariatricity Detroit, assume that an expansion of this program would result in a decrease in diabetes prevalence by 30 obese individuals. The marginal cost of achieving that increased benefit is $300,000.

In comparison, an expansion in Healthy Lifestyles Detroit yields, as a marginal benefit, a decrease in diabetes prevalence by 20 low income, obese individuals at a marginal cost of $100,000.

Dividing the marginal cost by the marginal benefit (MC/MB) yields a cost of $10,000 per individual patient the Bariatricity Detroit program and $5,000 per individual patient in Healthy Lifestyles Detroit.

It is clear from such an analysis that the state should allocate funding to expand Healthy Lifestyles Detroit.

Conclusion

When making a decision about allocating funding and resources, what are the steps you should be taking and the types of information you should be considering to drive and justify your choices?

This question has not yet been answered.

There is no single correct answer to this question, however, one process for making these types of economic and programmatic decisions could be outlined as follows:

First, define and consider important aspects of the outputs and the inputs. These might include:

  • specific population group whose health is to be affected
  • goals of stakeholders
  • objectives of programs
  • desired outcomes and/or results
  • costs associated with each program
  • variable and fixed inputs needed to expand each program

Next, define the relationship between inputs and outputs for each program. Keep in mind that:

  • the relationship is curvilinear
  • there is a law of diminishing returns
  • the smaller program will have larger outputs initially
  • the larger program will have smaller outputs initially

Third, marginal effect on health of each of the programs should be empirically estimated.

And last, to use the decision rule that resources should be allocated to those programs whose marginal benefit per dollar spent is greatest. Health Production Analysis

Unformatted Attachment Preview

5/6/2020 Assessment 1 Instructions: Health Production Function – … Course Navigation  Tutorials Christopher Miller Support Log Out FACULTY  Alyssa Seehafer Rachel Beltran Cardoso COACH 1  Assessment 1 Instructions: Health Production Function Write a 2-4-page executive summary recommending resource investment in a program based on its potential to deliver positive health and economic outcomes. As a health care professional, you must have a foundational, high-level understanding of health care economics: One part of this foundation comes from understanding: The basic laws of economics as they apply to the health care industry. How the health care system creates unique economic challenges and burdens on all stakeholders. Another part of this foundation comes from understanding: The history and trends in health care economics around such topics as the role of the government and government programs such as Medicare and Medicaid. Trends in patient payments. The resulting changes in health care expenditures, as well as areas for improvement in the health care system (Feldstein, 2012). Health Production Analysis
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Another key is understanding the concepts and processes involved in the production of health care: Multiple inputs influence health and wellness. Medical care is only one input, although a significant one. The health production function and decision rules for allocating health care resources is a key component of the first assessment in this course. For this assessment, think about the ways in which health production efficiency, both technical and economical, can help drive decisions on the allocation of resources (inputs) to drive improved patient health and results (outcomes) (Feldstein, 2012). Reference Feldstein, P. J. (2012). Health care economics (7th ed.). Clifton Park, NY: Delmar. Demonstration of Proficiency By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria: Competency 1: Analyze historical perspectives and current trends in the health care industry. Describe the current state of a health care organization with regards to alignments to historical health care industry trends. Explain how a health care organization needs to change to better align itself with current trends in the health care industry. Competency 3: Analyze the evolving economic reimbursement trends, methods, and technology. Analyze two current programs in a health care setting with regards to the inputs required to operate and its outputs with regards to health outcome rates and patients served. Competency 4: Analyze how economic and stakeholder influences affect operational planning and decision making. Propose whether to reallocate, maintain, or increase funding for current programs based upon available resources and projects outputs. Explain how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting.
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https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_251840_1&content_id=_8770976_1&mode=view 1/3 5/6/2020 Assessment 1 Instructions: Health Production Function – … Competency 5: Communicate in a manner that is scholarly, professional, and respectful of the diversity, dignity, and integrity of others and is consistent with expectations for health care professionals. Write following APA style for in-text citation, quotes, and references. Write clearly and logically, with correct use of spelling, grammar, punctuation, and mechanics. Professional Context The ability to research, examine, and determine the most efficient ways to allocate resources in order to produce to best health outcomes is a key competency for health care economic professionals. In the complex field of health care, there will always be multiple ways and multiple programs in which an organization can invest resources. It is the health care economics professional’s responsibility to examine the cost of the inputs in comparison to the historic or projected output of health and then make recommendations regarding investment. Looking at investment is not always entirely about the amount of positive outputs—technical efficiency, economic efficiency, and stakeholder priorities will all also play a part (Feldstein, 2012). Health Production Analysis
Being able to not only understand and crunch the numbers, but also navigate these other considerations, is vital in becoming an effective health care economics professional. Scenario You are a health care economics professional with specific expertise in using a health production function to allocate resources. A member of the Board of Directors has asked you to prepare an executive summary that will help the board understand the current practices of the organization and where the organization should align itself in light of current and emerging trends. Health Production Analy
Additionally, you have been asked to analyze the inputs and outputs of two current programs in the organization in order to make allocation recommendations about how to best utilize the available resources to achieve the best possible outputs for the programs. Instructions This assessment has three main parts: 1. The first part is your examination of the organization’s current practices and alignments with historical health care trends, as well as how the organization needs to change to align itself with current and emerging trends. 2. The second part is your analysis of two existing programs that could be candidates for further investment (Note: You may use two program examples from your textbook, your own research, or your own organization as the context for your analysis and this executive summary.). 3. The third part is your proposal on how to allocate resources for the two programs, as well as a brief explanation of how the views of the stakeholders influenced your decision making project. If you have not already, it may be helpful to complete the formative activity to check your understanding of the economic concepts relevant to this assessment. Economic Elements in Health Care | Transcript. Consult the scoring guide to make sure you are meeting the communication criteria and achieving your desired rubric level. Part I: Current State of Organization and Potential Changes to Align with Trends Describe the current state of a health care organization with regards to alignments to historical health care industry trends. (Competency 1)
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https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_251840_1&content_id=_8770976_1&mode=view 2/3 5/6/2020 Assessment 1 Instructions: Health Production Function – … For this, use either an organization that you currently or previously had worked for, have researched as an organization you would like to work for in the future, or one that was present in the textbook or other research you conducted. Explain how a health care organization needs to change to better align itself with current trends in the health care industry. (Competency 1) Continue using the organization that you described to meet the first scoring guide criteria. Part II: Analysis of Current Programs Analyze two current programs in a health care setting with regards to the inputs required to operate and its outputs with regards to health outcome rates and patients served. (Competency 3) As noted in the instructions above, you may use program examples from your textbook, your own research, or your own organization. Be sure you choose examples for which you can report the inputs, outputs, and approximate patients served. Part III: Resource Allocation and Stakeholder Reflections Propose whether to reallocate, maintain, or increase funding for current programs based upon available resources and projects outputs. (Competency 4) Use the two programs you analyzed in Part II. It will be helpful to cite evidence (literature, your textbook, or current health improvement initiatives [like those being pursued via your state’s Department of Health] to help support your proposals.
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Explain how opinions and agendas of stakeholders influence decisions related to the funding of programs in a health care setting. (Competency 4) Make explicit reference to the stakeholders and their statements in the Scenario section for this assessment, or to specific examples from your current or former career experiences. Additional Requirements Written Communication: Prepare an executive summary free of errors that detract from the overall message. Writing must be clear, precise, and scholarly, with concepts that flow in a logical order. References: Cite at least three references from peer-reviewed journals, in addition to your text. Length: Submit a 2–3-page executive summary, not including any title or reference page. APA: Use correct APA style and formatting. You may find it helpful to use the following: APA Style Paper Tutorial [DOCX]. APA Style Paper Template [DOCX]. APA Style and Format. SCORING GUIDE Use the scoring guide to understand how your assessment will be evaluated. VIEW SCORING GUIDE  https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp? Health Production Analysiscourse_id=_251840_1&content_id=_8770976_1&mode=view 3/3 Economic Elements in Healthcare Determining the Allocation of Resources for Two Programs Using the Health Production Function The purpose of a production function is to analyze inputs (i.e., funding and resources) and outputs (i.e., improved health) to identify the least costly combination of inputs to achieve the desired output. This media piece shows how the health production function can help healthcare leaders make resource allocation decisions to help achieve economically efficient objectives of healthcare services programs. In Detroit, there are two state-funded healthcare services programs with the goal of reducing diabetes prevalence rates in obese individuals with low income living in impoverished areas within the city. The State of Michigan has funding available to make two payments one month apart, and would like to choose only one of these programs in which to invest funding for the program’s expansion. Health Production Analysis
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The state wishes to make the most economically efficient decision to improve the health of the most people in need. Program 1: “Bariatricity Detroit” is a large program with a strategic objective to establish additional Bariatric Surgery Centers in selected hospitals for obese patients with diabetes to undergo bariatric weight loss surgeries. Program 2: “Healthy Lifestyles Detroit” is a small program with a strategic objective to increase education and coaching focused on healthy eating, lifestyle and behavioral change and increased physical activities for low-income, obese individuals with diabetes. The first step in using a Health Production Function is to define inputs and outputs: What are the desired outputs (or objective) to be achieved for each program? For the state? This question has not yet been answered. Outputs (or objectives) are the results, or goals, you are trying to achieve. Health Production Analysis
Looking at the case study, the following are generally what each program and the state of Michigan are trying to achieve. • • • Program 1 objective = Establish additional Bariatric Surgery Centers in selected hospitals to provide weight loss surgery to obese individuals with diabetes. Program 2 = Increase education and coaching focused on healthy eating, lifestyle and behavioral change and increased physical activities for low-income, obese individuals with diabetes. State program goals = Reduce diabetes rates in obese individuals with low income living in impoverished areas within the city. Make the most economically efficient decision to help the most people in need. What are the possible inputs needed for establishing Bariatric Surgery Centers? This question has not yet been answered. Inputs are the resources that are needed to operate a given program or service. Some example of inputs that would be required to establish and operate the Bariatric Surgery Center for Program 1 would be: • • • • • Health Production Analysis
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Funding Hospital Staffing Licensing of the added facilities Surgical suite costs Bariatric surgeon costs What are the possible inputs needed for establishing Bariatric Surgery Centers? This question has not yet been answered. Again, inputs are the resources needed to operate a program or service. Some of the resources needed to increase the capacity of Program 2 are: • • • Funding Education materials Behavioral coaches The second step in using a Health Production Function is to define the relationship between the output (goal or objective) to be achieved and the inputs (i.e., funding and resources) are available to work towards achieving each program’s defined objectives. This diagram shows that the relationship between a program’s inputs and outputs is curvilinear. When a program is relatively small, additional inputs devoted to that program (A1 and A2) are likely to result in relatively large increases in the program’s output. As additional resources are allocated to that program, the total output will continue to increase, but at a more gradual rate. If a program is relatively large, additional inputs devoted to that program (A3 and A4) are likely to result in small increases in the program’s output (Q3 and Q4). Finally, increases in output for both programs will become negligible even though the program’s inputs may continue to increase. Health Production Analysis
.
According to the Health Production Function, there is a law of diminishing returns to consider when making funding allocation decisions. Funding is referred to as a fixed input, because the state can only provide funding of the same amount two times. In the example health production curve, consider A1/Q1 and A2/Q2 to be the Healthy Lifestyle Detroit Program and A3/Q3 and A4/Q4 to be Bariatricity Detroit. For the two programs in Detroit, how does the Health Production Function and the law of diminishing returns work? This question has not yet been answered. There is no single right answer for this, but below are a number of points to consider when analyzing the graph, the health production function, and law of diminishing returns. If the state allocated funding amounts A1 and A2 to the smaller program 2, “Healthy Lifestyles Detroit,” this would result in large changes to health outputs Q1 and Q2, specifically, larger decreases in the rates of diabetes in low income, obese individuals. If the state allocated funding amounts A3 and A4 to the larger program 1, “Bariatricity Detroit,” this would result in small changes to health outputs Q3 and Q4, specifically, smaller decreases in the rates of diabetes in obese individuals. Of note, Bariatricity Detroit is not designed for lowincome, obese individuals, but rather, for individuals with insurance that will provide coverage for weight loss surgeries. At this point, the health production function shows that the most economically efficient decision for the state would be to provide funding to the smaller program which would have larger health outputs; that is, a larger decrease in diabetes rates in low-income, obese individuals. The final step in using a Health Production Function is to consider variable inputs (inputs that change depending on the level of production) and marginal outputs (the additional outputs produced by adding a unit of input) for each of the programs. Of your previously defined inputs, which would be considered variable inputs for each of the two programs and why? This question has not yet been answered. Variable Inputs The two programs that the state can choose to provide funding for are very different in terms of their approaches and the costs associated with program expansion. Aside from funding, which is a fixed input, there are variable inputs for each program. Variable inputs must be considered because they add to the total inputs needed to achieve desired program objectives. Health Production Analysis
.
For Bariatricity Detroit, the larger program, aside from funding which is a fixed input, the possible inputs that were defined – hospital staffing, licensing of the added facilities, surgical suite costs, bariatric surgeon costs – are variable. For example, costs related to hospital staffing of a bariatric surgery center depend on how many staff are already available in the hospital and how many new staff need to be hired. For Healthy Lifestyles Detroit, the smaller program, aside from funding which is a fixed input, the variable inputs defined were educational materials and behavioral coaches. When the costs of increasing a program’s size are not equal, the comparison cannot simply be made between the changes in output of the two programs. The relevant criterion for allocating resources to programs having different benefits and costs is to select those programs whose marginal benefit per dollar spent is greatest (Feldstein, 2012). Health Production Analysis

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How might marginal outputs be important in your comparison of Bariatricity Detroit and Healthy Lifestyles Detroit from an economic and output efficiency point of view? Consider the health production curve from the previous question to help give some more context to your response. This question has not yet been answered. Marginal Outputs For Bariatricity Detroit, assume that an expansion of this program would result in a decrease in diabetes prevalence by 30 obese individuals. The marginal cost of achieving that increased benefit is $300,000. In comparison, an expansion in Healthy Lifestyles Detroit yields, as a marginal benefit, a decrease in diabetes prevalence by 20 low income, obese individuals at a marginal cost of $100,000. Dividing the marginal cost by the marginal benefit (MC/MB) yields a cost of $10,000 per individual patient the Bariatricity Detroit program and $5,000 per individual patient in Healthy Lifestyles Detroit. It is clear from such an analysis that the state should allocate funding to expand Healthy Lifestyles Detroit. Conclusion When making a decision about allocating funding and resources, what are the steps you should be taking and the types of information you should be considering to drive and justify your choices? This question has not yet been answered. There is no single correct answer to this question, however, one process for making these types of economic and programmatic decisions could be outlined as follows: First, define and consider important aspects of the outputs and the inputs. These might include: • • • • • • specific population group whose health is to be affected goals of stakeholders objectives of programs desired outcomes and/or results costs associated with each program variable and fixed inputs needed to expand each program Next, define the relationship between inputs and outputs for each program. Keep in mind that: • the relationship is curvilinear • • • there is a law of diminishing returns the smaller program will have larger outputs initially the larger program will have smaller outputs initially Third, marginal effect on health of each of the programs should be empirically estimated. And last, to use the decision rule that resources should be allocated to those programs whose marginal benefit per dollar spent is greatest. … Health Production Analysis