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Learning Outcomes This week students will:

1. Compare and contrast cost benefit analysis and cost utility analysis.

2. Analyze the role of pricing transparency in health care.

3. Develop a SWOT analysis for a proposed health care services project.  

Introduction

Price setting and profitability depend on several factors as stated by Porter’s model, which include nature of rivalry, bargaining power of customers (patients) and risk of entry by potential rivals. This week, we will explore health administrative innovations with an eye toward health care delivery and service demands. It is critical to appraise projects using cost benefit analysis and utility analysis to ascertain if a procedure is worth the cost or if a specific process can be done more efficiently. In addition, this has to take into account pricing. As noted in our text, “Pricing is a continuing challenge for healthcare organizations for three reasons” (Lee, 2009, p. 169). First, leaders don’t have clear pricing strategy. Second, leaders lack the necessary data to make a good decision and, finally, one pricing model does not fit every department or organization (Lee, 2009). This week we will explore aspects of pricing transparency as well as ideas on how clear strategies and accurate data are necessary in good decision making.

Required Resources Required Text

1. Lee, R. H. (2009). Economics for health care managers (2nd ed.). Chicago, IL: Health Care Administration Press. 

a. Chapter 11: Pricing

b. Chapter 13: Economic Analysis of Clinical and Managerial Interventions

c. Chapter 14: Profits, Market Structure, and Market Power

 Articles

1. Daniels, E. B., & Dickson, T.C. (1990). Assessing the feasibility, Performance of geriatric clinics. Healthcare Financial Management, 44(2), 30-34. Retrieved from the ProQuest database

· This article will be used in conjunction with your feasibility study assignments.

2. University of Kansas. (2013) Community tool box. Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main

· This webpage provides an overview of SWOT analysis from the community context. 

Multimedia

1. Demand Metric (2012, November 5). Feasibility study template [Video file]. Retrieved from http://www.youtube.com/watch?v=gNsimuW0dJU

· This video shows you what goes into a feasibility study as a template used.

 

Recommended Resources Articles

1. Guo, J., Wade, T., Pan, W., & Keller, K. (2010). School-based health centers: Cost-benefit analysis and impact on health care disparities. American Journal of Public Health, 100(9), 1617-1623. doi:10.2105/AJPH.2009.185181 

· This article evaluated the impact of school-based health centers--which provide essential health care for students by aiming to eliminate many access barriers--on health care access disparities and conducted a cost--benefit analysis.

2. Hsu, S. H. (2011). Cost information and pricing: Empirical evidence. Contemporary Accounting Research, 28(2), 554-579. doi:10.1111/j.1911-3846.2010.01051.x

· The article examines the relationship between service prices and unit-allocated capacity costs in firms that have committed themselves to long-term capacity requirements. Specifically, the author studies a private hospital in California using data gleaned from the years 1993 through 1999.

3. Luxton, D. D. (2013). Considerations for planning and evaluating economic analyses of telemental health. Psychological Services, 10(3), 276-282. doi:10.1037/a0030658

· This article discusses the economic evaluation of telemental health (TMH) to inform ways to decrease the cost of delivering care, to improve access to care, and to make decisions about the allocation of resources. Previous reviews of telehealth economic analysis studies have concluded that there are significant methodological deficiencies and inconsistencies that limit the ability to make generalized conclusions about the costs and benefits of telehealth programs (Luxton, 2013).

4. Saleh, S. S., Freire, C., Morris-Dickinson, G., & Shannon, T. (2012). An effectiveness and cost-benefit analysis of a hospital-based discharge transition program for elderly medicare recipients. Journal of the American Geriatrics Society, 60(6), 1051-1056. doi:10.1111/j.1532-5415.2012.03992.x 

· This paper investigated the business case of post discharge care transition (PDCT) among Medicare beneficiaries by conducting a cost-benefit analysis.

5. Smith, G. K. (2013). Medical price transparency. Insurance Advocate, 124(7), 40. Retrieved from the EBSOhost database.

· The author reflects on the challenges in bringing transparent pricing in health care and discusses the steps to be taken to resolve the problem. He mentions that medical facilities need to exhibit transparent pricing to emerge from a competitive market and market economy. He informs that a tertiary hospital from Oklahoma City, Oklahoma is providing upfront pricing for procedures for an outpatient center.   

Discussions To participate in the following discussions, go to this week's Discussion link in the left navigation.

1. Economic Analyses and Interventions Prior to engaging in this discussion, please read Chapters 13 and 14 in the text and review any relevant Instructor Guidance. It is suggested that you review the recommended articles to glean any helpful information. Analyze and comment on economic analyses of health administrative innovations that are germane to the provision of health services. How have these innovations become more important in health care delivery within the context of the Affordable Care Act? Develop a list of similarities and differences between cost benefit analysis and cost effectiveness analysis as they pertain to specific health care service demands. Compare and contrast economic challenges and incentives as they relate specifically to cost benefit and cost effectiveness analyses.

Guided Response: Read several of your classmates’ posts and provide a substantive written response to at least two of your peers. Discuss whether or not you agree with the conclusions provided in your classmate’s initial post. Choose one aspect with which you disagree and offer an alternative that illustrates innovations in health care delivery. Explain why this alternative would be a better option and provide at least one peer-reviewed reference outside of your textbook to support your position. You must also comment specifically on one aspect of your classmate’s post with which you agree. Provide a brief explanation as to why the statements were effective, and support your opinion and assertions with appropriate research. In addition to responding to at least two other students’ posts, it is recommended that you reply to at least one person who responded to your original post by either respectfully defending your conclusions or by listing how you might implement the changes your classmate suggested.

2. Pricing and Transparency  Prior to engaging in this discussion, please read Chapter 11 in your text and review any relevant Instructor Guidance. It is suggested that you review the recommended articles to glean any helpful information. Analyze the role of the paradigm shift under the Affordable Care Act and discuss how transparency will play a greater role in pricing of health care. In your opinion, will consumers begin to demand increasing transparency in pricing? Provide at least one peer-reviewed reference outside of your textbook to support your position. Do you believe accrediting commissions (e.g., the Joint Commission) will demand greater transparency in pricing?  How will these demands be weighted as compared to individual consumers’ demands? Again, be sure to cite research that supports your statements.

Guided Response: Read several of your classmates’ posts and provide a substantive written response to at least two of your peers. Discuss whether or not you agree with the conclusions provided in your classmate’s initial post. Choose one aspect with which you disagree and offer an explanation as to why your assertions regarding the new paradigm shift toward transparency will enhance the consumer experience. Explain how your assertions more accurately tie in with the potential demands of accreditation groups like the Joint Commission. Provide at least one reference to support your position. Comment specifically on one aspect of your classmate’s post with which you agree. Provide a brief explanation as to why your colleague’s statements were effective, and bring in research that supports your assertions. In addition to responding to at least two other students’ posts, it is recommended that you reply to at least one person who responded to your original post either by respectfully defending your conclusion or by listing how you might implement the changes your classmate suggested.

Assignment To complete the following assignment, go to this week's Assignment link in the left navigation. 

Concept Paper Submission The primary purpose of the Concept Paper is to obtain instructor feedback to ensure that you are on track with the completion of your feasibility study. The complete instructions for the feasibility study can be found in Week Six of the online course.

The Concept Paper is a draft version of your Final Paper with the initial list of references. In this draft, be certain to include and (at least) briefly address the content of the headings listed in the Final Paper instructions for Week Six. You must include a preliminary SWOT analysis for your chosen project. For further assistance, please view the Feasibility Study Template video and view the online article “Community Assessment,” both of which include specific information on elements of the SWOT analysis required for your final paper. Remember, your concept paper is a draft, NOT the final product. Submit your Concept Paper with the required headings to your instructor by the end of this week. Be sure to review the article, “Assessing the Feasibility, Performance of Geriatric Clinics,” for further information as you complete your assignment. Be certain to include your list of references with your draft.

Writing the Feasibility Study Concept Paper The Paper:

· Must be a minimum of three double-spaced pages in length, excluding title and reference pages, and formatted according to APA style as outlined in the Ashford Writing Center.

· Must include a title page with the following: 

· Title of paper

· Student’s name

· Course name and numbe

· Instructor’s name

· Date submitted

· Must begin with an introductory paragraph that has a succinct thesis statement.

· Must address the topic of the paper with critical thought.

· Must include the listed headings in the Week Six feasibility study instructions with the content required under each.

· Must end with a conclusion that reaffirms your thesis.

· Must list at least six scholarly sources that were published within the last five years, including a minimum of three peer-reviewed sources from the Ashford University Library.

· Must document all sources in APA style as outlined in the Ashford Writing Center.

· Must include a separate reference page that is formatted according to APA style as outlined in the Ashford Writing Center.