There are few industries in this country where technology is changing as rapidly as in the health care sector. The health care industry focuses on improvement and works to make care more efficient and effective. This constant improvement cycle results in new and updated processes along with new medications, new care guidelines, new equipment, and new technology just to name a few. These new technologies are complex and expensive to invest in therefore, leaders must be ready to fully evaluate new technology to ensure decisions are made in the best interest of the hospital. Hospital leaders should look beyond the budget towards an opportunity cost, when making decisions regarding new technology.
The Opportunity Cost Concept
In order to perform …show more content…
There are alternatives being presented daily that require a leader, physician or even a patient to evaluate all options and determine an appropriate course of action. If those decision makers fail to incorporate an opportunity cost, they could be missing out on vital data regarding the choices presented.
A full evaluation of each decision should include an assessment of the opportunity costs. Health care is an industry full of limited resources. Patients have limited money to spend on treatments and health care coverage. Hospital leaders have a limited labor pool as more physicians and nurses retire without sufficient numbers to replace them. Resource scarcity is another issue facing hospitals due to supply chain interruptions and natural disasters (Richardson et al., 2014). It is important for hospitals to be prepared and do a full evaluation of alternatives affecting the organizations. By looking at the opportunity costs when evaluating decisions, hospital leaders can bring in crucial data beyond what is found on a financial budget. Opportunity cost calculations can bring in the elements of time, labor and finances to ensure an appropriate decision is …show more content…
In an article by Tiwari, Krupka, and Sandberg (2014), the topic of opportunity costs in relation to a new surgical hysterectomy approach is discussed. Hospitals are always looking to find new and better ways to accomplish tasks. Surgery approaches are a way to improve care for a patient and make care more efficient for the doctor and hospital. Tiwari et al. evaluated a new robotic surgical method in comparison to a well-known laparoscopic method. Both approaches to a hysterectomy produce similar results in terms of patient outcomes although the robotic assisted approach is associated with an increased cost to the facility without producing additional income (Tiwari et al., 2014). Robotic equipment is expensive and most facilities do not have this equipment presently therefore equipment must be purchased. Tiwari et al. stated the element of time should also be a factor in determining an accurate opportunity cost as robotic procedures take more time in an operating room. As vendors continue to market robotic assisted surgery benefits, hospital leaders need to be prepared to evaluate the total cost of this new technology and
The Opportunity Cost Concept
In order to perform …show more content…
There are alternatives being presented daily that require a leader, physician or even a patient to evaluate all options and determine an appropriate course of action. If those decision makers fail to incorporate an opportunity cost, they could be missing out on vital data regarding the choices presented.
A full evaluation of each decision should include an assessment of the opportunity costs. Health care is an industry full of limited resources. Patients have limited money to spend on treatments and health care coverage. Hospital leaders have a limited labor pool as more physicians and nurses retire without sufficient numbers to replace them. Resource scarcity is another issue facing hospitals due to supply chain interruptions and natural disasters (Richardson et al., 2014). It is important for hospitals to be prepared and do a full evaluation of alternatives affecting the organizations. By looking at the opportunity costs when evaluating decisions, hospital leaders can bring in crucial data beyond what is found on a financial budget. Opportunity cost calculations can bring in the elements of time, labor and finances to ensure an appropriate decision is …show more content…
In an article by Tiwari, Krupka, and Sandberg (2014), the topic of opportunity costs in relation to a new surgical hysterectomy approach is discussed. Hospitals are always looking to find new and better ways to accomplish tasks. Surgery approaches are a way to improve care for a patient and make care more efficient for the doctor and hospital. Tiwari et al. evaluated a new robotic surgical method in comparison to a well-known laparoscopic method. Both approaches to a hysterectomy produce similar results in terms of patient outcomes although the robotic assisted approach is associated with an increased cost to the facility without producing additional income (Tiwari et al., 2014). Robotic equipment is expensive and most facilities do not have this equipment presently therefore equipment must be purchased. Tiwari et al. stated the element of time should also be a factor in determining an accurate opportunity cost as robotic procedures take more time in an operating room. As vendors continue to market robotic assisted surgery benefits, hospital leaders need to be prepared to evaluate the total cost of this new technology and