Reimbursements and cost–benefit analysis

  Reimbursements and cost–benefit analysis are ways to compare the costs and benefits of an intervention, where both are expressed in monetary units (CDC, n.d.). Cost–Benefit Analysis Monetary ValuationThe analysis estimates that the following benefits are worth $140 billion: Direct medical costs averted Valuation of quality of life gained due to non-fatal heart attacks averted Valuation of life years gained due to fatal heart attacks averted Next, the analysis estimates that costs to the industry and consumers are $6 billion. Calculation of Net Benefits$140 billion in benefits – $6 billion in costs = $134 billion in net benefits. Therefore, benefits minus costs equals net benefits. Net benefit = Benefits – costs = $140 – $6 = $134 billion Part A. Monetary Valuation The analysis estimates that the following benefits are worth $200 billion: Direct medical costs averted Valuation of quality of life gained due to non-fatal heart attacks averted Valuation of life years gained due to fatal heart attacks averted Next, the analysis estimates that cost to the industry and consumers is $17 billion. Calculate the net benefits. What does the value tell you as an administrator relative to the benefit of the procedure? Part B. Reimbursement Methods Answer the following questions: What are the various reimbursement methods used by third-party payers? What incentives are given to providers under each of these reimbursement protocols? How do these reimbursement methods impact the delivery of health services? What is capitation? What are the advantages and disadvantages of each of these reimbursement methods?