Analyzing Health Care Decision Making
A number of quantitative methods are utilized to make decisions and recommendations in health care. Quantitative methods are used to analyze and predict the demand for patient services, to determine capital expenditures for facility and technology enhancements, and to guide the manager in implementing quality controls. Whether or not you are familiar with quantitative methodologies, as a manager, you are responsible for the outcomes of implementing the decision based on the method used.
Your agency or institution has noted a negative trend in profitability for a diagnostic imaging cost center over the past 4 quarters.
As a manager, you need to make some recommendations to take to your board of directors to reverse the negative trend. Your first priority is to find a quantitative method to help you in making decisions. Complete the following:
- Choose a quantitative method (e.g., the decision tree model).
- Describe the model that you are using.
- Outline at least 4 proposed solutions to your board of directors, and analyze the strengths and weaknesses of each with regard to return on investment, break-even analysis, improvement in patient demand, improved patient safety and quality, and so forth.
- Summarize how the decision-making method helped you make objective recommendations to your board of directors.
Expert Solution Preview
As a healthcare manager, it is important to utilize quantitative methods to make informed decisions and recommendations. In this scenario, the profitability of the diagnostic imaging cost center has decreased over the past 4 quarters. To reverse this negative trend, the manager must choose a quantitative method and provide proposed solutions to the board of directors.
1. Choose a quantitative method:
One quantitative method that can be used in this scenario is the decision tree model. This method allows for the evaluation of different courses of action to determine which will lead to the best outcome.
2. Describe the model:
The decision tree model involves creating a visual representation of all possible solutions and outcomes. The manager must identify all possible decisions, the probabilities associated with each decision, and the potential outcomes. The model can then be used to determine the optimal decision to make.
3. Proposed solutions and analysis:
Four proposed solutions to reverse the negative trend for the diagnostic imaging cost center are:
a) Reduce staffing: This solution would save costs on salaries and benefits, but may also lead to decreased patient demand if wait times for imaging services increase.
b) Invest in new technology: Investing in new imaging technology will potentially attract more patients and improve the quality of imaging results, but may have a high upfront cost.
c) Increase marketing efforts: Increased marketing efforts may attract more patients, leading to increased patient demand and profitability. However, there is no guarantee that these efforts will be successful.
d) Implement cost-saving measures: This solution would involve cutting costs in areas such as supplies, utilities, and maintenance. While this solution may lead to short-term cost savings, it may not lead to long-term profitability if quality is compromised.
The strengths and weaknesses of each solution with regard to return on investment, break-even analysis, improvement in patient demand, improved patient safety and quality must be analyzed to determine the best course of action.
4. Summarize how the decision-making method helped make objective recommendations:
Using the decision tree model allowed the manager to identify all possible solutions to the problem and to evaluate the potential outcomes of each solution. This allowed for an objective evaluation of the best course of action to take to the board of directors. The strengths and weaknesses of each solution were analyzed to provide a comprehensive recommendation to the board of directors.