Reference no: EM133570428

Homework: Cost-Benefit Analysis

Preparation

For this homework continue to use the organization you selected in the homework.

Instructions

Suppose an issue has emerged in your organization that presents significant risks to the stakeholders involved. Your supervisor has asked you to conduct a cost-benefit analysis (CBA), make a recommendation, and present it to the board of directors. You are expected to consider the numbers within the context of the organizational mission, strategic direction, patient safety, risk management issues, regulatory requirements, patient and stakeholder satisfaction, and the dynamics within the healthcare industry.

Select a relevant issue within your workplace, or one from the resources provided for this homework, for which a CBA may be conducted. The CBA should include one of the following course-related topics:

1. Quality.
2. Patient safety.
3. Risk management.
4. Regulatory standards.
5. Compliance.
6. Patient and stakeholder satisfaction.

Step I: Identify Costs

Read the Cost-Benefit Analysis and Example and apply the process to identify costs:

A. Make a list of all monetary costs that will be incurred upon implementation and throughout the life of the project. These include start-up fees, licenses, production materials, payroll expenses, user acceptance processes, training, and travel expenses, among others. Include the assumptions for your totals. An example would be $2,000 for licenses and includes $100 for 20 providers.

B. Make a list of all non-monetary costs that are likely to be absorbed. These include time, low production of other tasks, imperfect processes, potential risks, market saturation or penetration uncertainties, and influences on one's reputation. An example would be the organization has a 60-day waiting list for new appointments. A new provider salary is $XXX,XXX and our reimbursement rate for this type of appointment is $XXX. The new provider will see XX patients per day.

C. Assign monetary values to the costs identified in steps one and two. To ensure equality across time, monetary values are stated in present value terms. If realistic cost values cannot be readily evaluated, consult with market trends and industry surveys for comparable implementation costs in similar businesses.

D. Add all anticipated costs together to get a total costs value.

Step II: Identify Benefits

Continuing with the CBA, proceed with the identification and quantification of benefits, per the Cost-Benefit Analysis and Example.

A. Make a list of all monetary benefits with assumptions that will be experienced upon implementation and thereafter. These benefits include direct profits from products or services, increased contributions from investors, decreased production costs due to improved and standardized processes, and increased production capabilities, among others.

B. Make a list of all non-monetary benefits with assumptions that one is likely to experience. These include decreased production times, increased reliability and durability, greater customer base, greater market saturation, greater customer satisfaction, and improved company or project reputation, among others.

C. Assign monetary values to the benefits identified in steps one and two. Be sure to state these monetary values in present value terms as well.

D. Add all anticipated benefits together to get a total benefits value.

Cost-Benefit Analysis

Enter the cost and benefit data you developed for the CBA in your preparation steps into the Cost-Benefit Analysis Template [XLSX] Download Cost-Benefit Analysis Template [XLSX].

Then, write an analysis in which you do the following:

I. Specify the focus and stakeholders for the cost-benefit analysis. Identify your stakeholders and describe the risk management issue for which you have created the CBA.

II. Develop a value proposition for change management that incorporates quality and risk management concepts. Present a value-based proposal and describe strategies for how you would identify and evaluate the process for reducing or avoiding risk within this organization. Ensure you evaluate your risk management concern through a DMAIC lens.

III. Conduct the cost-benefit analysis for the risk management intervention. Present your recommended best options for improving your risk management issue, as it relates to the organization in question.

IV. Identify your key performance indicators (KPIs). Using the SMART method, present your KPIs for your recommendations. Use your CBA assumptions as a guide. For example, if you are presuming that your revenue is based on an increased daily volume, that volume should be the target for a corresponding KPI.

V. Evaluate the cost versus benefit according to the general guidelines outlined in the Cost-Benefit Analysis and Example.

VI. Describe recommendations to influence and impact the needed changes for quality improvement.

1. Make a recommendation as to whether the benefits are sufficient to outweigh the costs of the proceeding.

2. Describe the systems-based context for your recommendations, integrating the CBA within the organization as a whole.

3. Describe how the issue relates to the organization's vision, mission, and strategic direction.

4. Provide a rationale that explains how your recommendations are appropriate for your organization's capacity and strategy.