The Quik Service Walk In Clinic always has three M.D.'s and eight R.N.s working at its 24 hour clinic, which serves customers with minor emergencies and ailments. The clinic has hired an efficiency expert to examine its operations and make suggestions for reducing costs.
For some of the medical procedures done at the clinic, experienced nurses can perform the medical tasks approximately as well as the physicians can, as long as the nurses are supervised by M.D.s. Since M.D.s are more highly trained than nurses, the marginal product of M.D.s is higher than the marginal product of R.N.s.
The manager of the clinic is confused by the efficiency consultants report because the report recommendsusing more R.N.s and fewer M.D.s to lower the cost of providing a given level of medical services. Under what circumstances would it be economically efficient for this clinic to use more R.N.s and fewer M.D.s (given (MPmd>MPrn)? Explain?© BrainMass Inc. brainmass.com October 25, 2018, 7:01 am ad1c9bdddf
First, let's take a look at what marginal product (MP) means. It define the amount of input needed for the next additional unit of output. So when we say that MDs have a higher marginal product, we mean that the clinic's billable services increase more for an additional MD than for an additional RN.
However, when you think about it carefully, you realize MP does not really tell us much about profitability. That is because it does not take into account the costs associated with the additional inputs. Thus, just because an MD's MP is greater, it ...
How the right mix of MDs and RNs can improve efficiency in a clinic.
Cost Transparency in Health Care
Scenario: On behalf of consumers, employers and local purchasers in your market are committed to slowing health care costs by improving visibility on hospital prices. A recent media story revealed that prices in your local market were the highest in the state. You are a member of a private sector consulting service that has been hired to help a hospital address transparency issues. The hospital would like to be more transparent in their cost and fee relationships with providers.
Review the provided scenario. What are the advantages of transparency for both the hospital and the consumer? How might hospital cost transparency improve economic efficiency?
Consider current (last 5 years) regulation and policy to compare hospitals based on their costs. Locate and review literature to support your recommendations.