Monetary Valuation
Calculation of Net Benefits
$140 billion in benefits minus $6 billion in costs equals $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?
- Reimbursement methods
Part B. 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?
