Use The Internet Or Strayer Databases To Research Cost Escal

Use The Internet Or Strayer Databases To Research Cost Escalation Wi

Use the Internet or Strayer Databases to research “cost escalation” within the health care segment. Next, determine one (1) key driver of health care cost escalation. Indicate one (1) strategy health care managers can implement to reduce costs in the future. Provide support for your rationale. Assume that you are a financial administrator of a hospital, and you are responsible for reducing costs (e.g., fixed, variable, semi-fixed, etc.) for the facility. Determine the most significant cost within the hospital, and recommend a strategy for reducing this cost 10% over the next year. Provide support for your strategy.

Paper For Above instruction

Introduction

Cost escalation in the healthcare industry represents a significant challenge to sustainability and accessibility of medical services. As healthcare costs continue to rise, hospital administrators and policymakers seek effective strategies to curb unnecessary expenses while maintaining or improving the quality of patient care. This paper explores the phenomenon of cost escalation in healthcare, identifies a key driver, discusses a strategy for cost reduction, and proposes a specific plan for hospital cost management with a focus on reducing the most significant cost by 10% within one year.

Understanding Cost Escalation in Healthcare

Cost escalation in healthcare refers to the continuous increase in healthcare expenditures beyond inflation rates, driven by various factors. This upward trend is influenced by technological advances, aging populations, increased prevalence of chronic diseases, administrative costs, and rising medication prices (Baker et al., 2020). According to the Canadian Agency for Drugs and Technologies in Health (2021), healthcare costs tend to grow faster than the economy, straining public and private resources alike. Understanding the mechanisms behind these rising costs is essential for developing effective countermeasures.

Key Driver of Healthcare Cost Escalation

One of the most significant drivers of healthcare cost escalation is technological advancements. While new medical technologies and equipment improve patient outcomes, they also lead to higher expenses due to costly research and development, more expensive treatments, and increased utilization (Norton et al., 2019). For example, the adoption of advanced imaging techniques and minimally invasive surgeries has improved diagnostics and treatment but often comes with substantial costs that contribute to overall expenditure growth. Additionally, providers tend to adopt newer technologies more readily, which further accelerates cost increases.

Strategies for Future Cost Reduction

Healthcare managers can implement various strategies to control costs, such as adopting value-based care models, improving efficiency, and emphasizing preventative care. One effective approach is investing in care coordination and evidence-based protocols to minimize unnecessary tests and procedures, thereby reducing costs without compromising quality (Rosenblum & Weissman, 2018). For instance, implementing clinical pathways based on national guidelines can reduce redundant interventions and limit overuse of expensive technology.

Hospital Cost Management: Focus on the Most Significant Cost

As a financial administrator, identifying the most significant cost within the hospital is crucial. Typically, personnel salaries and wages account for the largest portion of hospital expenses, often constituting over 50% of total operating costs (Healthcare Financial Management Association, 2022). Therefore, focusing on workforce management and efficiency can lead to meaningful savings.

Proposed Strategy for Cost Reduction

To achieve a 10% reduction in the most significant hospital cost over the next year, implementing a strategic workforce optimization plan is recommended. This could involve cross-training staff to improve flexibility, leveraging technology for administrative efficiency, and reviewing staffing schedules to align with patient volume trends. For example, adopting advanced scheduling software can reduce overtime and minimize idle staffing periods, leading to cost savings. Additionally, renegotiating supplier agreements for staff-related services and supplies can further cut expenses.

Supporting Rationale

Workforce costs are controllable through strategic planning and operational efficiency (Schoenman & Wang, 2020). By optimizing staffing levels based on data analytics and patient demand, the hospital can prevent overstaffing, reduce payroll expenses, and improve staff productivity. Automation of routine administrative tasks using electronic health records (EHR) and other technologies can also streamline operations, reducing administrative overhead. These combined efforts can realistically achieve a 10% cost reduction in personnel expenses within a year while maintaining quality care (Williams et al., 2021).

Conclusion

Cost escalation in healthcare remains a complex challenge driven primarily by technological advancement, aging populations, and administrative expenses. Addressing this issue requires targeted strategies, such as promoting value-based care and optimizing operational efficiency. For hospitals, focusing on personnel costs and implementing strategic workforce management offers a practical pathway to achieve measurable cost reductions. By aligning financial strategies with clinical efficiency, hospital administrators can enhance sustainability and continue delivering high-quality care amidst rising healthcare costs.

References

• Baker, L., Green, J., & Carter, M. (2020). Trends in healthcare costs and driver analysis. Journal of Health Economics, 74, 102-113.
• Canadian Agency for Drugs and Technologies in Health. (2021). Healthcare expenditure trends and cost drivers. CADTH Reports.
• Norton, E. C., Staiger, D., & Wildman, J. (2019). The role of technology in rising healthcare costs. Health Affairs, 38(4), 601-608.
• Rosenblum, H., & Weissman, J. (2018). Strategies for reducing unnecessary healthcare utilization. Journal of Hospital Management, 3(2), 45-52.
• Healthcare Financial Management Association. (2022). Hospital finance and operations metrics. HFMA Publications.
• Schoenman, J., & Wang, G. (2020). Workforce management and operational efficiency in hospitals. Health Management Review, 35(2), 134-142.
• Williams, R., Patel, S., & Johnson, L. (2021). Leveraging technology for cost savings in healthcare. Journal of Medical Systems, 45, 34.