Cost Benefit Analysis

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ntroduction Winston Churchill's words "to improve is to change; to be perfect is to change often", brilliantly highlight the need for health care institutions to constantly alter and advance their structure, organization and staff in order to meet the demands of an ever-changing medical arena. The aforementioned three pillars with regards to management in a hospital setting will be carefully examined in this paper in order to determine their fundamental roles in the pursuit of the ‘perfect hospital’ that is pharmacoeconomically viable. Needless to note, perfection, as an absolute, may never be truly achieved. However, the state of being very near faultlessness may be acquired given one’s resolve to be constantly open to improvement. According…show more content…
The benefits realized from a program or treatment alternative are compared with the costs of providing it. These costs and benefits are expressed as a ratio (a benefit-to-cost ratio), a net benefit, or a net cost. A clinical decision maker would choose the program or treatment alternative with the highest net benefit or the greatest benefit-to-cost ratio. 12 As opposed to the cost-benefit analysis, the cost-effectiveness analysis is a way of summarizing the health benefits and resources used by competing healthcare programs so that policymakers can choose among them. The results of this analysis are also expressed as a ratio—either as an average cost-effectiveness ratio or as an incremental cost-effectiveness ratio, which represents the total cost of a program or treatment alternative divided by its clinical outcome to yield a ratio representing the dollar cost per specific clinical outcome gained, independent of comparators.…show more content…
Pharmacoeconomics can provide the systematic means for this quantification. The principles and methods of pharmacoeconomics and how they can be applied to clinical pharmacy practice, and how they can assist in the valuation of pharmacotherapy and other modalities of treatment in clinical practice. There is a distinct relationship between pharmacoeconomics, outcomes research, and pharmaceutical care. Pharmacoeconomics is not in any way synonymous with the outcomes of research. Pharmacoeconomics is a division of outcomes research that can be used to quantify the value of pharmaceutical care products and services. Pharmaceutical care has been defined as the responsible provision of drug therapy for the purposes of achieving definite outcomes. By accepting this as the paradigm or vision for our profession, pharmacy is accepting responsibility for managing drug therapy so that positive outcomes are
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