Models of Health Care Delivery’s Economic Dynamics
ANSWER
A section
The company is working on three projects: structural repair, office equipment purchase, and hiring one more employee. The structural repair should be carried out based on the cost-benefit analysis.
Step 1
Direct repair costs (purchase of raw sand, cement, labour, paint, iron sheets, doors, and windows) = $ 2 million.
Indirect costs: staff sickness as a result of working in an unsafe building (cost of missed work) = $ 0.8M per employee*5 employees=4M
Step 2
The expected benefit if employees do not become ill=0.8M*5 employees=4M
Step 3
The estimated cost of structural repairs is $2 million.
Benefits of employees not becoming ill.
Total cost savings from structural repairs=4M-2M=2M
Step 4
The structural repair program is advantageous because it has a favourable variance in terms of investment returns to the organization as well as to the health of the employees.
B Section
The $8 million should be used to distribute educational materials and condoms to homeless people and for HIV testing for those at risk of infection.
According to Li, Blount, Reid, and Vaughan (2014, p.15), these prevention programs are more cost-effective because they reduce disease infection rates and, thus, the amount spent on disease treatment. It will save a significant amount of money because the government spends approximately $ 15 million on ARV drugs and $5 million on STI treatment (Zulman, Yoon, Cohen, Holmes, Asch, 2015, P.89). As a result, the two programs will save $12 million per year.
C section
Cultural norms such as wife inheritance raise the risk of HIV infection, especially if one of the partners is infected. Furthermore, group male circumcision increases the risk of infection, especially when the parties share circumcision equipment (Mohamed & Ziraba, 2015, p. 285). Addressing these challenges necessitates outreach programs that educate people about the health risks associated with maintaining cultural norms.
References
Li, X., Blount, P. L., Reid, B. J., & T. L. Vaughan (2014). Population benefit quantification in biomarker evaluation: Practical implications for disease detection and prevention 14(1), BMC Medical Informatics and Decision Making. Doi: 10.1186/1472-6947-115
S. F. Mohamed and A. K. Ziraba (2015). A cross-sectional study of the impact of sociocultural practices on HIV infection in two Nairobi slums. i285-i285, International Journal of Epidemiology, 44(suppl 1). doi:10.1093/ije/dyv096.559
D. M. Zulman, J. Yoon, D. M. Cohen, T. H. Holmes, and S. M. Asch (2015). Multimorbidity and healthcare utilization in the Veterans Affairs healthcare system in the United States. e007771-e007771, BMJ Open, 5(4). The doi is:10.1136/BMJ open-2015-007771.