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Cost-Effective Analysis in Healthcare

Cost-Effective Analysis in Healthcare

Shasta Faculty is a non-profit organization that provides health services for Shasta University. Among others, the clinic provides physician operations for the Shasta Health system, comprised of six hospitals and other supporting services. The eldercare outpatient clinic caters to older people who are not necessarily sick but are exposed to old-age complications. The clinic gets sporadic visits that have been gradually growing over time.

One of the benefits of hiring physician extenders is that they will provide specialized care at lesser charges than physicians. Also, physicians will spend more time with patients compared to physicians, leading to better care outcomes (Penner, 2016). Physicians will earn 85% of what physicians earn if they conduct a procedure themselves (Gapenski & Pink, 2003). However, if they collaborate with physicians, they share fees.

Hiring an extra physician extender is what the elderly need. Unlike physicians, physician extenders have more time to spend with patients (Penner, 2016). Spending time with patients leads to quality health outcomes, whether real or perceived. Physician extenders will also help the eldercare outpatient clinic cut costs. Currently, the clinic has relatively high physician costs ($335,000) compared to physician fee collection ($454,219).

However, hiring physician extenders comes with a few direct and indirect costs. First, physician extenders require licensing to practice in the state and must pay for licensing (Gapenski & Pink, 2003). Also, if physician extenders dominate the practice, the public might develop a general perception that they might not get the proper care. Besides, physician extenders may need supervision, leading to extra costs. Failure to supervise them may compromise the quality of care.

Based on the cost-effective analysis, the facility should hire physician extenders for the eldercare outpatient clinic even with the underwhelming costs that come with the decision. Other than being cost-effective, they come with different qualities. They will increase patient education, bolter physicians’ productivity, and manage chronic conditions.


Gapenski, L. C., & Pink, G. H. (2003). Cases in Healthcare Finance (p. 243). Health        Administration Press.

Penner, S. J. (2016). Economics and financial management for nurses and nurse leaders. Springer Publishing Company.


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Cost-Effective Analysis in Healthcare

Cost-Effective Analysis in Healthcare

To Prepare:
Review Chapter 9 of the Penner (2017) textbook, especially the section on CEAs
Review Case Study 5, Shasta Family Practice in Pink and Song (2018). This case focuses on physician extenders in three outpatient clinical settings.
Select one of the three Shasta Outpatient Clinics to focus on for this Discussion. You must perform a cost-effectiveness analysis (CEA) to determine which type of extender would be appropriate for each practice. You will determine the financial impact and any qualitative improvements to patient care.
Reflect on the results of your CEA for the physician extenders examined.
Consider the financial impact of these extenders on the practice and reflect on qualitative improvements you might recommend to improve patient care.

Post a comprehensive response to the following: (DISCUSSION POST)

Provide a brief description of the Shasta Outpatient Clinic you selected.
Briefly describe the results of your CEA for a physician extender.
Highlight the primary and secondary patient benefits for the outpatient clinic site you selected based on the results of your CEA for a physician extender.
Briefly explain the direct and indirect costs associated with the project or program. Are there costs that cannot be quantified? Are there any benefits that cannot be quantified? If so, describe these costs and why they cannot be quantified.
As a decision-maker, how would you use the results of your CEA for this project? Be specific and provide at least two examples.

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