Cost-benefit analysis: The ``gold standard'' re-examined

The dissertation reviews the recommendations of the Panel on Cost Effectiveness in Health and Medicine (Panel) convened by the US Public Health Service in 1993 in four areas: aggregation of costs and benefits, methods of estimating resources used, definition of population impacted and perspective used in cost benefit analysis. Financial data from a clinical trial was used to test whether different approaches in each of the above four areas would change the net benefit resulting from a cost benefit analysis. Differences in aggregation of cost and benefit resulted in the same net benefit, but not the same cost/benefit ratios. Differences in resource use estimation methods, population subgroups definitions and perspectives all produced different net benefits. Difference in perspective resulted in different and often opposing decisions as to whether the proposed intervention from the clinical trial should be implemented. ^

Efficiency from pharmacy inventory technology: A means to improving quality in non-profit hospitals

Hospitals, like all organizations, have both a mission and a finite supply of resources with which to accomplish that mission. Because the inventory of therapeutic drugs is among the more expensive resources needed by a hospital to achieve its mission, a conceptual model of structure plus process equals outcome posits that adequate emphasis should be placed on optimization of the organization's investment in this important structural resource to provide highest quality outcomes. Therefore emphasis should be placed on the optimization of pharmacy inventory because lowering the financial investment in drug inventory and associated costs increases productive efficiency, a key element of quality. ^ In this study, a post-intervention analysis of a hospital pharmacy inventory management technology implementation at The University of Texas M.D. Anderson Cancer Center was conducted to determine if an intervention which reduced a hospital's financial investment in pharmaceutical inventory provided an opportunity to incrementally optimize the organization's mix of structural resources thereby improving quality of care. The results suggest that hospital pharmacies currently lacking technology to support automated purchasing logistics and perpetual, real-time inventory management for drugs may achieve measurable benefits from the careful implementation of such technology, enabling the hospital to lower its investment in on-hand inventory and, potentially, to reduce overall purchasing expenditures. ^ The importance of these savings to the hospital and potentially to the patient should not be underestimated for their ability to generate funding for previously unfunded public health programs or in their ability to provide financial relief to patients in the form of lower drug costs given the current climate of escalating healthcare costs and tightening reimbursements.^