Hospital Economics : a Primer on Resource Allocation to Improve Productivity & Sustainability

163 Pages·2018·1.28 MB·English

by  Heri Iswanto

Hospital Economics
A Primer on Resource Allocation to
Improve Productivity & Sustainability

Hospital Economics
A Primer on Resource Allocation to
Improve Productivity & Sustainability
A. Heri Iswanto
AA PPRROODDUUCCTTIIVVIITTYY PPRREESSSS BBOOOOKK
First published 2018
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2018 by A. Heri Iswanto
The right of A. Heri Iswanto to be identified as author of this work has been
asserted by him in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Iswanto, A. Heri, 1977- author.
Title: Hospital economics : a primer on resource allocation to improve
productivity & sustainability / A. Heri Iswanto.
Description: Boca Raton : Taylor & Francis, 2018. | "A CRC title, part of the
Taylor & Francis imprint, a member of the Taylor & Francis Group, the
academic division of T&F Informa plc." | Includes bibliographical
references and index.
Identifiers: LCCN 2017051162| ISBN 9780815388777 (hardback : alk. paper) |
ISBN 9781351172523 (ebook)
Subjects: LCSH: Hospitals--Business management. | Hospitals--Administration.
Classification: LCC RA971.3 .I89 2018 | DDC 362.11068--dc23
LC record available at https://lccn.loc.gov/2017051162
ISBN: 978-0-815-38877-7 (hbk)
ISBN: 978-1-351-17252-3 (ebk)
Typeset in ITC Garamond Std Light
by Nova Techset Private Limited, Bengaluru & Chennai, India
To my loving wife, Shika,
and our children, Naya and Farrel

Contents
Acknowledgments ..............................................................xi
Author ................................................................................xiii
1 The Importance of Hospital Economics ...................1
Introduction ........................................................................1
Hospital Cost Savings .........................................................5
Ratio of Hospital Beds ........................................................6
Hospital Economics Issues .................................................7
References ...........................................................................9
2 Hospital Resource Allocation.................................11
Introduction .......................................................................11
Production Function ..........................................................12
Cost Function .....................................................................16
References ..........................................................................19
3 Hospital Productivity .............................................21
Introduction .......................................................................21
Hospital Productivity Factors ............................................25
References ..........................................................................29
4 Hospital Competition and Quality .........................31
Introduction .......................................................................31
Competition versus Quality ...............................................31
Nonfinancial Factors ..........................................................33
References ..........................................................................38
vii
viii ◾ Contents
5 Cost Components in Medical Procedures ..............39
Introduction .......................................................................39
Cost Elements.....................................................................40
Analysis of Covariance ......................................................43
References ..........................................................................47
6 Economic Burden of Disease .................................49
Introduction .......................................................................49
Perspectives on Study of the Economic Burden ..............49
The Economic Burden of Disease ....................................51
Sociological Role ................................................................52
Stigma .................................................................................53
The Proportion of Direct and Indirect Costs ....................56
References ..........................................................................56
7 Economical Aspects of Hospital-Acquired
Infections ...............................................................57
Introduction .......................................................................57
Implementation of Work Standardization .........................58
Economic Analysis of Hospital-Acquired Infections ........59
Hospital Costs Spent ..........................................................60
The Importance of Hospital-Acquired Infections ............61
Incremental Cost-Effectiveness Ratio ................................63
References .........................................................................64
8 Hospital Resource Management ............................67
Introduction .......................................................................67
Technical Efficiency ..........................................................68
Economic Efficiency ..........................................................69
Scale Efficiency ..................................................................71
The Relation among Efficiencies .......................................73
References ..........................................................................75
9 Economy Scale of Hospitals ...................................77
Introduction ......................................................................77
Economy of Scale ..............................................................78
Economy of Scope ............................................................80
Application .........................................................................81
References ..........................................................................85
Contents ◾ ix
10 Hospital Human Resources Development ..............87
Introduction .......................................................................87
References ..........................................................................93
11 Methods of Improving the Quality of the
Hospital .................................................................95
Introduction .......................................................................95
Total Quality Management, Six Sigma, and Lean .............95
Plan, Do, Check, Act ......................................................... 99
The Seven Quality Control Tools ....................................100
References ........................................................................101
12 Lean Implementation in Hospitals .......................103
Introduction .....................................................................103
Waste ................................................................................103
Lean Implementation .......................................................104
Lean Principles .................................................................106
References ........................................................................110
13 Utilization of Hospital Resources ........................113
Introduction .....................................................................113
Consumer Rates ...............................................................115
Insurance ..........................................................................117
References ........................................................................119
14 Hospital Revenue Components ............................121
Introduction .....................................................................121
Payment-Based System ....................................................123
Hospital Revenue .............................................................123
References ........................................................................129
15 Diagnosis-Related Groups ....................................131
Introduction .....................................................................131
Diagnosis-Related Groups in Indonesia .........................132
Indonesia Case Base Groups ..........................................136
References ........................................................................138
Index ..................................................................................141