Can You Prepare a Cost Benefit Analysis?

Can You Prepare a Cost Benefit Analysis?

Nov 1, 2018

Author: Vicki Searcy, Vice President, Client Success Services and Consulting

 

Have you ever asked for staff, equipment or other resources and been turned down? Perhaps it was because you didn’t prepare a document that provided a cost-benefit analysis that made sense to those (i.e., your boss) who approve major expenditures.

 

Money has gotten tighter in our healthcare organizations the past decade and there is no sign of that changing. In order to obtain the resources that your department and the medical staff organization need to be effective and efficient, you need to learn how to state your case in a manner that is compelling to the decision-makers.

 

A cost benefit analysis identifies the rewards and risks of moving forward with a project, decision or action and was first used in business in the mid 19th century by a French Engineer, Jules Dupuit.

 

The elements of a cost-benefit analysis include:


  • Purpose of the project
  • Project description
  • Purpose of the analysis
  • How much effort should be devoted to benefit-cost analysis
  • Who will benefit from the project
  • Basis for the analysis
    • What will happen if there is no project?
    • Alternatives – how else can the desired benefits be achieved?
  • Project scheduled
  • Type of cost
  • What departments will be affected by the project?
  • Time period for analysis
  • Cost-benefit ratio

 

The cost benefit analysis with the listed elements gives the decision makers information to understand and weigh the price against the gain. You will want to determine if there is a cost benefit analysis template in place already for your organization and use it. Including this with your request for resources might just make the difference in being selected for funding over other submissions.

The Cost of Provider Onboarding
Take your cost benefit analysis a step further and consider incorporating some additional elements into your case when it comes to provider onboarding.