Painful vs. Painless Cost Control - Essay Example

? "Painful vs. Painless Cost Control" Introduction Cost control acquires numerous dissimilar approaches and outlines, which rely on the fundamental basis for dropping everyday expenditure, outflow, costs and disbursements. In order to safeguard self as well as the business, small-business holders, specifically, seek for cost control quantifications that facilitate equally, progress and sustainable business challenges. Despite the zone of expenses, trades should arrange for scheming their prices, the jeopardy towards excruciating cost control. Painless cost control serves as a substitute of cutting down the prices in a trouble-free, flawless manner. The divergence between painful and painless cost control is that painful diminutions harmfully influence processes on the other hand, painless cost control comprises the slightest pressure on the enterprise and its prospects (Painful Vs Painless Cost Control). Planning Spontaneous or impulsive decisiveness to slash prices are by no means astute, since these verdicts probably culminate into meager options, inferior quality of goods and services, such decisions may result in assigning the job to unskilled person who may finish the work in an unprofessional manner, such an attitude not only hampers the quality of the output but also results in generating negative implication on the image of the organization. Essentially, controlling costs necessitates extensive and significant examinations and preparations. Painless vs. painful cost control is highly challenging and onsets with the development of enduring stratagem and producing the efficient strides to attain the objectives of the organization. In health care, where direct dealing is with the health and well being of the people, cost control matters usually encompass thorough planning for their implementation or reformation (Painful Vs Painless Cost Control). Observation Observation enables the authorities to analyze discrepancies associated with the small business, as these strides cannot be ignored. Variance or discrepancies is directly related to the diversity between the business planned to expend vs. the concrete expenses of the company (Painful Vs Painless Cost Control). Health care sector is considered as the recession-proof (Manchikanti, Singh and Bosewell, 2010). For example, the requirement of assistance and nursing staff at the surgical ward is 30 which may vary with the consultation clinic. As the health care organization operates centrally, in terms of painless cost control, staff could be provided to both the departments with minimum wages or the wages of the new recruitment could be reduced so as to keep the budget of the reformation and recruitment low and also to get hands on work. This holds true in a situation where population is large and vacancies are less. On the contrary, in terms of painful cost control, there could be no new recruitment to save expenses of extra wages. However, under such a situation it becomes difficult for the existing staff to provide their services to meet the demand of the situation. When the number of patients is less the staff will be in a position to manage well but if the number of patients are more the staff will feel fatigue to meet all the demands of the patients and this may result in exhaustion of the existing staff, thereby quality of performance of the existing staff is affected. Cause For smooth running of the business organizations, it becomes essential to ascertain the causes of divergence between the estimated expenses and the actual expenses. In health sector, use of paper, charges a burden on the organization besides purchasing instruments which are necessary to provide the health care with the upgraded technology (Painful Vs Painless Cost Control). Patient's reports and files are required to be maintained and therefore when such health organizations construct their budgets, they rely on the total cost for paper. The health care organizations put the bid by means of bulk pricing, this results in getting lower costs per unit as compared to the cost incurred for the smaller order. If the order is placed for smaller number there is a variance in the cost. This variation could be estimated in terms of painless and painful cost controlling as painless cost management seeks how the cost can be reduced and therefore considering the tender of those suppliers who offer better pricing. On the contrary, painful cost control encompasses instructions to all the members of the organization to use less paper. In certain cases use of less paper cannot be practiced as records of the patients need to be written/ typed in legitimate manner for future references. Action To control the expenses and cost proactive measures are suggested. The action must be taken up by the authorities to invite tenders for all the purchasing that is being performed by the health care organization and the adjustment that is provided should permit an increase of 1% to 2% (Grumbach & Bodenheimer, 1994). Painless cost control could be practiced in terms of cut in higher salaries which may be unnecessary, some of the higher authorities get fat pay while their work does not justify their salaries. Painful cost control occurs in terms of patients being charged more and this reduces the number of patients taking up the facility provided by the health care organization. This not only reduces the patient turnover but also diminishes the source of income for the health care organization. Mechanisms of Controlling Costs According to Grumbach & Bodenheimer, (1995), financial transactions, both under public or private health insurance encompasses two components- flows of taxes and premiums from the payers, both employees and non-employees towards the health insurance plan; compensation or repayment operation encompassing the flow of funds from cover plans to the hospitals and health organizations. Thus, cost control strategies can be categorized as- those that aim for financing side and those that aim the impact the reimbursement side of the funding stream (Grumbach & Bodenheimer, 1995). Management of Cost Control Health care costs and Health Outcomes Health care facilities cannot be compromised at the cost of patients' safety and recovery. As a result, the costs of health care is enhancing, moreover with the increase in longevity, decreased mortality due to advancing medical facilities and drugs, higher percentage of elderly group is present in a given population, returns in the health care costs and health outcomes are reducing where as the expenditure in terms of insurance claims is enhancing, which is a burden on the hospital or health care organization. As the individual lives longer so the insurance companies have to pay for longer duration (Chapter 7: Painful Versus Painless Cost Control). Strategies of Cost Control: Control of price Inflation Rate of inflation is on a rise with faster pace as compared to the health care prices. Health care facilities are also becoming expensive as rising inflation directly influence the cost of all commodities including the health care prices or vice versa (Chapter 7: Painful Versus Painless Cost Control). Strategies of Cost Control: Eliminating Ineffective and Inappropriate Care In order to make the health care facility more efficacious it is essential that a standard care pattern must be followed and prescription of the doctor must encompass only the basic and most desirable treatment or care interventions. Unnecessary interventions not only enhance the cost of the treatment but also put burden on the insurance company. A constant reassessment is required to keep the cost of health care facilities low while providing the most efficacious health care (Chapter 7: Painful Versus Painless Cost Control). Administrative Waste Preventive measures to certain extent costs more as compared to the treatment. Thus, innovations must be implemented in order to save the cost, as preventive measures possess enduring impact. Priorities must be set to understand the professional ethics as well as patients' prognosis. This prevents the unnecessary expenditure and could promote in saving the money for effectual utilization (Chapter 7: Painful Versus Painless Cost Control). Conclusion Painful versus painless cost control is a method where any health care organization could judge all the parameters before implementing any reformations; as health care cost control directly influences people, it is necessary that the health care organizations should design the strategies to control the cost keeping every aspect related to the patient into consideration. Cost control is necessary to have savings for future prospects and thus certain reformats could be painful while others may sound to be painless. A health care organization must keep more of painless cost control in consideration for better outcomes (Chapter 7: Painful Versus Painless Cost Control). References Chapter 7: Painful Versus Painless Cost Control. (n.d.) Retrieved from http://www.black-schaffer.org/david/notes/classes/coco9/boden_chapter_7.html Grumbach, K., & Bodenheimer, T. (1994). Painful vs painless cost control. JAMA, 272, 1458- 1464. Grumbach, K., & Bodenheimer, T. (1995). Mechanism for Controlling Costs. Edited by Drummond Rennie, MD, Deputy Editor (West). Corresponding author: Kevin Grumbach, MD, University of California, San Francisco, Box 1364, San Francisco, CA 94143-1364. JAMA, 273(15), 1223-1230. Manchikanti, L., Singh, V., Bosewell, M. V. (2010). Interventional pain management at crossroads: the perfect storm brewing for a new decade of challenges. Pain Physician, 13(2), E111-40 Painful Vs Painless Cost Control. (n.d.) Retrieved from http://smallbusiness.chron.com/painful-vs-painless-cost-control-34668.html Read More