Create a 5–6-page cost benefit analysis that supports a risk financing recommendation for a selected organization.
Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in a sequence.
In your current and future role as a health care leader, you can expect to conduct a cost-benefit analysis (CBA) to determine whether the positive benefits of a proposed recommendation outweigh the negative costs.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 1: Conduct an environmental assessment to identify quality- and risk-management priorities for a health care organization.
- Competency 2: Apply a risk-management model or framework to a specific risk-management priority.
- Competency 3: Analyze the process and outcomes of a care quality- or risk-management issue.
- Competency 5: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration.
- Specify the focus and stakeholders for a cost-benefit analysis.
- Develop a value proposition for change management that incorporates quality- and risk-management concepts.
- Describe strategies to influence and impact the needed changes for quality improvement.
- Conduct a cost-benefit analysis for a risk-management intervention.
- Identify relevant internal and external benchmarks, using a systems-based perspective.
Use correct grammar, punctuation, and mechanics as expected of a graduate learner.Create a 5–6-page cost benefit analysis thatsupports a risk financing recommendation for a selected organization.Note:The assessments in this course build upon each other, so you are stronglyencouraged to complete them in a sequence. In your current and future role as a health careleader, you can expect to conduct a cost-benefit analysis (CBA) to determinewhether the positive benefits of a proposed recommendation outweigh thenegative costs.Bysuccessfully completing this assessment, you will demonstrate your proficiencyin the following course competencies and assessment criteria:·Competency 1: Conduct anenvironmental assessment to identify quality- and risk-management prioritiesfor a health care organization.Specify the focus and stakeholders for a cost-benefitanalysis.Develop a value proposition for change management thatincorporates quality- and risk-management concepts.Describe strategies to influence and impact the neededchanges for quality improvement.·Competency 2: Apply arisk-management model or framework to a specific risk-management priority.Conduct a cost-benefit analysis for a risk-managementintervention.·Competency 3: Analyzethe process and outcomes of a care quality- or risk-management issue.Identify relevant internal and external benchmarks, using asystems-based perspective.·Competency 5:Communicate in a manner that is scholarly, professional, and consistent withexpectations for professionals in health care administration.Use correct grammar, punctuation, and mechanics as expectedof a graduate learner. COST BENEFIT ANALYSIS TEMPLATE
Step 1: Enter cost amounts as future value (FV) expectations. The future value will be automatically converted to present value
Enter benefit amounts as FV expectations. The FV will automatically be converted to PV. Step 3: Subtract the total PV benefits
PV costs to get the net benefit.
Current Year
(CY)
Costs
CY +1
CY +2
CY +3
CY +4
Total Costs (Future Value)
Total Costs (Present Value)
blank row
Benefits
Total Benefits (Future Value)
Total Benefits (Present Value)
blank row
Present Value Discout Rate
PV Denominator
Net Benefit
End of worksheet
$
$
–
$
$
Current Year
(CY)
$
$
–
–
$
$
CY +1
$
$
–
–
$
$
CY +2
$
$
–
–
$
$
CY +3
$
$
–
–
CY +4
$
$
–
2%
1.00
1.02
1.04
1.06
1.08
atically converted to present value (PV). Step 2:
p 3: Subtract the total PV benefits from the total
Total Costs
CY +5
$
$
–
$
CY +5
$
$
–
–
Total Benefits
$
–
$
–
1.10
Running head: COST-BENEFIT ANALYSIS
1
Cost-Benefit Analysis
Name
Capella University
Health Care Quality, Risk, and Regulatory Compliance
Assessment 3
Date
COST-BENEFIT ANALYSIS
2
Abstract
Focus of Stakeholders for a Cost-Benefit Analysis
[Specify the focus and stakeholders for a cost-benefit analysis]
Value Proposition for Change Management
[Develop a value-based proposition for change management that incorporates quality and
risk-management concepts.]
Strategies to Influence and Impact the Changes for Quality Improvement
[Describe strategies to influence and impact the needed changes for quality
improvement.]
Cost-Benefit Analysis
[Conduct a cost-benefit analysis for a risk-management intervention. Use the Tool
provided, then discuss your findings here. Be sure to also upload the Excel Tool.]
Internal and External Benchmarks
[Identify relevant internal and external benchmarks, using a systems-based perspective.]
Conclusion
COST-BENEFIT ANALYSIS
3
References
Overview
Create a 5–6-page cost benefit analysis that supports a risk financing recommendation
for a selected organization.
Note: The assessments in this course build upon each other, so you are strongly
encouraged to complete them in a sequence.
In your current and future role as a health care leader, you can expect to conduct a costbenefit analysis (CBA) to determine whether the positive benefits of a proposed
recommendation outweigh the negative costs.
By successfully completing this assessment, you will demonstrate your proficiency in the
following course competencies and assessment criteria:
•
•
•
•
Competency 1: Conduct an environmental assessment to identify quality- and riskmanagement priorities for a health care organization.
• Specify the focus and stakeholders for a cost-benefit analysis.
• Develop a value proposition for change management that incorporates qualityand risk-management concepts.
• Describe strategies to influence and impact the needed changes for quality
improvement.
Competency 2: Apply a risk-management model or framework to a specific riskmanagement priority.
• Conduct a cost-benefit analysis for a risk-management intervention.
Competency 3: Analyze the process and outcomes of a care quality- or risk-management
issue.
• Identify relevant internal and external benchmarks, using a systems-based
perspective.
Competency 5: Communicate in a manner that is scholarly, professional, and consistent
with expectations for professionals in health care administration.
• Use correct grammar, punctuation, and mechanics as expected of a graduate
learner.
Content
In your current and future role as a health care leader, you can expect to conduct a CBA.
You may be asked to offer three alternatives and to make a recommendation.
Plowman relates that “a cost benefit analysis is used to evaluate the total anticipated
cost of a project compared to the total expected benefits in order to determine whether
the proposed implementation is worthwhile for a company or project team.” Plowman
also identified the three parts of a CBA to be the following:
•
Identification of potential costs.
• Recording of all anticipated benefits.
• Examination of the differences to determine if positive benefits outweigh
negative costs.
A pre-formatted Excel spreadsheet that can be used as a template for CBAs is a good
tool to have in your personal toolbox. Inputting data is simply the first step. As you fill
out templates, always consider the numbers within the context of an organizational
mission, strategic direction, patient safety, risk-management issues, regulatory
requirements, patient and stakeholder satisfaction, and also the dynamics within the
health care industry.
Reference
Plowman, N. (2014). Writing a cost-benefit analysis. Retrieved from
http://www.brighthub.com/office/project-management/articles/58181.aspx
Questions to Consider
As you prepare to complete this assessment, you may want to think about other related
issues to deepen your understanding or broaden your viewpoint. You are encouraged to
consider the questions below and discuss them with a fellow learner, a work associate,
an interested friend, or a member of your professional community. Note that these
questions are for your own development and exploration and do not need to be
completed or submitted as a part of your assessment.
•
•
•
•
What steps do you need to take in order to align a CBA with an organization’s
mission and strategy?
If you were to offer three alternative recommendations after a CBA, what types
of elements would you consider to differentiate them from one another?
How would you substantiate a recommendation for reducing financial risks in a
health care setting when the quality of care is involved?
What are the three parts of a CBA?
Recourses
Required Resources
Required Resources
The following resources are required to complete the assessment.
•
Cost-Benefit Analysis Template [XLSX].(THIS IS ATTACHED)
Assignment Instruction
Note: This assessment should be completed third.
Preparation
Scenario
Suppose an issue has emerged in your organization that presents significant risks to the
stakeholders involved. Your supervisor has asked you to conduct a CBA, make a
recommendation, and present it to the board of directors. You are expected to consider
the numbers within the context of the organizational mission, strategic direction,
patient safety, risk-management issues, regulatory requirements, patient and
stakeholder satisfaction, and the dynamics within the health care industry.
Select a relevant issue within your workplace (or one from the Suggested Resources) for
which a CBA may be conducted. The CBA should include one of the following courserelated topics:
•
•
•
•
•
•
Quality.
Patient safety.
Risk management.
Regulatory standards.
Compliance.
Patient and stakeholder satisfaction.
Instructions
Step One: Identify Costs
Apply the process from Writing a Cost-Benefit Analysis article (from the Required
Resources) to identify costs:
1. Make a list of all monetary costs that will be incurred upon implementation and
throughout the life of the project. These include start-up fees, licenses, production
materials, payroll expenses, user acceptance processes, training, and travel expenses,
among others.
2. Make a list of all non-monetary costs that are likely to be absorbed. These include time,
low production of other tasks, imperfect processes, potential risks, market saturation or
penetration uncertainties, and influences on one’s reputation.
3. Assign monetary values to the costs identified in steps one and two. To ensure equality
across time, monetary values are stated in present value terms. If realistic cost values
cannot be readily evaluated, consult with market trends and industry surveys for
comparable implementation costs in similar businesses.
4. Add all anticipated costs together to get a total costs value (Plowman, 2014).
Step Two: Identify Benefits
Continuing with the CBA, proceed with the identification and quantification of benefits,
per Writing a Cost-Benefit Analysis article.
1. Make a list of all monetary benefits that will be experienced upon implementation and
thereafter. These benefits include direct profits from products or services, increased
contributions from investors, decreased production costs due to improved and
standardized processes, and increased production capabilities, among others.
2. Make a list of all non-monetary benefits that one is likely to experience. These include
decreased production times, increased reliability and durability, greater customer base,
greater market saturation, greater customer satisfaction, and improved company or
project reputation, among others.
3. Assign monetary values to the benefits identified in steps one and two. Be sure to state
these monetary values in present value terms as well.
4. Add all anticipated benefits together to get a total benefits value (Plowman, 2014).
Cost-Benefit Analysis
Enter the cost and benefit data you developed for the CBA in your preparation steps
into the Cost-Benefit Analysis Template, linked in the Required Resources.
Then, write an analysis in which you do the following:
•
•
•
•
•
•
Describe the organizational, program, or departmental issue for which you have created
the CBA.
Evaluate the cost versus benefit according to the general guidelines outlined by
Plowman’s 2014 article, which you read in the preparation for this assessment.
Make a recommendation as to whether the benefits are sufficient to outweigh the costs
of the proceeding.
Describe the systems-based context for your recommendations, integrating the CBA
within the organization as a whole.
Describe how the issue relates to the organization’s vision, mission, and strategic
direction.
Provide a rationale that explains how your recommendations are appropriate for your
organization’s capacity and strategy.
Your analysis should use proper APA style and formatting and include the following
sections. Each section, except the title page, should include the appropriate section
heading.
1. Title page: Use APA formatting and include the following:
•
•
•
•
•
Assessment number (Assessment 3).
Your name.
The date.
The course number (MHA-FP5014).
Your instructor’s name.
2. Abstract: Include a one-paragraph summary of analysis content. This is not an
introduction to the topic, but a summary of the entire analysis. Make sure to doublespace.
3. Issue description.
4. CBA evaluation.
5. CBA recommendations.
6. Context for recommendations.
7. Relationship to vision, mission, and strategy.
8. Rationale.
9. Conclusion.
10. References.
11. Appendix: Attach your completed Cost-Benefit Analysis Template.
Additional Requirements
•
•
•
•
Written communication: Written communication should be free from errors that detract
from the overall message.
Length of paper: 5–6 typed, double-spaced pages.
Font and font size: Times New Roman, 12 point.
Appendix: Include your Cost-Benefit Analysis Template as an appendix to your analysis.
Reference
Plowman, N. (2014). Writing a cost-benefit analysis. Retrieved from
http://www.brighthub.com/office/project-management/articles/58181.aspx
7/17/2019
Cost-Benefit Analysis Scoring Guide
Cost-Benefit Analysis Scoring Guide
CRITERIA
NON-PERFORMANCE
BASIC
PROFICIENT
DISTINGUISHED
Specify the focus
and stakeholders for
a cost-benefit
analysis.
Does not specify
the focus and
stakeholders for a
cost-benefit
analysis.
Specifies the focus and
stakeholders for a costbenefit analysis, but the
focus is too broad or
narrow and some
stakeholders are omitted.
Specifies the
focus and
stakeholders for
a cost-benefit
analysis.
Specifies the focus and
stakeholders for a costbenefit analysis and
explains why the
stakeholders would be
interested in the outcome of
the analysis.
Develop a value
proposition for
change management
that incorporates
quality- and riskmanagement
concepts.
Does not develop
a value
proposition for
change
management that
incorporates
quality- and riskmanagement
concepts.
Develops a value
proposition for change
management that
incorporates quality- and
risk- management
concepts, but the value
proposition is either
incomplete or flawed.
Develops a value
proposition for
change
management that
incorporates
quality- and riskmanagement
concepts.
Develops a value
proposition for change
management that
incorporates quality- and
risk- management concepts
and cites appropriate
current literature to support
the proposition.
Describe strategies
to influence and
impact the needed
changes for quality
improvement.
Does not describe
strategies to
influence and
impact the needed
changes for
quality
improvement.
Describes strategies to
influence and impact the
needed changes for
quality improvement, but
the strategies are either
inappropriate or
ineffective.
Describes
strategies to
influence and
impact the
needed changes
for quality
improvement.
Describes strategies to
influence and impact the
needed changes for quality
improvement and cites
relevant sources in the
literature to justify the
strategies.
Conduct a costbenefit analysis for a
risk-management
intervention.
Does not conduct
a cost-benefit
analysis for a risk
management
intervention.
Conducts a cost-benefit
analysis for a risk
management intervention,
but the analysis is either
incomplete or flawed.
Conducts a costbenefit analysis
for a risk
management
intervention.
Conducts a cost-benefit
analysis for a risk
management intervention
and describes the
assumptions on which the
analysis is based.
Identify relevant
internal and external
benchmarks, using a
systems-based
perspective.
Does not identify
relevant internal
and external
benchmarks,
using a systemsbased
perspective.
Identifies internal and
external benchmarks,
using a systems-based
perspective, but the
benchmarks are not
relevant or of questionable
value.
Identifies
relevant internal
and external
benchmarks,
using a systemsbased
perspective.
Identifies relevant internal
and external benchmarks,
using a systems-based
perspective, and clearly
identifies the source of each
benchmark.
Use correct
grammar,
punctuation, and
mechanics as
expected of a
graduate learner.
Does not use
correct grammar,
punctuation, and
mechanics as
expected of a
graduate learner.
Uses correct grammar,
punctuation, and
mechanics as expected of
a graduate learner, but
with some errors and
lapses.
Uses correct
grammar,
punctuation, and
mechanics as
expected of a
graduate learner.
Uses correct grammar,
punctuation, and mechanics
as expected of a graduate
learner, conforming to all
APA standards and
guidelines.
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