A cost benefit analysis of continued stay certification

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Published on: February 13, 2020

R F Averill, L F McMahon

    Medical Care
    |February 1, 1977
    PubMed

    Insights

    Professional Standards Review Organization Program reviews aim to cut hospital costs by assessing inpatient needs. However, a cost-benefit analysis reveals that review expenses likely outweigh potential financial savings from eliminating unnecessary hospitalizations.

    Area of Science:

    • Healthcare Management
    • Health Economics
    • Public Health Policy

    Background:

    • The Professional Standards Review Organization Program focuses on reviewing inpatient care.
    • A key objective is to control healthcare expenditures by reducing unnecessary hospital stays.

    Purpose of the Study:

    • To evaluate the cost-effectiveness of the Professional Standards Review Organization Program's inpatient review process.
    • To determine if the financial benefits of eliminating unnecessary hospitalizations justify the program's operational costs.

    Main Methods:

    • A cost-benefit analysis was conducted on the review procedures.
    • Resource allocation within the Professional Standards Review Organization Program was examined.

    Main Results:

    • The review process consumes a significant portion of the program's resources.
    • Potential financial savings from reducing unnecessary hospitalizations are unlikely to exceed the costs of the review process.

    Conclusions:

    • The current inpatient review process by the Professional Standards Review Organization Program may not be cost-effective.
    • Further analysis is needed to optimize resource allocation and improve the financial viability of hospital cost containment strategies.

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