Royal Health Hospital (RHH) is a not-for-profit, public sector hospital. It is funded entirely by the government from taxation and a fixed level of funding is received from the government each year. It is up to RHH to allocate its funding to different areas, such as doctors salaries, medicines and all other costs required to run a hospital. One of RHH's objectives is to provide value for money for the taxpayer, as measured by the '3Es' framework of economy, efficiency and effectiveness.

Required:

1. Explain the meaning of economy, efficiency and effectiveness for RHH, incorporating specific examples and performance indicators for each of the 3Es.

(Maximum word count: 480 words)

(15 marks)

2. Explain why non-financial performance indicators are particularly important to measure the performance of not-for-profit organizations such as RHH.

(Maximum word count: 320 words)