(Efficiency versus effectiveness) The health-care industry has recently found itself in a new era that is characterized by cost competition. As a result of the new emphasis on cost management, many existing practices are being revised or dropped. Following are changes that have been made by specific health-care providers. For each change mentioned, indicate whether the change is intended to control cost through increased efficiency or increased effectiveness. Also in¬ dicate whether the change represents cost understanding, cost containment, cost avoidance, or cost reduction. Discuss your justification for each answer.

746 PARI' V Cost Control

a. Before entering the hospital for chemotherapy, a patient’s health-care pro¬ vider required her to drink more than 2 quarts of water at home. By doing so, a day’s stay in the hospital for hydration was avoided.

b. By administering an antibiotic within 2 hours of each operation, a hospital reduced the postoperative infection rate from 1.8 percent of patients to .4 percent of patients.

c. Some surgeons have started removing the drainage tubes from heart-bypass patients 24 hours after the operation rather than 48 hours after the operation. The change reduces the length of the typical hospital stay.

d. Doctors at a major hospital tightened scheduling requirements for blood analysis so that results were obtained on the same day that the blood was drawn. The change allowed many patients to be dismissed immediately.

e. A hospital began a practice of paying about $130 per average dose of a new antinausea drug to be administered to chemotherapy patients. The drug al¬ lowed vomiting to be controlled much faster and the patient to be more comfortable and dismissed a day earlier.

[SOURCE: Facts based on Ron Winslow, “Health-Care Providers Try Industrial Tactics to Reduce Their Costs,” Wall Street Journal (November 3, 1993), pp. Al, A5.]