In Disease Detectives, I talked about the utilisation of limited resources.
So the question is what factors come into play when making decisions about what are the best possible interventions/actions we should take.
Opportunity costs is one of those factors.
In healthcare our main issues are
- How do we get the best outcomes
- How do we reach the most amount of people
- How do we keep costs low or within the scope of the resources available
And this of course means we always have to make choices, and opportunity costs is one of the guiding factors in this decision making process. So what is opportunity costs?
It is basically the potential good outcome that is lost by the utilisation of resources or efforts in another area/intervention.
What on earth does this even mean?
The easiest way I understand this is in terms of hospital beds (in wards) and primary health care centres (outpatient/GPs).
So let us say we figure out that if one person is admitted in hospital, the same amount of funds could have been allocated to treating 15 people in a GP setting. So this is an opportunity cost because by having that one bed/admission, we lose the funds to treat 15 people in an outpatient setting.
And if I relate it to paediatrics, for every child admitted to ward requiring their parents to take time off work – that time spent in the hospital with one child also means a missed activity with other family/children or even wages lost .
Why is this important?
Because it shows us that requiring admission for treatment really should be a last resort and that it would be more cost effective if we could reduce the number of admissions.
So the next question is how do we figure out which is the best way to do that?