Reimbursements and cost–benefit analysis are ways to compare the costs and benefits of an intervention, where both are expressed in monetary units. (CDC, n.d.)

Cost–Benefit Analysis

1. Monetary Valuation

The analysis estimates that the following benefits are worth $140 billion:

Direct medical costs averted
Valuation of quality of life gained due to non-fatal heart attacks averted
Valuation of life years gained due to fatal heart attacks averted
Next, the analysis estimates that costs to the industry and consumers are $6 billion.

2. Calculation of Net Benefits

$140 billion in benefits minus $6 billion in costs equals $134 billion in net benefits. Therefore, benefits minus costs equals net benefits.
Net benefit = Benefits – costs
= $140 – $6
= $134 billion

Part A. Monetary Valuation

The analysis estimates that the following benefits are worth $200 billion:

Direct medical costs averted
Valuation of quality of life gained due to non-fatal heart attacks averted
Valuation of life years gained due to fatal heart attacks averted
Next, the analysis estimates that cost to the industry and consumers is $17 billion.

Calculate the net benefits.
What does the value tell you as an administrator relative to the benefit of the procedure?
Reimbursement methods
Part B. Answer the following questions:

What are the various reimbursement methods used by third-party payers?