This paper examines two interconnected dimensions of healthcare management. The first section describes how analytics transforms patient data from electronic health records into actionable insights that improve outcomes, prevent disease, and enhance diagnostic accuracy, while exploring how health information technology (HIT) both enables and shapes this process. The second section addresses managerial economics in healthcare settings, explaining how profit maximization principles guide pricing decisions using marginal cost and marginal revenue analysis, and detailing the process and calculation of target costing as a strategic tool for cost reduction during product planning and design.
Thanks to today's advances in technology, the relevance of analytics in healthcare cannot be overstated. As Cornelius (2015) points out, "advances in technology have enabled the medical community to generate and capture more data than ever before" (p. 95). In essence, analytics in healthcare involves the utilization of available and relevant data — primarily patient data — to derive meaningful and actionable insights. This data is most commonly obtained from electronic medical records (EMRs) and electronic health records (EHRs).
In basic terms, it is through analytics that both structured and unstructured data is transformed into information that is not only meaningful, but also useful for enhancing the efficiency of services offered in a healthcare setting. Analytics therefore come in handy in organizing data "to improve patient health and outcomes, help prevent and detect diseases, and diagnose diseases with more accuracy" (Cornelius, 2015, p. 95).
Health information technology (HIT) plays a critical role in supporting healthcare analytics. Given the enormous volume of data generated in any healthcare setting, it would be impossible for healthcare personnel to manage such data without the assistance of computerized systems. In addition to helping reduce — or in some cases eliminate — errors in the handling of medical data, HIT enhances efficiency and supports better cost management. According to Kabene and Wolfe (as cited in Kabene, 2010), technological advances and HIT specifically "have made way for the implementation of electronic health records (EHRs), the comprehensive compilation of health care provided to an individual over their lifetime — an exciting and impressive accomplishment" (p. 60).
"Applying marginal cost and revenue to pricing decisions"
"Steps and formula for calculating target cost in management"
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