Using a value chain approach for effective decision making.

Abstract

Effectively managing costs in a healthcare environment may require taking a new look at how those costs are evaluated. The price of a product is not necessarily the most effective or efficient way of determining the actual cost. Using a value chain approach takes into consideration the functional costs of using a product as well, including both the "process" and "downstream" costs to an organization. In this article, Associate Professor Neil A. Wilner examines the differences between price and cost using a typical purchase in a healthcare environment.