Importance of Productivity in Healthcare Organization

Recent statistics show that there have been numerous research efforts to investigate importance of productivity in healthcare organizations. In order to assess benefits of productivity in healthcare, the two major factors that are investigated are policies governing this sector and analyzing data of research in health productivity. Productivity in healthcare can lead to quality changes that include costs, and benefits to patient’s recovery. According to health experts, productivity has brought positive changes to the health of people and affordable medical bills (Sheldon, 1996). Through productivity, managers of healthcare organizations would be able to plan and improve competence levels within the organization. Measures to ensure productivity would also create forums to reward employees for their efforts.

How to increase employee’s productivity?

In any organization, it is not only enough for employees to work and earn their wages. However, it is important that activities of an organization are run in an efficient manner so that results can be felt by both the organization and employees. Lower production inputs and efficiency are likely to make the organization to fall. Most employers would tend to blame employees for lack of productivity. On the contrary, a lot more has to be done to improve the conditions of work and environment. I am going to propose some factors that can help employees improve their productivity at work. Introducing the aspect of accountability among them is a good approach to improve their performance. By making them accountable for their actions, they will be more responsible at individual level and will reduce the behavior of blaming others. Through follow ups, productivity of employees would increase. Apart from setting targets, employers should always follow on the progress of work so as to assess or make improvements if there is need. According to Kassirer and Angell M. (1994), “Another way to make employees boost their performance is using incentives and encouragement.” They would feel good when offering their services because they know that somebody recognizes their efforts. Employees productivity can increase as a result of targets they have been given in the sense that, if the targets given are realistic, they are highly likely to be productive compared to when they are given unrealistic targets. Encouraging team work can boost the morale of employees because they get forums to share ideas which in the end can translate to high productivity.

How to calculate productivity

Judging productivity in healthcare is difficult than examining it in other areas of the economy because it involves treating patients which is a complicated process compared to delivery of goods and services. The process of assessment entails inputs of the patient’s behavior and health experts in the healing process making it difficult to design a procedure for assessment. The following steps can help when calculating productivity in an organization: First, you need to find out work output for an individual worker within a specific period of time then you equate it in terms of units or money. The second step is to note the time the employee was dedicated to the work of the organization including supervision. Using the results in step one and two, calculate the ratio of work output and the number of hours worked. The answer is an expression of work productivity.

Cost effectiveness model

Cost effectiveness is a phenomenon commonly used in healthcare evaluation and works in a manner that compares service delivery to monetary compensation. Some health researchers define it as a means through which some single unit of service delivery like the years gained in life expectancy, or the number of deaths avoided from diabetes. Comparing the two models, cost utility would focus in the number of years gained while cost effectiveness focuses on the monetary value. In the model of cost effectiveness, independent and exclusive variables are considered separately. In independent variables, cost effective ratios are computed and ranked while for exclusive variables, a number of selections would be made from different periods of time for treatment of the same condition.

Cost benefit model

Dolan (1999) argues that, “Cost benefit analysis is another widely used approach in making decisions in organizations.” In this model, simple techniques are used to determine whether change is necessary. As derived from its meaning, using this approach comes with benefits associated with what need to be done. Costs can be incurred at once or it can be continuous, while benefits are gained continuously with time. Dolan (1999) further says, ‘Cost benefit analysis would factor in time by computing the payback period, that is, the time it takes for benefit of change to incur its cost.” The variables used in cost benefit analysis are monetary cost and benefits only. For it to be used, an analysis is done to estimate the cost that would be incurred in bringing change. After drafting the possible cost of change, another one is done to come up with estimates of the possible benefits of the change. In a case that cost or benefits are received over a length of time, the time it takes to repay cost is calculated. In addition to monetary costs and benefits, other intangible variables can be included in the analysis by estimating its value which may complicate the process at times.


Dolan P. (1999). Valuing health related quality of life: issues and controversies. Pharmacoeconomics, 15 (2): 119-27.

Sheldon T. (1996) Problems of using modelling in the economic evaluation of health care. Health Economics, 5 (1): 1-11.

Kassirer JP and Angell M. (1994) The journal’s policy on cost effectiveness analyses [editorial]. N Engl J Med, 331 (10): 669-70.

Find out your order's cost