Direct costs
Direct Costs
Direct costs (/daɪˈrɛkt kɒsts/), in the context of Healthcare economics, refer to the explicit monetary expenses directly attributable to the provision of healthcare services. These costs are often associated with the diagnosis, treatment, and management of a patient's medical condition.
Etymology
The term "direct costs" originates from the field of Accounting, where it is used to describe costs that can be directly traced to a cost object, such as a product, service, or department. In the context of healthcare, the cost object is typically a patient or a specific medical condition.
Related Terms
- Indirect costs: These are costs that are not directly attributable to the provision of healthcare services, but are nonetheless necessary for the operation of the healthcare system. Examples include administrative costs, facility maintenance costs, and the cost of training healthcare professionals.
- Fixed costs: These are costs that do not change with the volume of patients or services provided. Examples include the cost of building and maintaining healthcare facilities, and the salaries of permanent staff.
- Variable costs: These are costs that change with the volume of patients or services provided. Examples include the cost of medical supplies, and the wages of temporary or part-time staff.
- Opportunity costs: These are costs that represent the value of the next best alternative that is forgone when a decision is made. In healthcare, this could be the value of other services that could have been provided with the resources used.
- Cost-effectiveness analysis: This is a method of economic evaluation that compares the costs and outcomes of different healthcare interventions to determine which provides the best value for money.
See Also
External links
- Medical encyclopedia article on Direct costs
- Wikipedia's article - Direct costs
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