JND in Healthcare Organizations

Successful healthcare organizations adopt innovative practices of modern-day businesses. Just Noticeable Difference (JND) refers to the minimal stimulation that a consumer can sense between two products. That smallest distinction in the stimuli that two products raise best explains JND. Healthcare organizations need to identify the JND of their products/services to ensure that the adverse changes in their products/services are not noticeable among consumers. The knowledge of JND of products is also essential in ensuring that the positive additions made on the products are visible and obvious to the customer. Customers view sudden change as a threat to their psychological comfort about a given product or service. Health product marketers have to introduce a change in a gradual manner in order to retain the confidence of the clients in the products.

Gradual change

When healthcare organizations intend to implement change in their products or services, the organizations need to make this change gradual for clients to accept the change. Marketers should be keen on JND issues especially when it comes to changing brands or logos of products. This change needs to be gradual so that the customers find themselves already part of the change rather than feel a sense of shock because of a change. For example, the case of Sony Entertainment’s acquisition of SAB is a perfect application of JND in marketing. Introduction of changes in the logo of SAB was gradual, and this had a significant influence in retention of customers or viewers.

Pricing policies

Marketers can use JND in order to make critical pricing decisions for their products. Pricing decisions usually result from keen analysis of healthcare costs and their associated profit margins. However, research shows that the human mind may not recognize an up to 10% variation of price whether an increase or a fall. This lack of recognition is irrespective of the type of product/service in consideration. Health organizations need to make pricing decisions based on a 10% margin. For example, in order for an organization to raise its prices, it is advisable for the new price to be less than 10% higher in order to retain its customers. If an organization intends to offer discount on its products, the pricing decision should involve a reduction of the price by more than 10% in order for the offer to be apparent and appealing to more clients.

Maximization of earnings

Healthcare organizations can secure their earnings by proper application of JND. The organizations can reduce their product size slightly so that consumers may not recognize the difference. The organizations tend to use this technique of maximizing earnings if the organization fears to increase its prices for the commodities. The reduction of the size of the commodity just below the JND enables the organization to cover for high cost of raw materials and increase earnings. This type of strategy best applies to companies that make confectionaries. These companies modify the size of their products in a way that the consumers cannot tell any changes. Other products undergo variations in terms of composition depending on the cyclical availability of certain raw materials.

Eye-catching changes

However, in situations where marketers introduce a positive attribute in a product, they need to ensure that the attribute stands out. The achievement of this strategy is through making the change significant than the threshold in indifference. For instance, when a pharmaceutical company introduces a flavor or a chemical agent, the company should ensure the flavor/agent is noticeable in the products so that the clients can see a sense of value addition. The companies may also change the packaging of their products in order to catch the eye of the client. These conspicuous changes in the product characteristics easily affect consumer perceptions and change their attitudes towards the products. Other characteristics such as the fragrance and pricing can also help in the making of a product stand out against those of competitors. In situations of too many brands for a given product, marketing needs to focus on the visual and appealing features of the products by making them surpass the threshold significantly. When an organization spices up these modifications with a vigorous and impactful promotion that puts the focus on the positive modifications, there is a high chance of success in the industry.

Advantageous growth

Application of JND is helpful to brands with weak identities, which raise confusion in the distinction with other products. Such brands can sell by imitating established brands in the market. This application of JND in order to make weak brands similar to reputable brands makes it a good marketing strategy for organizations of the weaker brands. The organizations of weaker brands can gain a significant market share and sell more as they capitalize on the indifference they create in the market.

Healthcare Investments for Sustainability of Care

Rising healthcare costs are increasingly becoming a threat to the sustainability of healthcare. Many organizations have been passing the healthcare costs to the consumers, thereby increasing disparities in financial access to care. There is need for healthcare organizations and hospitals to find ways to finance their services without creating undesirable social effects on the access to care. Healthcare organizations can achieve this by making investment decisions that generate additional funds for sustaining healthcare services.

Aging population

With the increasing population of the aged, this population segment can offer opportunities for investment on their unique needs. This population segment needs more rehabilitative care. Health organizations can invest in nursing centers for the aged, providing a comprehensive range of services for the aged.

Cosmetic health services

Cosmetic health services have been facing a rising demand in the recent times. Reconstructive surgeries, dental formula restructuring, and other cosmetic services can be a good source of income for investors in healthcare. Health organizations can take advantage of these social needs, and invest in these to provide finance for core health services.

Funeral homes

Changing population needs and innovations can see funeral homes generating very good revenue for health organizations. This is an investment with a huge potential and many opportunities. An in-depth analysis of this investment option will be posted here soon.

Personalized medicine

Personalized care and home-care services are investment opportunities worth keen consideration. The provision of these services is done at premium rates. The Health Services Manager has to ensure a balance in provision of these services in order to offer core services without human resource constraints.

Technological innovations

Investment in technology has a positive influence on cost reduction. Although initial investment cost is usually high, the long run cost effect is desirable. These savings from application of advanced technologies can be reinvested back in sustaining healthcare services.

Sustainability of care is important. Achievement of this is possible in application of innovative healthcare related investment options without relying on donor or government funding. 

Proper Management Practices for Drugs and Other Health Commodities

Drugs, vaccines, and non-pharmaceutical commodities form a large percentage of most health organization's budgets, in most cases going up to half of the proposed annual expenditure. These costs usually go higher due to inadequate management practices of these commodities, leading to wastage. Wastage may result from poor handling of the health commodities, improper storage, improper usage, and fraudulent practices within the organization.

Quantification

The estimation of the annual demand for the commodities is the first point that determines the cost to be incurred. A careful analysis of the previous consumption data and morbidity patterns is important in developing estimates that are more accurate. Under or over estimation have their associated costs.

Procurement

In procuring these commodities, proper management starts with the proper choice of the supplier. There is a high tendency of selecting the lowest bidder in procurement, but this is not a sufficient basis of selection for a supplier. Other important variables to put into consideration are quality of product, reliability of a supplier, and volume of transactions the potential supplier can provide. Consideration of the offer price is key, but there also needs to be compliance checks on all the other variables since they affect the organization’s operations and costs.

Documentation

There needs to be adequate and accurate documentation of transactions.  These transactions include acquisition, acceptance, disposal, rejects, and dispensation of commodities. Proper documentation helps to avoid errors and fraudulent acts. The LPOs/LSOs, invoices, receipt notes, delivery notes, payments, CRIVs, bin cards, stock control ledgers, cash book, credit notes, debit notes, bank statements, and other records need to be reconciled to reflect the authenticity of the transactions done.

Transportation and delivery

Placement of orders is done well in advance, considering the lead-time and stock level. The ordered commodities need transportation under the right conditions with proper handling. Those that require cold chain maintenance need transport facilities that ensure maintenance of the cold chain. The delivered commodities are inspected in order to ensure they are in the right condition and quantity. The organization can return to the supplier, or accept damaged goods at a lower price depending on nature of the commodity under consideration. The relevant documents should accompany the goods on deliveries and returns.

Storage and dispensation

Right conditions are necessary in storage of health commodities based on their specific requirements on temperature, lighting, humidity, security, spacing among other conditions. This avoids further wastage because of damages, pilferage, and theft. The dispensation of commodities should consider demand of the user department. Application of the appropriate stocking system is also crucial in dispensation to avoid wastage as a result of expiries. The most commonly advocated stock management system is FIFO (First In First Out), although there also has been recent ideologies on FEFO (First to Expire First Out).

Careful consideration of these practices ensures cost saving strategies have been put in place to minimize wastage.

Future Challenges for Health Systems Management

Healthcare/system management is one of the professional practices that are rapidly changing with time. This dynamic practice therefore has experienced various uncertainties and challenges with changing times in the past. Some of the future challenges healthcare managers are likely to face, are analyzed in the following sections.

Escalating healthcare costs

Health care management will be faced with the challenge of minimizing healthcare expenditure which has been brought about by the trend of rising health care costs annually (Walshe & Smith, 2011). Research has shown that, for example, in the year 2001, the United States of America (U.S.A) had 14.1% of its Gross Domestic Product (G.D.P.) committed to covering health care costs. Going by the upward trend, this expenditure had been predicted to rise to 17.7% of G.D.P.in the year 2012 and continued increase in the subsequent years. This poses a great challenge to healthcare management professionals on how to contain these rising costs and increase efficiency in health care delivery.

Social disparities/inequities in health

One of the goals in health care management is to increase the access to quality health care in a fair way. Health care management is faced with the challenge of enhancing fairness and access in healthcare provision, due to the rising pressure on the public to pay for the healthcare services as a cost containment measure. This has limited the financial access of the poor to quality health care services, thus creating disparities in health status on the basis of income/social status. These disparities are likely to increase in the future as long as the cost of care is still being passed on to the consumers.

New healthcare technologies

Development of new drugs and technologies has been instrumental in improving the health of the population, although, it has also had its share of challenges in the health care industry. Many of these new technologies are expensive and may receive partial insurance coverage (Geisler, Krabbendam, & Schuring, 2003). Insured persons are thus quite often required to cover the high costs of these new technologies and prescription drugs. As the number of new technologies increase with time, healthcare managers are likely to be faced in the future by a conflict of interest between the benefits of new technologies to the society, and the need to minimize coverage of such new technologies in a bid to reduce healthcare expenditure

Emergence and re-emergence of diseases

The increasing burden of disease is another challenge that is currently facing healthcare management and is likely to be worse in the future. This will put a lot of pressure on healthcare managers to continuously review their healthcare priorities for the population. Emerging and re-emerging of conditions is proving a challenge in relation to frequent diversion of attention and action, which is likely to negatively influence overall health outcomes. An initial focus on infectious diseases in the 1960s was diverted to an increased focus on non-communicable diseases in the 1990s. A rise of the number of drug-resistant bacterial infections has been experienced in the past, and the trend is set to continue in the future. Health care management is thus faced with an additional challenge of investing more in research under its already constrained budget.

Complex client-provider relationship

The increasing complexity of the relationship between patients/clients with providers of healthcare will present a great challenge in the future. This relationship has been shifting from patient-provider to customer-provider, where patients/clients are insisting on their choice of treatment/care, confidentiality of information and informed consent. This continued empowerment of clients on health matters may result in increased risks of litigation against providers. Health care management will therefore be faced with the challenge of enhancing ethical practices among its providers in order to minimize ligation costs, and enhance patient/client satisfaction.

In conclusion;

Health care management being a dynamic field, is likely to be faced with various challenges ranging from rising expenditure, increased disparities in access to care, introduction of new technologies, increased burden of disease, to developing complexities in patient-provider relationships. These challenges need careful strategic planning to achieve the desired health care outcomes in the future.