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A government body uses measures based upon the ‘three Es’ to the measure value for money generated
by a publicly funded hospital. It considers the most important performance measure to be ‘cost per
successfully treated patient’.
Which of the three E’s best describes the above measure?
A Economy
B Effectiveness
C Efficiency
D ExternalityShouldnt the answer for this be effectiveness? Since it relates to cost per unit of successfully treated patient and not cost per unit of patient. And if not then what would be effectiveness in this scenario?
Effectiveness is measuring how successful they are, so in the case of a hospital something like the % of patients getting better, or the % death rate.
Measuring the cost per successful patient is not measuring how successful there are (it may be that on 1% of patients are treated successfully, and so whatever the cost turned out to be it would be be very effective if only 1% of them are successful 🙂 )
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