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Value for Money

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Value for Money

  • This topic has 5 replies, 2 voices, and was last updated 4 years ago by AvatarJohn Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • January 5, 2022 at 12:49 pm #645342
    Avatarmaximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    Classify the following as either a measure of effectiveness, efficiency or economy according to the 3Es framework for an NHS hospital

    1) Have the waiting lists been reduced?
    2) What was the average cost per patient treated?
    3) Have mortality rates gone down?
    4) Did the hospital spend more or less on drugs this year?
    5) What was the average spend per bed over the period?
    6) Did the hospital spend more or less on nurses’ wages?

    Answers
    1 and 3 are Effectiveness
    2 and 5 are Efficiency
    4 and 6 are Economical.

    Professor, I have watched lecture and not but still unable to catch the concept.
    I am really confused between effectiveness and efficiency. Like in the question above I did 1 as effectiveness and 5 as Economical.
    Can you please help me out.

    January 5, 2022 at 2:44 pm #645352
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    The job of a hospital is to make people better. Measuring how well they are doing their job is measuring how effective they are. That is why 1 and 3 are measures of effectiveness.

    Efficiency is getting the most work out of the money spent. That is why 2 and 5 are efficiency.

    Economy is paying the lowest reasonable price in total. That is why 4 and 6 are measures of economy.

    January 6, 2022 at 6:11 am #645379
    Avatarmaximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    Thank you professor.
    You said that efficiency is getting the most work out of money spent. Is this generally for NPOs or specific for this question?

    January 6, 2022 at 7:18 am #645388
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    It is always the case.

    January 6, 2022 at 7:55 am #645394
    Avatarmaximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    Thank you 🙂

    January 7, 2022 at 9:01 am #645436
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    You are welcome.

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Value for Money’ is closed to new replies.

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