INSURANCE Kaiser-Permanente Obesity session

by | Mar 13, 2023 | finance

INSURANCE (Kaiser-Permanente Obesity session)
Compare the decisions K-P made in the obesity program discussed in that case discussion with the investments we studied in the Seaman’s case.
[a] Specifically, how do the economics faced in the two cases differ? How would these conditions affect your decisions?
[b] Should the financial evaluation of a program (K-P Obesity) be essentially the same as what we did for the three types of physical investment for Seamans of differ in some material way? Explain?

 

 

Sample Solution

The decisions that Kaiser-Permanente made in the Obesity program discussed in the case discussion were largely based on economic considerations, such as cost-effectiveness and return on investment. In terms of economics, K-P faced a few key differences when compared with investments we studied from the Seaman’s case. The most notable difference is that K-P was dealing with an intangible asset (i.e., health outcomes) rather than tangible assets (such as capital equipment or software). This means that K-P had to take into account different factors such as the expected duration of the health outcomes, potential changes in patient compliance over time, and other unknown variables which would affect their decision making process.

Sample Solution

The decisions that Kaiser-Permanente made in the Obesity program discussed in the case discussion were largely based on economic considerations, such as cost-effectiveness and return on investment. In terms of economics, K-P faced a few key differences when compared with investments we studied from the Seaman’s case. The most notable difference is that K-P was dealing with an intangible asset (i.e., health outcomes) rather than tangible assets (such as capital equipment or software). This means that K-P had to take into account different factors such as the expected duration of the health outcomes, potential changes in patient compliance over time, and other unknown variables which would affect their decision making process.

When deciding whether or not to invest in a particular project or program, it is important for businesses to consider both financial and nonfinancial factors. In order to accurately evaluate any investment decision – whether it be physical investments (as in Seamans) or intangible investments (as with K-P’s obesity program) – one must first determine what type of value they are hoping to create through this investment i.e., reduced costs, increased revenues or improved customer satisfaction etc.. Then one can use either a quantitative analysis method such as Cost Benefit Analysis or Return On Investment calculations to quantify how much value is likely to be generated by investing in this particular project/program.

In conclusion then while there are similarities between investments considered by Seamans and those discussed by K-P; due largely to differences between tangible vs intangible assets being dealt with; these two cases require slightly different approaches for properly analyzing them from an economic standpoint . To truly evaluate any given investment effectively requires us look at both financial & nonfinancial criteria so doing some sort of combination Cost Benefit Analysis & Return On Investment calculation should prove useful here allowing business leaders accurately gauge amount value generated investing specific projects/programs

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