Healthcare Resource Allocation | MyPaperHub

Healthcare Resource Allocation

​Resource allocation is a critical aspect in healthcare delivery, and it includes all the ways in which organizations manage their provisionsResources consumed in a typical healthcare facility include equipment, pharmaceuticals, human resources, and others (Asbu et al., 2020, p. 44)However, the technical efficiency and effectiveness of a hospital can only be attained when these resources are used and allocated optimally(44)Notably, like any other organization, healthcare facilitiesmust commit to producing outputs that are most desired while making minimal use of available resources (Asbu et al., 2020)In this regard, the World Health Organization recommends thathealthcare managers must curb healthcare expenditure wastage and address the causes of inefficiencies in hospitals (Asbu et al., 2020)Therefore, certain essential areas influencing resource allocation (based on a healthcare organization) and healthcare organizational effectiveness must be understood

Reasons for Allocating Resources Based oa Healthcare Organization

Reason 1: A Healthcare Organization’s Decision Making

​Resource allocation in healthcare organizations is based on the methods, requirements, and scope of decision-making. Besides, decision-makers largely influence allocations since their opinions represent those of the hospitals (Harris, Allen, Waller & Brooke, 2017p. 44). Depending on the types and scopes of decisionsfacilities may allocate resources in response to their day-to-day activities or critical incidences (44)For example, patient feedback or even new government legislation may determine how hospital decision-makers arrive at their decisions (Harris et al., 2017). Other factors include budget shortfalls, changing demand for services, and changing population needs. 

​Decision-making criteria also determine resource allocation at the decision levelAccording to Harris et al. (2017), a lack of proper decision-making criteria may lead to hospitals implementing wrong resource-allocation decisions (44)In this regard, the authors recommend that decision-makers and hospital committees identify evidence from local data and research to aid resource allocation (Harris et al., 2017)For example, decision-makers may first consider the cost-effectiveness and safety assessment as evident from research before finally deciding on allocation. To eliminate skepticism, the criteria must also include prompts and reminders to consider disinvestment (Harris et al., 2017)For instance, the hospital committee must not make decisions without the minimum quorum

Reason 2A Healthcare Organization’s Governance

​Governance factors that dictate resource allocation in a healthcare facility include accountability, transparency, procedures, policies, and oversight. Other factors are the personnel who govern the processes and systems, organizationalrequirements, reporting, quality improvement processes and systems, and conflicts of interest management (Harris et al., 2017). Members of hospital committees and individuals at the top of the decision-making hierarchy must have the same understanding of the management processes. In this regard, members down the hierarchy must be sure of decision-making processes to avoid inconsistencies, confusionsand ambiguities(Harris et al., 2017). On the contrary, higher-level members must offer support and guidance to their counterparts and properlyhelp with recommending the course of action. 

​Moreover, decision-making committees’ agendas must include specific requirements like procedures and policies for resource allocation decisions. Notably, Harris et al. (2017) note that informal governance leads to inefficient resource allocation. Nevertheless, decision-makers must establish quality improvement measures in resource allocation processes and systems (Harris et al., 2017). The authors also recommend a process of review to ensure decisions made comply with good governance. 

How Resource Allocation Improves Organizational Effectiveness

Identification of Opportunities

​Resource allocation may increase hospital effectiveness inmany ways. For example, stakeholder consultation, expertopinionhealth service data, research, and other methods thatidentify opportunities for investment or disinvestment may enhance performance in healthcare organizations (Harris, Green & Elshaug, 2017). Foremost, primary studies and synthesized evidence are helpful in evaluating the efficiency of nationally-funded healthcare organizationsFor instanceHarris et al.(2017) note that research may help make disinvestment decisions where resources of low medical values are withdrawn and invested elsewhereSimilarly, proactive and routine investigation of available health service data may point out areas of resource underuse or misuse. 

​The local ownership of projects and stakeholder engagement are also essential in determining hospital effectiveness as a result of resource allocation. For instance, nominated clinicians may be asked to recommend areas of resource disinvestment and investment targets to increase the efficacy of hospitals (Harris et al.2017)Nevertheless, professional bodies and health agencies may list resources and practices which have little benefit for disinvestment. Other disinvestment targets may include tests, programs, treatments that offer low or no value to patients (Harris et al., 2017)Economic frameworks may also be helpful in determining hospital priority settingsFor instance, principles such as marginal analysis and opportunity cost may increase hospital effectiveness by deciding where scarce resources will be invested. 


​Along with prioritization, equitable and transparent decision-making aid in enhancing healthcare organizations’ effectiveness. In this regard, prioritization tools identify reinvestment and disinvestment targets in local healthcare settings (Harris et al., 2017). For instance, decision-makers may consider factors that affect the outcome of a hospital project and experiment only with demonstration projects to avoid the risk of wastage. In this regard, Harris et al.,2(017) advise that managers will only embark on projects with high yields and those thatassure future sustainability. Moreover, to attain effectiveness, hospitals must only allocate resources in priority areas. 

EvaluationResource Allocation for Best Results

Even if decision-makers consider governance and decision-making processes of a healthcare organization before making allocationsother vital aspects remain unattended. For exampleRansom and Olsson (2017) argue that for-profit healthcare decision-makers are obliged to return profits to investors, and they may face difficulties when allocating resources (328)In this regard, hospital resources intended to improve health may be cut to provide cost-effective care, increase efficiency, and also reduce operational costs (329)Besides, other hospital resources may be used without improving the health of patients. For instance, hospital may allocate some of its resources towards advertisement, which may not necessarily yield actual improvement in patients’ health.

Therefore, for best use, healthcare providers must maintain the highest levels of healthcare ethical standards alongside the effectiveness improvement measuresFor instance, even if clinicians must conserve hospital resources, patients and other stakeholders must consent to any disinvestments (Ransom & Olsson, 2017, p. 328-329)Besides, healthcare organizations must create mechanisms to review patient grievances and appeals and remove any barriers like misinformation (329).Importantly, organization managers ought to focus on the morality of resource allocation decisions and eliminate waste. 

​In summation, certain essential areas that influenceresource allocation based on a healthcare organization and healthcare organizational effectiveness are critical. A healthcare organization can either allocate resources based on its decision-making processes or its governance to obtain optimality. Besides, resource allocation improves organizational effectiveness in many ways. For example, the allocation identifies opportunities for reinvestment or disinvestment. Resource allocation also allows these organizations to prioritize key areas to improve healthcare. However, the governance and decision-making processes of facilities cannot sufficiently count for best results. Decision-makers must employ other aspects like observing hospital ethical standards and allowing for stakeholder participation in resource allocation decisions.


Asbu, E., Masri, M., & Naboulsi, M. (2020). Determinants of hospital efficiency: A literature review. International Journal of Healthcare6(2), 44.

Harris, C., Allen, K., Waller, C., & Brooke, V. (2017). Sustainability in health care by allocating resources effectively (SHARE) 3: examining how resource allocation decisions are made, implemented and evaluated in a local healthcare setting. BMC Health Services Research17(1). doi: 10.1186/s12913-017-2207-2

Harris, C., Green, S., & Elshaug, A. (2017). Sustainability in health care by allocating resources effectively (SHARE) 10: operationalizing disinvestment in a conceptual framework for resource allocation. BMC Health Services Research17(1). doi: 10.1186/s12913-017-2506-7

Ransom, H., & Olsson, J. (2017). Allocation of health care resources: Principles for decision-making. Pediatrics in Review38(7), 320-329. doi: 10.1542/pir.2016-0012

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