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Benefit-Cost Ratio in Healthcare Services


When you think of going to the hospital or calling an ambulance, it is difficult to not think about the costs included with those services. All of the money spent does in fact go to good use in the hospital because the cost to run and maintain the machinery and equipment is very high. It can be so great that supplies are scarce therefore equipment does not get to the ambulances. An important life saving device is an AED, or an Automated External Defibrillator. These can be found around hallways of the campus and exerts a shock to someone who had a heart attack and no longer has a heartbeat. AED’s are fairly expensive and highly inelastic so they are difficult to obtain or replicate. Ã-rebro University in Sweden analyzed the costs and benefits of carrying the AED for EMS (Emergency Medical Service) use.

The most common cause of death is coronary heart disease in the world happening nowhere near a hospital bed (Sund). When someone goes into cardiac arrest, it is crucial the patient is resuscitated as soon as possible to increase the chance of survival. Defibrillation plays one of the most important parts during resuscitation and that is where the AED comes into account. Every minute that a person goes without a heartbeat, their chance of survival decreases dramatically. Their brain needs oxygen, the entire body needs blood, and without the heart flowing blood throughout the body, there is a higher chance of organ failure if they do survive. But before you go out and purchase thousands of AEDs, there are a few things that need to be looked over.

Not only do the hospitals have to account for the cost of a single AED, but they have to train the different employees on how to use it, the hospitalization afterwards, and the supplies used during the ten-year lifespan such as the sticky pads that go on the person to send the shock and replacement batteries. The total costs of the defibrillators in the county of Stockholm accumulated to just over 8 million euros, or 8.45 million dollars (Sund). Assume the average cost is 8 million dollars per county in North Carolina. There are 100 counties in North Carolina, totaling 800 million dollars for installation of defibrillators in our state alone. There is no doubt the AEDs would have a high cost, but the benefits overcome that hurdle by saving many people’s life.

For most 9-1-1 calls, the first responders are the police, fire department, and EMS with an ambulance for transport. By having the fire depot responding to medical calls, the chance of survival increases significantly. In the county of Stockholm, the average time for use of the AED decreased by one minute and the percentage of survival after one month increased by two percent (Sund). In just one county, those numbers represent how significant and useful an AED device can be. To put a monetary amount on the value of life, it would be 2.2 million euros to prevent premature death. This comes from a survey where people were asked how much they would be willing to pay to prevent death (Sund). In the end, the benefits of an AED device calculated to be 36 times higher than the costs, proving that a price cannot be put on a person’s life.

With a benefit-cost ratio of 36, meaning the benefit is 36 times more than the amount of the cost spent, it is easy to see that the people of Stockholm would be supportive of the program. The AEDs are a one in ten year purchase with an almost infinite use within the time frame. Once the AED devices are bought, that is the only cost, but every life saved is an additional benefit. It is easy to see that in one year, you can make the money back by three times as much. Currently, slightly over half of all EMS has an AED available. Maybe if the government read this article, they would understand the importance of it and how much it impacts survival during an emergency.

Reference (APA)

Sund, B., Svensson, L., Rosenqvist, M., & Hollenberg, J. (2011). Favourable cost-benefit in an early defibrillation programme using dual dispatch of ambulance and fire services in out-of-hospital cardiac arrest. The European Journal of Health Economics: HEPAC, 13(6), 811-8. doi:

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