Which model is commonly used to assess life cycle costs of a healthcare facility?

The Total Cost of Ownership (TCO) Model is widely used to assess life cycle costs of a healthcare facility because it offers a comprehensive analysis of all costs associated with an asset over its entire life span. TCO goes beyond the initial acquisition cost, incorporating operational, maintenance, and eventual disposal costs, which are critical in the healthcare sector where facilities have long operational lives and can incur significant ongoing expenses.

By evaluating all these factors, the TCO Model provides healthcare organizations with a more accurate representation of long-term financial commitments, enabling them to make informed decisions regarding investments in facilities, equipment, and systems. This is particularly important in healthcare settings where budget constraints and the need for efficiency can significantly impact operational effectiveness and patient care outcomes.

Other models, like Cost-Benefit Analysis and Value Engineering, focus on specific aspects of costs and benefits or optimizing value rather than providing a holistic view of total life cycle costs. Life Cycle Assessment, while useful for understanding environmental impacts, does not specifically address financial considerations in the same comprehensive manner as TCO.