Which term is used to describe costs incurred for additional patient services?

The term that describes costs incurred for additional patient services is marginal cost. Marginal cost refers to the additional cost that arises when producing one more unit of a good or service. In the context of healthcare, this means the cost associated with providing care to an additional patient or offering additional services to existing patients.

Understanding marginal cost is crucial in healthcare finance as it helps healthcare providers and administrators make informed decisions regarding resource allocation, budgeting, and pricing strategies. For example, if a hospital considers adding another operating room or extending service hours, the marginal costs associated with these decisions, such as staff wages, utilities, and equipment depreciation, must be assessed to determine the financial viability of the service expansion.

In contrast, fixed costs are those that do not change with the level of services provided, such as salaries for permanent staff and building rent. Variable costs fluctuate with the volume of patients, like supplies and hourly salaries. Opportunity cost represents the value of the next best alternative that is forgone when a decision is made, which while relevant in decision-making, is not directly tied to the costs of additional services. Thus, marginal cost is the most precise term for the costs incurred for additional patient services.