...semi-fixed costs and variable costs has to do with the amount of services provided. Variable costs are cost that are expected to increase and decreases with volume (patient’s days, number of visits, etc...). Fixed costs are costs expected to remain constant regardless of volume. Semi-fixed costs are those that are fixed with in ranges that are less than the relevant range. 2. Total Costs are made up of what components? Total costs are made up of two components fixed costs + variable costs 8. What are the Critical Differences in profit analysis when conducted in a capitated environment versus a fee-for-service environment? In the fee-for service graph the total revenues line is sloping upwards. However, in a capitated environment, the total revenues line is horizontal, which shows that total revenue is the same number regardless of volume as measured by the number of visits. Under capitation, revenue is being driven by the insurance contract (I.e., by the premium payment and the number of covered lives, or enrollees). This change in the revenue source is the core of the logic switch from fee-for-service to capitation; the clinic is being rewarded to manage the healthcare of the population served rather than merely to provide services. 10. a. What cost structure is best when a provider is primarily capitated? Explain The cost structure that is best when a provider is primarily capitated is fixed costs. This assumes a fixed number of lives covered. The...
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...technique that is used to analyze the effects of changes in volume on revenue, costs and profit. It is also known as (CVP). b. (CVP) is useful in health service managers because it helps keep a close watch on changes in the amount of revenues, costs and profits that goes on in the business in order to stay successful and competitive. 5.4) a. Contribution margin is the difference between unit price and the variable cost rate or per – unit revenue minus per –unit variable cost. b. The economic meaning of contribution margin is the profit that is left after fixed costs is covered. 5.5) a. The break even equation is total revenues – total variable costs – fixed costs = profit. b. The role that contribution margin play in the volume of the break even equation is the pre unit dollar amount available to first cover an business fixed costs and then to contribute to profits. 5.6) a. Operating leverage is the reflects the extent to which business costs are fixed. b. Operation leverage are measured by the degree of leverage (DOL). This impact the utilization on profits. 5.7) When a provide moves from fee for service to discounted fee for service environment the element of capitated environment dramatically differs. 5.8 Capitated environment versus fee for service environment have a major different in profit analysis. Capitated provider takes on the insurance...
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...costs are not related to the volume of services delivered. Semi-fixed costs are fixed at two or values within relevant ranges. 5.2 Total fixed costs and total variable costs. 5.3 a) The cost-volume profit analysis is applied to organization’s costs and revenue structure that analyzes the effect of volume changes on cost and profits.b) It’s useful because they evaluate causes of action regarding pricing and introduction of new services. 5.4 a) The differences between per-unit cost (variable cost rate) and hence the amount that each unit of outpit contributes to cover fixed costs and ultimately flows to profit.b) They contribute to cover fixed costs and ultimately flows to profit. 5.5a)Total Revenue-Total Variable Costs-Fixed Costs=Profit. b) The volume breakdown partially has the volume cost rate of the contribution margin. 5.6a) If high proportion of a business total costs are fixed. b) It’s measured by the degree of operating level. 5.7 When a provider moves from a fee-for-service to a discounted fee-for-service environment the element of capitated environment dramatically differs. 5.8 A capitated environment vs. a fee-for-service environment have critical differences in profit analysis. Mainly a capitated provider takes on the insurance function. 5.9 By the number of lives being treated rather than the number of treatments being given to one life. Instead of trying to see more patients to increase revenue a capitated environment would push the provider to see less patients...
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...understanding of its unit-of-service costs, which had been rising at a rate of 10% per year. In fact it had recently been rated the third-highest cost hospital in the state of Massachusetts. Being a high cost provider could make the Network uncompetitive for Medicaid and other public contracts. Secondly, the Network’s new operating budget required a $14 million reduction, which represented 15% of the total hospital network’s operating budget, in expenditures during the next two fiscal years. This was largely due to the downward pressure on hospital revenues by the government reform and managed care forced providers to cope with conditions that were constantly changing, while continuing to provide quality health care services in a time of intense competition. The Network's traditional method of analysing costs is the Medicare step-down costing system. It gave little information about the cost at the unit of service level. It gave only aggregate costing information (i.e. information about the departmental or global costs) but it does not provide the costs at the patient or procedure level that is needed in order to push cost reduction and also price their services competitively. Moreover, there was some concern that it might be inaccurately representing the true cost of the intern and resident program, the interpretive services department, and the use of nurse practitioners. Those costs were not directly traceable to the service cost centers but that were traceable...
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...Principles of Healthcare Reimbursement Anne B. Casto, RHIA, CCS Elizabeth Layman, PhD, RHIA, CCS, FAHIMA Copyright ©2006 by the American Health Information Management Association. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, photocopying, recording, or otherwise, without the prior written permission of the publisher. ISBN 1-58426-070-X AHIMA Product No. AB202006 Ken Zielske, Director of Publications Susan Hull, MPH, RHIA, CCS, CCS-P, Technical Reviewer Marcia Loellbach, MS, Project Editor Elizabeth Lund, Assistant Editor Melissa Ulbricht, Editorial/Production Coordinator All information contained within this book, including Web sites and regulatory information, was current and valid as of the date of publication. However, Web page addresses and the information on them may change or disappear at any time and for any number of reasons. The user is encouraged to perform his or her own general Web searches to locate any site addresses listed here that are no longer valid. AHIMA strives to recognize the value of people from every racial and ethnic background as well as all genders, age groups, and sexual orientations by building its membership and leadership resources to reflect the rich diversity of the American population. AHIMA encourages the celebration and promotion of human diversity through education, mentoring, recognition, leadership, and other programs. American...
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...Acacia 4 Relationship Between Leadership and Organizational Culture at Acacia 5 SWOT Analysis of Acacia 7 Organizational Strengths of Acacia 7 Organizational Weaknesses of Acacia 8 Organizational Opportunities of Acacia 8 Organizational Threats of Acacia 9 Leadership Evaluation at Acacia 10 Leadership Strengths at Acacia 10 Leadership Weaknesses at Acacia 11 Recommendations for Leadership Development at Acacia 12 References 14 Acacia Overview Since 1969, the Latino based agencies, Acacia Network Housing, a non-for-profit organization, provides services in the area of health, economic development and housing. According to the welcome message of the CEO Raul Russi, the company is exceptionally proud of the staff. Being myself part of the team, I can say that each employee completes their duties every day with consideration of the following values: Excellence, Commitment, Leadership and Customer Service. Looking closely at the big picture, I will analyze the head of my department, Ms. Jenny Morales, Head of the billing department at Acacia Network Housing. Ms. Morales being the one I am reporting to in daily basis will be the adequate individual to analyze and learn from. Acacia Description Acacia Network’s mission is to partner with communities, lead change, and promote healthy and prosperous individuals and families (Russi, 1969). According to Acacia official website, the company has a sound fiscal base supported by our diverse funding portfolio comprised...
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...better understanding of its unit-of-service costs, which had been rising at a rate of 10% per year. In fact it had recently been rated the third-highest cost hospital in the state of Massachusetts. Being a high cost provider could make the Network uncompetitive for Medicaid and other public contracts. Secondly, the Network’s new operating budget required a $14 million reduction, which represented 15% of the total hospital network’s operating budget, in expenditures during the next two fiscal years. This was largely due to the downward pressure on hospital revenues by the government reform and managed care forced providers to cope with conditions that were constantly changing, while continuing to provide quality health care services in a time of intense competition. The Network's traditional method of analysing costs is the Medicare step-down costing system. It gave little information about the cost at the unit of service level. It gave only aggregate costing information (i.e. information about the departmental or global costs) but it does not provide the costs at the patient or procedure level that is needed in order to push cost reduction and also price their services competitively. Moreover, there was some concern that it might be inaccurately representing the true cost of the intern and resident program, the interpretive services department, and the use of nurse practitioners. Those costs were not directly traceable to the service cost centers but that were traceable...
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...healthcare inflation or uneven delivery of care (Ferman, 2010). The goal of the bill is to change a volume based model in to a value based business model. A comment by Moody’s Investor services exclaimed that the reform will undoubtedly require healthcare leaders to focus even more on multi-year strategies to ensure long term financial stability (Kim, Majka, & Sussman, 2011). Leaders will have to establish a long range plan that includes financial projections and goals, long range capital expenditure requirements, debt capacity, capital position analysis, capital shortfall analysis and sensitivity and risk analysis (Kim, Majka, & Sussman, 2011). There will be substantial increases in the number of newly insured that will place a tremendous amount of stress and unknown consequences on an already burdened healthcare infrastructure (Tyson, 2010). The objective of this paper will attempt to examine the implications of reform on strategic planning of health care institutions transitioning from a volume based model to a value based one. The recent passage of Health Care Legislation attempts to address payment and delivery systems currently in place that favor volume driven as opposed to value driven health care (Robert Wood Johnson Foundation, 2009). The current system of fee for service pays a set amount for...
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...nursing facilities, assisted living, other residential care, and home care services. This represents an expected increase from 15 million in 2000 to 27 million in 2040. This will affect more than just the different facilities; it affects the number of medical professionals needed to staff the facilities. The need for registered nurses, licensed practitioner’s, nurse aides, home health, personal care workers, and physicians will also increase from 1.9 million in 2000 to about 45 percent in the year 2040. We will see another rise in growth for direct care workers in long-term care by 2030 when the baby boomers reach the age of 85. The expected growth equates to about an additional 3.8 to 4.6 million. One of the problems the country will face is that the increased need of workers will not increase at the same rate as they are needed. Currently unpaid informal caregivers, such as, family members, neighbors; and friends provide the majority of care. This is expected to increase from about 20 million in 2000 to 37 million by the year 2030. This is an estimated increase of about 85 percent. Another challenge that will occur is to keep the current long-term workers and add new ones to the industry prior to the need. A challenge with this is that the majority of current long-term workers are women between the ages of 25 and 54. This group will increase to about 9 percent by 2030. The work environment will become highly competitive. The supply is low...
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... HSC 235/HEALTH CARE DELIVERY IN THE U.S DR. ROBERT HOLLINGSWORTH, DHSC.PA-C HEALTH CARE MUSEUM The following paper is a proposal for the new Health Care Hall of Fame Museum. The Museum will be composed of five exhibits, which are Medicare, Modern Health Insurance, Hospice, Long term care and the Public Health service. The first part of this proposal for the museum will discuss the history and impact of these health care developments on the health care system. The second part will be an overview of how these five exhibits relate to each other in the health care system. Medicare Exhibit 1 As part of the Social Security Act the Medicare Program was signed into law on July 30, 1965 by President Johnson. This program came into place because Americans over 65 could not get insurance. Created in the 1960 it was based on the private insurance system that was in use at the time. Administered by the Centers for Medicare and Medicaid Services (CMS) Medicare is purely a government program Austin and Wetle (2012). Over the years there have been many changes to Medicare to keep it relevant with the changing times for example, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. People can become qualified to receive Medicare by three different ways, be over the age of 65 and eligible for Social Security benefits, be permanently disabled, or have...
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...comprehensive primary care as well as education, translation and trasnportation(42 U.S.C. 254B (b) (1). Community Health Centers treat every patient within the community service area even if they don't have the ability to pay . They are also mandated to have a governing board of directors which is made up mainly from active patients and others in the community. Federally Qualified Health Centers are funded in many different ways. The first way is through federal grants under the Health Center Program and Public Health Service Act. They can also be funded from local and state funds . They do receive prefenetial Medicare and Mediciad reimbursement but the fee schedule is a sliding scale based on income. Community Health Centers are the safety net provider for a multitude of people and is the largest network of safety net primary care providers. Community Health Centers have also benefitted from the American Recovery and Reinvestment Act of 2009 which gave $2billion to CHC's over two years which resulted in serving 2.1 million new patients. Following the passing of the Afforrdable Care Act, more focus was shifted to primary and preventative care. The goals of imporving access and quality to care will be focused through community health centers to create a more effficient system. By creating more access to primary care services, health care costs will decrese because by serving more new patients we ccan help them avoid the emergnecy room and instead go to their primary care provider. The...
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...the World Health Organization (WHO), a well-functioning health care system requires a robust financing mechanism; a well-trained and adequately-paid workforce; reliable information on which to base decisions and policies; and well maintained facilities and logistics to deliver quality medicines and technologies. The delivery of modern health care depends on groups of trained professionals and paraprofessionals coming together as interdisciplinary teams.[5][6]This includes professionals in medicine, nursing, dentistry and allied health, plus many others such as public health practitioners, community health workers and assistive personnel, who systematically provide personal and population-based preventive, curative and rehabilitative care services. While...
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...Course Project Anise Hutcherson Approaches to Disease Management in Managed Care DeVry University `12/11/15 Table of Contents 1. Introduction…………………………………………………………….. Page 3 2. Background…………………………………………………………….. Page 4 3. The Challenges and Problems Associated with Disease Management…….. Page 6 4. Review of the Research and Literature…………………………………… Page 8 5. Challenges/Problems Analysis with Disease Management……………….... Page 9 6. Recommend Solutions of Improvements in Disease Management…………..Page 10 7. Implementation of Solutions in Disease Management in Managed Care Industry..Page 11 8. Justification………………………………………………………………… Page 12 9. Summary and Conclusion…………………………………………………...Page 14 10. Works Cited-References………………………………………………….. Page 16 Introduction It is very well known how most physicians or healthcare facilities and organizations handle diseases in our society in my opinion. Managed care for diseases are mostly not focused on, it is for large populations. But typically physicians do try to focus on individuals however once you throw MCO in the mix it becomes similar to a farmer caring for cattle which I hate to say. And I am very much passionate about this subject because of my experience in the very arena. Before I had a stable job with wonderful health insurance, I relied on government paid insurance for a minute and during that time I was diagnosed with Lupus which is a autoimmune disease with no cure. However...
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...information about the patient’s goals, preferences, and clinical status. It includes logistical arrangements, education of the patient and family, and coordination among the health professionals involved in the transition. Transitional care, which encompasses both the sending and the receiving aspects of the transfer, is essential for persons with complex care needs.1 Contents 1 Introduction 1 Historical Problems 2 Attempted Solutions 3 AmerisourceBergen Solution 3 Benefits 5 Outcomes 5 Summary Historical Problems with Transitional Care Despite considerable attention focused on improving 30-day readmission rates to hospitals, only modest change has been achieved according to the Centers for Medicare & Medicaid Services (CMS). Medicare Readmission Penalties Max Penalty 278 Hospitals 8.3% No Penalty fiscal year 2013 and rising to 3 percent in 2015—penalties that could reach into the millions of dollars for some hospi- tals. Patient outcomes from July 2008 to June 2011 dictated the penalties leveraged in 2013. Health experts say high re- admission rates for pneumonia, as well as other conditions, are mainly driven by lapses in post-discharge planning and...
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...for health Copyright © 2014 The McGraw-Hill Companies plan benefits. 1.3 Identify the key steps in the medical billing cycle. 1.4 Discuss the impact of electronic health records on clinical and billing workflow. 1.5 Evaluate the importance of professional certification and of medical liability insurance for career advancement. S te p4 Medical Billing Cycle Prepare and transmit claims 1 accounts payable (AP) accounts receivable (AR) benefits cash flow certification coding coinsurance copayment covered services deductible diagnosis documentation electronic claim (e-claim) electronic health record (EHR) fee-for-service health care claim health information technology (HIT) health plan indemnity plan managed care managed care organization (MCO) medical assistant medical billing cycle medical documentation and billing cycle medical insurance medically necessary noncovered (excluded) services out-of-pocket PM/EHR policyholder practice management program (PMP) preauthorization...
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