Business and Finance homework help: Hospital Costs to Implement
Refer to the Scenario for a Midwest Community Hospital, located in Appendix 26-A
Part 1 of the assignment: Within this scenario the productivity loss for the six-month learning period is calculated to be $1,233. Beginning with month #1 at $353 ($1.41 times 250 equals $353), compute the cost of productivity loss for the remaining five months as explained in the scenario, to total an overall amount of $1,233. Be prepared to show and explain your computations.
Part 2 of the assignment: Later in the scenario CMS states that the hospital’s total cost amounts to $303,990. Study the explanation and summarize the totals of each type of cost discussed. When you are finished your total should amount to $303,990. Be prepared to show and explain how you arrived at this total.
To further illustrate the computation of hospital ICD-10 conversion costs, CMS staff developed a scenario for a typical community hospital in the Midwest. The material presented in the appendix was published in the proposed rule as an example of costs that might be incurred by a hospital. The data were drawn from the American Hospital Directory, available at www.AHD.com . While based on an actual hospital in a midwestern state, the data have been altered to make calculations simpler.
· 1. The hospital has 100 beds, 4,000 discharges annually, and gross revenues of $200 million. Using the factors presented in the impact analysis, we estimated training costs (including the cost of the actual training as well as lost time away from the job), productivity loss for the first six months resulting from becoming familiar with the diagnostic and procedure codes, and the cost of system changes.
· 2. For our scenario, we assumed that the hospital employs three full-time coders who will require eight hours of training at $500 per coder for $1,500 ($500 times 3). While they are in training, the hospital will have to substitute other staff, either by hiring temporary coders if possible, or by shifting staff. The estimated cost at $50 per hour is $1,200 (8 hours times 3 staff times $50 per hour).
· 3. In estimating the productivity loss, we are only looking at the initial six months after implementation. Therefore, we divided the annual number of discharges of 4,000 by 2 to equal 2,000. We assume that three-quarters of the discharges are surgical, giving us 1,500 discharges requiring use of PCS codes. Dividing this by six months yields an average monthly discharge rate of 250.
· 4. We performed a similar calculation for outpatient claims. Of the 13,000 outpatient claims, the monthly average is 1,083 (we do not distinguish between medical and surgical outpatient claims).
· 5. Applying the 1.7 extra minutes per discharge, we estimated it would take an extra 425 minutes (1.7 times 250) to code the discharges in the first month. At $50 per hour, the cost per minute is $0.83 ($50 divided by 60 minutes) and the cost per claim is $1.41 ($0.83 times 1.7). For the first month, the productivity loss for inpatient coding is $353 ($1.41 times 250). Assuming for simplicity’s sake that the resumption of productivity over the six-month period would increase in a straight line, we divide the $353 by six to come up with $59. We reduce the productivity loss by this amount each month through the sixth month. The total loss for the six-month period is $1,233.
· 6. We apply the same method to determine the outpatient productivity loss. Based on our assumption that outpatient claims will require one-hundredth of the time for hospital inpatient claims, when applying the 0.17 extra minutes per claim, we estimate it would take an extra 18.41 minutes (0.017 times 1,083) to code the discharges in the first month. At $50 per hour, the cost per minute is $0.83 ($50 divided by 60 minutes) and the cost per claim is $0.14 ($0.83 times 0.017). For the first month, the productivity loss for outpatient coding is $15.28 ($0.014 times 1,083). Assuming for simplicity sake that the resumption of productivity over the six-month period would increase in a straight line, we divide the $15.28 by six, coming up with $2.55. We reduce the productivity loss by this amount each month through the sixth month. Thus the total loss for the first six months will equal $53.
· 7. In estimating the cost of system changes and software upgrades, we deliberately chose a value that we think overstates the cost. We assumed that the hospital will have to spend $300,000 on its data infrastructure to accommodate the new codes. Summing the training costs, productivity losses, and system upgrades, we estimate the total cost to the hospital will equal approximately $303,990. Finally, in order to determine the percentage of the hospital’s revenue that would be diverted to funding the conversion to the ICD-10, we compared the estimated cost associated with the conversion to ICD-10 to the total hospital revenue of $200 million. The costs amount to 0.15% of the hospital’s annual revenues.
· 8. We note that although the impact in our scenario of 0.15% is significantly larger than the estimated impact of 0.03% for inpatient facilities (set out in the rule), it is still significantly below the threshold the Department considers a significant economic impact. We are of the opinion that, for most providers and suppliers, payers, and computer firms involved in facilitating the transition, the costs will be relatively small.
Why Choose Us
Top Quality and Well-Researched Papers
Keeping in mind your instructions and guidelines, our writers ensure to do extensive research before beginning to write. Unique and quality paper is our top priority.
Professional and Experienced Academic Writers
Our team of writers and editors have many years of experience in academic writing. They are native English speakers and able to handle any academic task with ease.
Free Unlimited Revisions
We offer free unlimited revision to our clients. Whenever you feel the need to revise your work submit to our able editors. Our editors will ensure that your paper will be revised to meet your guidelines.
Prompt Delivery and 100% Money-Back-Guarantee
As a team we work hard to ensure a timely delivery of your papers. All you need to do is specify the time frame that you want you paper be submitted. We will work round the clock to beat the deadline.
Original & Confidential
We value your confidentiality and all our payment method are secure. We also use high end writing tools to ensure that all papers delivered are unique.
Customer Support 24/7
Our customer support team are available 24/7 to accept your orders and queries. We are committed to provide you with the best customer experience.
What Our Paper Writing Service Guarantees
You do not have to worry on what to expect because at mypaperwriterspro.com we guarantee you;
Our team of writers and editors is composed of people with diverse writing experiences. All of them have a Ph.D. They are all Ph.D. or M.A. graduates with extensive experience in academic and essay writing. We offer high-quality, original academic writing at an affordable cost.
Every order is written from scratch. We ensure that your papers conform to English conventions and the requirements of your discipline. To ensure originality, we also perform originality checks on all academic papers. Our success rate is 99% and many of our clients achieves their desired grades.
Mypaperwriterspro has a strict anti-plagiarism policy. To ensure that your paper is not flagged as plagiarism, we take extra precautions when writing it. Professional plagiarism detection software is used by our custom paper experts.
Mypaperwriterspro takes the privacy of clients' information very seriously. Mypaperwriterspro does not disclose any information about our transactions with third-party services. Nobody will ever know that you have hired our paper writing service to help with your paper.
Our website offers online security for our customers. Your passwords and personal information are protected and cannot be accessed by anyone else. Our customers are assured that their accounts will not be compromised by hackers. Learn more about the data that we store and how it is used in our privacy statement.
When you order our paper service, you get unlimited free revisions and unlimited drafts. We will ensure that you submit flawless papers. Our paper help website allows you to request multiple revisions.
If the order form indicates that modifications or adjustments are required, only those should be made. These guidelines include, but are not limited to:
You can reach us by email, phone, and live chat. We are always interested in hearing from our customers. We welcome any feedback regarding our paper assistance service. Our customer service representatives are available 24/7, even on holidays and weekends. They can help you place orders, check the status of your order, answer questions, or simply provide information.
Chat with your paper specialist via our live chat. Our professionals are available for unlimited chats. All your questions will be answered within minutes
Do you still feel dissatisfied with your final paper? Don't worry. Mypaperwriterspro is committed to customer satisfaction.
Although it is rare, you can request a partial or full refund if your final paper is not written to your satisfaction. Mypaperwriterspro views our money-back guarantee more as a right than a benefit.
We believe that our clients deserve the best paper services available online. We offer a simple and straightforward refund process if you are not satisfied with the paper.