Ensuring long-term success in an already tight hospital industry demands more than simply meeting current operating expenses. To compete in the future, hospitals require enough profit to reinvest in ...capital equipment and buildings, whether directly or through the attainment of additional debt. With government and managed care reimbursement becoming increasingly fixed over the last few decades, a solid strategy for long-term success requires a thorough understanding of service costs. Specifically, hospital managers must understand costs at the procedure level to support the development of service-line strategies that facilitate continued and appropriate capital investment and future success. For this reason, many healthcare organizations have invested significantly in formal cost accounting systems. Clinical leader involvement is vital to the accurate costing of services.
Celotno besedilo
Dostopno za:
CMK, DOBA, IZUM, KILJ, NUK, OILJ, PILJ, PNG, SAZU, SIK, UILJ, UKNU, UL, UM, UPUK, VSZLJ
Medicare add-on payments Dowless, Robert M
Healthcare financial management
62, Številka:
9
Journal Article
Medicare add-on payments are often forgotten factors in hospital financial analyses. Because Medicare add-on amounts are paid as part of the diagnosis-related group amount, a hospital might ...mistakenly assume that such payments will continue into the future under all given scenarios. Medicare add-on components are interim payments. The actual add-on payment and settlement amounts are determined on the Medicare cost report. To ensure that Medicare add-on payments receive appropriate consideration when developing incremental analyses, a hospital's finance department should make a point to project Medicare add-on related revenue separately from Medicare base operating and capital-related revenue.
Most modern costing systems use the relative value unit (RVU) procedure costing method. By allocating costs based on individual procedure resource requirements, this method provides an obvious ...advantage in accuracy over a departmental level ratio of cost-to-charges approach. However, a sometimes overlooked and often underused attribute of the RVU method is its flexibility. Finance department staff responsible for the costing process should understand this flexibility in order to encourage and facilitate clinician involvement in the procedure costing process. The flexibility of the RVU method can also assist in developing costs for departments that charge services based on intensity level. However, it should be noted that the accuracy of estimated resource requirements and the relativity of those requirements across procedures depends on the experience and effort of the clinical manager.
Private payers and many industry analysts claim that hospital pricing strategy typically shifts health care costs from government payors to private payors. Economists believe, however, that hospitals ...would have maximized prices with previous market power, preventing any current opportunity to increase prices and shift costs. Economists have more recently claimed that a lack of competition is the reason for any cost shifting that may be occurring. Given issues such as hospital mission and governance, and the responses of hospitals to changing industry conditions, both parties may be correct in their cost-shifting assessment. Furthermore, understanding both viewpoints may be necessary to address adequately the cost-shifting issue and the future financing of health care.
Activity-based costing (ABC) is not widely used in the healthcare industry. Some healthcare provider organizations are considering ABC, however, because of its potential to improve resource ...management and thereby maximize efficiency. ABC supports better pricing practices through more accurate costing and can be used to identify underutilized resources as well as associated costs that can be reduced. ABC can be a useful tool for determining the cost of unused capacity and for making strategic management decisions that will reduce costs.
