Cost-Shifting Self-Quiz Problem: Assume your organization has 100 patients analy
ID: 2820569 • Letter: C
Question
Cost-Shifting Self-Quiz Problem: Assume your organization has 100 patients analyzed in the following manner: 15 Medicare patients, who pay $2,000 per diagnosis 25 Medicaid patients, who pay $1,800 per diagnosis 20 managed care patients, who pay charges minus a 20% discount 10 managed care patients, who pay charges minus a 25% discount 10 private insurance patients, who pay charges 10 charity care patients, who pay nothing 10 bad debt patients, who pay nothing Your organization’s average cost per patient is $2,000.alculate the charge Using the practice problem on cost shifting, assume that those payers that pay charges, or charges minus a discount, limit XYZ’s charges to $1,050 per patient. Calculate the amount of costs that XYZ will need to cut, or cover with additional revenues, to break even (realize no profit or loss).ssary to recover your cost.
*Easy format please.
Explanation / Answer
Then,
we need to calculate the value of charges-
Total = 30000+45000+0.8C*20+0.75C*10+C*10 = $2,00,000
41C = $2,00,000
C = $3,048.78
If cost is required to be cut then charges stable to $1,050.
Here, C = $1,050
Total Collection = 75,000 + C*41
So,
Total Collection = 75,000 + 1,050 * 41
Total Collection = 1,91,100
Then,
Total cost = 2,00,000
Cost Saving or revenue required to Break even = $2,00,000 - $1,91,100
Cost Saving = $80,899 (approx)
Thanks
Reimbursement Nature People Costs Charges per paitient Collection Profit / (Loss) Medicaid 25 50000 1800 30000 0 Medicare 15 30000 2000 45000 -5000 MC#1 20 40000 C 0.8*20*C 0.8*20*C - 40000 MC#2 10 20000 C 0.75*10*C 0.75*10*C - 20000 Private 10 20000 C 10*C 10*C - 20000 Charity 10 20000 0 0 -20000 Bad Debts 10 20000 0 0 -20000 Total 100 200000 Here C stands Charge