Chapter 4

Problem 1 Cost Shifting

Cost - $1,000 per patient Using the information in the table below 1. Calculate total loss (costs to shift) 2. Compute the new charge 3. Verify that new charge covers the cost

Chapter 4 Problem 1 Cost Shifting Cost - $1,000 per patient Using the information in the table below 1. Calculate total loss (costs to shift) 2. Compute the new charge 3. Verify that new charge covers the cost Problem 2 Cost Cutting Costs - $1,000 per patient Using the information in the table below 1. Calculate the loss (amount to cut) 2. Compute the new cost 3. Verify that cost cut will allow facility to break even ABC Healthcare will serve 100 patients broken down as follows. The actual cost of providing service is $1,000 per patient # Patients/Payer Amount will pay 30 Medicare $900 per diagnosis 20 Medicaid $850 per diagnosis 20 MC #1 Pays charges less 10% discount 15 MC #2 Pays charges less 20% discount 5 Private Pay Pay 100% of charges 5 Charity Pay nothing 5 Bad Debts Pay nothing