Question

Define and use clear health care facility finance examples A to H each term have to write at least 150~ 200 words. -Important This is the essay question. Dont use exactly same as coursehero. APA format and dont do Plagiarism! 1. Define and use clear health care facility finance examples (You must include numbers as well as words) A. The difference between facility charges, payment and costs B. Payment to cost ratio C. Payer mix D. Global Managed Care E. Shifting Financial Risk F. The Forms of Shifted Financial Risk G. Benchmarks H. Operational Performance Indicators (mention at least 4)

Answer 1

1 The difference between facility charges, payment and costs

When it comes to hospital funding, "charges," "costs," and "payments" are three different words with three completely separate meanings. Sadly, these terms are also used interchangeably-and inaccurately. "In recent years, with a stronger emphasis on data transparency, some have been enormously confused that Medicare pays the" charges "they apply on a claim to hospitals, whenMedicare premiums and beneficiary copayments are, in practise, legally defined.

Most significantly, the variations in charges, costs and fees matter to the patients we represent every day. These various terms must be disentangled so that customers can better understand what their insurer pays, what they pay out of pocket, and why.

CHARGES are the original, individual list prices that must be established by a hospital for what can be tens of thousands of goods and services it offers. The internal list of all these expenses is known as a "chargemaster" for, among other items, treatments, pharmaceuticals and supplies. The historical chargemaster has little or no significance to current hospital patients and to the payments a hospital currently makes.

Although Medicare allows hospitals to request complete charges (i.e. chargemaster prices) when making claims for regulatory reporting purposes, the charges have no direct connexion to the pre-determined Medicare reimbursement that a hospital receives, nor to the out-of-pocket / copayment sum that a patient is required to contribute to treatment.

COSTS are the costs of delivering medical care borne by a hospital. This may include the direct costs of patient care such as nursing, room and board, medicines and supplies, as well as, and equally significant, indirect costs such as overhead for administrative costs, including compliance with federal and state regulatory requirements, control of infections, medical records, maintenance of buildings,

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PAYMENT is the sum that a hospital currently earns for patient care provision. The chief payment sources are: (e.g., Medicare and Medicaid) Government Private insurers and, to a much lesser degree,Patients

It must be reiterated that Reimbursement is the ONLY word in the field of hospital finance that accurately applies to what patients, insurers or governments pay to hospitals for treatment. The myopic fixation of the media on "charges" is unfortunate because it hides the reality about the division between charges and payments, especially the sum eventually required for insured and uninsured patients.

The Government's Fees. In fact, a fixed reimbursement rate for hospital services given to seniors and disabled Americans (Medicare beneficiaries) is set in advance by the Federal government. This includes the sum that the government expects recipients, also known as cost-sharing, to reimburse the hospital directly as their share of the overall bill.

Insurers' Fees. Via direct agreement with hospitals , private insurers set their payment rates. These agreements result in a mutually negotiated reimbursement rate for services, but are different from the process of deciding the amount that "out-of-pocket" would be paid by the insured individual or customer.

The Patient's Fees. The payments patients make directly to a hospital or other health care provider are customer payments from insured Americans, known as "out-of-pocket" payments, "copayments," or "cost sharing" (not to be confused with the "cost" of care described above).

2.Payment to cost ratio

The inverse relation between below-cost payer payment-to-cost ratios (Medicare, Medicaid, and uncompensated care) and the degree of cross-subsidization or cost transfer to above-cost payers (private payers). The disparities in payment-to-cost ratios between public and private payers exert "hydraulic" pressures on U.S. hospitals for cost shifting; this has been described in the literature as "hydraulic" pressures for cost shifting. Cost-shifting pressure resulting from underpayment by Medicare brings pressure on all payers to raise payments. Medicaid payments (including disproportionate-share hospital, or DSH, payments and other extra payments) nationwide leave 8 percent of hospital expenses for Medicaid hidden. It must be accounted for if this difference increases. The hydraulic cost-shift, as presented, is focused on the meanings of Medicare , Medicaid, and private payer costs by hospitals, as stated by the annual survey of the American Hospital Association (AHA). Such costs reflect the average efficiency of output and may or may not reflect the minimum cost thresholds needed to treat patients with different payers.

Payers consistently complain that their premiums are appropriate and that the expense of hospitals is out of line. They maintain that costs could be "inflated" with the assumption of higher revenue generation. Hospitals have been forced to reduce their costs over time by the Medicare patient prospective payment scheme (PPS) and private payers, and hospitals have responded.

3.Payer mix

Payer mix applies to the ratio of patients with government health coverage vs. commercial or "private" insurance, Medicare and Medicaid. Commercial insurance costs more for health care facilities than federal policies do, if you remember. Most hospitals depend on that distinction to keep the lights on.

Payer mix vs. operating margin

Operating margin is literally profits minus operating costs. To keep going, every organisation needs the former to surpass the latter. This is where the balance of payers is important. According to Christopher Kerns, executive director of The Advisory Board, a health care consulting organisation, for hospitals to support themselves, the operating margin needs to be at least 2.5 percent. Most hospitals are on the verge or far below that.

4. Global Managed Care

Compared to conventional insurance, managed care policies can have lower premiums and less financial risk, but participants still take greater responsibility for handling their own care. You do not have the limitless opportunities of a typical fee-for - service reimbursement plan. To provide necessary services and/or medications, the doctor will need to request pre-authorization from the managed care plan. Pre-authorization is advance approval for a member's medical treatment, test or surgical procedure to be carried out on an outpatient basis under a managed care plan. Your healthcare partner becomes the plan you pick. Be sure that they are dedicated to open, prompt, standard, affordable care. Dealing with a managed care contract will give me an extra layer of administrative responsibilitiesto medical care which must be carefully negotiated.

5.Risk Shifting

The transfer of danger to another group is danger shifting. There are many connotations of risk shifting, the most common being the tendency of a corporation or financial institution facing financial difficulty to take on undue risk. Typically, this high-risk activity is carried out with the intention of creating high rewards for equity owners— They face little extra downside risk, but can produce substantial additional return, and have the effect of transferring risk from shareholders to debt holders.

Risk shifting also happens when a corporation moves from providing a defined benefit package to providing a defined contribution plan to workers. The burden associated with pensions has moved from the company to its workers in this situation.

KEY TAKEAWAYS

· Risk shifting shifts risk or responsibility from one party to another.

· In the financial world, risk shifting is prevalent, where some parties are willing to take on the risk of a fee from others.

· Insurance moves the risk of a loss from the policyholder to the insurer, for instance.

6.Forms of Risk Shifting

Outsourcing :. Outsourcing requires moving the risks involved to another group in a project. ...

•Derivatives. A derivative is a financial asset which derives its value, such as stocks , bonds, and currencies, from the value of an underlying asset.

7.Benchmarks

A benchmark in computing is the act of running a computer programme, a series of programmes, or other operations in order to determine an object's relative performance, typically by running a number of standard tests and tests against it. The term benchmark is often widely used for the purposes of the benchmarking programmes themselves, which are elaborately constructed.

Benchmarking is commonly correlated with the measurement of computer hardware performance characteristics, such as a CPU's floating point operation performance, although there are situations where the technique is also applicable to software. For instance, software benchmarks are run against compilers or DBMS (database management systems).

Benchmarks provide a way to compare the performance of various subsystems across different architectures of the chip / system.

In order to arrive at predictable, useful conclusions, benchmarking is not simple and sometimes requires multiple iterative rounds. Benchmarking data analysis is often incredibly difficult. Here is a partial list of challenges that are common:

· Vendors tend to explicitly tailor their products to industry-standard benchmarks. Norton SysInfo (SI) is especially easy to tune into, since it is primarily skewed towards the speed of multiple operations. In interpreting such outcomes, use extreme caution.

· Many suppliers have been accused of "cheating" on benchmarks, doing things that offer far higher benchmark numbers, but making things worse on the actual likely workload.

Many benchmarks focus entirely on the speed of computational performance, neglecting other important features of a computer system

For benchmarks, there are seven important characteristics. These main properties are:

1. Relevance: Comparatively critical features should be calculated by benchmarks.

2. Representativeness: Business and academia should widely embrace benchmark performance indicators.

3. Equity: There should be a fair comparison of all systems.

4. Repeatability: It is possible to check benchmark outcomes.

6. Cost-effectiveness: Benchmark assays are cost-effective.

7. Scalability: Benchmark tests can operate from low to high across systems that have a variety of resources.

8. Transparency: It should be easy to grasp benchmark metrics.

8.Operational Performance Indicators

Key Performance Indicators ( KPIs) are the key (key) indicators of progress towards the anticipated outcome. KPIs have a strategic and organisational enhancement orientation, build a decision-making analytical foundation and help focus attention on what matters most.

· Providing reliable proof of success in achieving the desired outcome

· Measure what is supposed to be calculated to help inform decision-making.

· Provide a contrast that calculates the level of improvement in results over time.

· Performance, effectiveness, consistency, timeliness, governance, compliance, conduct, economy, project success, staff performance or resource usage can be tracked.