1. Use the financial model below to find alternative priorities for financial improvement.

2. Develop a project charter for a bundled payment financial improvement project.

3. Develop a strategy map to implement a healthcare home.

			Improvement
Baseline	Amount $	Cost/charge	Solver	Baseline		Notes:
Revenue
Pure Fee for Service	50	0.4	30%	20%		Improvement reduces cost per service
DRG	100	0.8	0%	10%		Improvement reduces cost per service
Bundled	10	0.9	0%	5%		Improvement reduces number of services
Shared Savings	20	0.9	5%	5%		Improvement reduces number of services and includes reduced DRGs and improved cost/service
Capitation	40	0.95	3%	3%		Improvement reduces number of services and includes reduced DRGs and improved cost/service
			0	0
Overhead	50		2%	1%
Model
Revenue
Pure Fee for Service	50.0		50.0			Scenarios:
DRG	100.0		100.0			Set FFS at max 30%
Bundled	10.0		10.0			Set FFS at max 20% then reduction moves to DRG
Shared Savings	20.0		20.0			Make Shared savings revenue 50M
Capitation	40.0		40.0
Total	220.0		220.0	207.3
Costs
Pure Fee for Service	20.0		14.0
DRG	80.0		56.0
Bundled	9.0		6.3
Shared Savings	18.0		12.6
Capitation	38.0		26.6
Overhead	50.0		49.0
Total	215.0		164.5	170.3
Net	5.0		55.5	39.2

Textbook is Healthcare Operations Management 3rd Edition

By Daniel B. McLaughlin and John R. Olson