A hospital admits 1000 patients per month who stay an average of 4.3 days per admission. The hospital charges $10,000 per admission and incurs $7,100 in costs per patient. Assume all patients are reimbursed under the same reimbursement method,

A) complete the table and calculate net income for the hospital under each reimbursement method.

A. 80% of Charges:

B. Cost:

C. $1,700 per diem:

D. $6,900 per case:

E. $200 capitation (per member per month) and covered lives are 33,000.

Charge Cost Per Diem PerCase Capitation Composite (Part b)

Gross Revenue $ _______ _______ _______ _______ _______ __________

Less:

Contractual discounts _______ _______ _______ _______ _______ __________

Net Revenue _______ _______ _______ _______ _______ __________

Less: Expenses _______ _______ _______ _______ _______ __________

Net Income $ _______ _______ _______ _______ _______ __________

B. Calculate the expected net income for a hospital with the following patient mix:

80% of Charges: 200 admissions per month (20%)

Cost: 100 admissions per month (10%)

$1,800 per diem: 100 admissions per month (10%)

$6,800 per case: 500 admissions per month (50%)

$200 capitation and 32,000 covered lives: 100 admissions per month (10%)

C. Explain all the ways managers could increase net income for patients reimbursed under per diem and capitation reimbursement.