Part VII: Cost Drivers and Costs vers and Cost Shifting in Healthcare 137 e 8.2: Slippery Hospital - Calculating a charge rate that supports cost shifting (cross- Kry concept: Cala abdication) ent ways and at vario rate, of course at which the gros and other adjustm and bad debts. puyer is charged itals serve a wide variety of patients and are reimbursed in a number of differ- ways and at various rates. The facility fee for providing a hospital bed for one is sometimes referred to as the daily charge rate or daily "bed rate. This does not include the actual cost of medical procedures, but it is the h the gross bill for a bed may be calculated before the application of contractual radiustments. The charge rate has to cover all paver types, as well as charity care bad debts. As a result, some "cost shifting" typically occurs, where one category or is charged more in order to cover costs for another category or payer. Slippery Hospital anticipates serving 100 patients who will pay in the following manner: Number of Patients Patient Description Medicare patients Medicaid patients Managed care patients Private insurance patients Charity care patients Bad debt patients Reimbursements per Patient $1,900 $1,700 90% of charges 100% of charges $0 25% of charges (75% loss) and Financial Management Healthcare Applications: A Casebook in Accounting and Financial Manager Assignment and Question of the hospital to provide a patient the $2,000 cost per day per 1. Assume that it actually costs $2,000 per day for the hospital to provide bed exclusive of any medical procedures. Given the $2,000 cost per da patient and the payer mix and payer rates provided, calculate the charge ra required for the hospital to cover its costs (break even). 2. What other factors may complicate the setting of charge rates? Hint: Solve this problem pia Fred