Using Activity-Based Management in a Medical Practice:

Fannon and Martens Cardiac and Thoracic Surgery Medical Group:

Part II - Using Cost Data for Process Improvement and Business Decision Making

Use Table 6 to compare FMMG's per unit cost of the four cost objects to the averages shown. Discuss. Do your answers here seem consistent to your answers to (1)? If so, explain why they should be consistent. If not, explain what is causing the inconsistencies. 6. Given your answer to (5), which process costs seem the most out of line (too high) for FMMG? Explain. Use the information in Table 7 to look at the process costs per unit

IV. Case Assignments Compare FMMG's Process Costs to the averages of all private thoracic practices, and to the other three practices in the benchmarking group. Which business processes are significantly higher or lower than the other practices? What business conclusions can be drawn from this data? What are the implications for process improvement and cost reduction? 9 2. Use Table 2 to com pare the Maintain Medical Records process costs across the five benchmarks. Suppose you are told that Practice #1 outsources its Maintain Medical Records process. What are the implications for FMMG? What would you recommend? Are you sure? 9 3. Four processes are activated for thoracic practices to be paid for their services: Obtain Insurance Authorization, Billing, Collect Payments and Resolve Collection Disputes. How does FMMG compare to other practices? What should FMMG do? Practice #1 does not use physician's assistants (PAs) to assist its doctors in the operating room because Medicare does not reimburse for this expense. The rationale is that hospital- employed PAs can assist in the operating room. FMMG, however, does use PAs in the operating room. Should FMMG continue to use its PAs in the operating room? Use Table 6 to compare FMMG's per unit cost of the four cost objects to the averages shown. Discuss. Do your answers here seem consistent to your answers to (1)? If so explain why they should be consistent. If not, explain what is causing the inconsistencies Given your answer to (5 FMMG? Explain. Use the information in Table 7 to look at the process costs per unit. 4. 0 5. 6. ), which process costs seem the most out of line (too high) for