Profitability of Freestanding vs. Hospital-Based Skilled Nursing Facilities
There are various reasons why freestanding skilled nursing facilities (SNFs) are more profitable than hospital-based skilled nursing facilities (HBSNF). First, freestanding SNFs are more profitable than HBSNFs because they admit less Medicare patients and more private pay patients (Liberty University, 2015). Second, studies have shown that the fixed costs of HBSNFs are often disproportionate to patient acuity and tend to be higher than the fixed costs of freestanding SNFs (Pizer, White, & White, 2002). Higher costs, however, have been associated in part to HBSNFs being better prepared to care for higher acuity patients by offering specialized staff and equipment (Pizer,
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CCR allows institutions to allocate costs for each individual patient. If a patient requires an x-ray and medications from the pharmacy, each of these units of service would carry distinct costs. If the medications cost the pharmacy’s $50 but the pharmacy charges the patient $100 dollars then CCR for the pharmacy is 0.5. CCRs that are less than 1.0 indicate a profit, whereas CCRs equal to 1.0 signify breaking even, and CCRs greater than 1.0 result in profit loss (Liberty University, 2015). Nurse leaders must understand that estimating the cost of healthcare services is difficult because of the various service lines involved in the delivery care. CCRs can therefore be somewhat misleading because an organization may believe they are making a substantial profit on a procedure but after taking a closer look they may realize that the cost of supplies might be wiping out a large portion of that profit (Herman, 2012). Nurse leaders can use CCR as method to gauge costs but not as a substitute to consulting with other services participating in the delivery of
With the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has initiated reimbursement based off of patient satisfaction scores (Murphy, 2014). In fact, “CMS plans to base 30% of hospitals ' scores under the value-based purchasing initiative on patient responses to the Hospital Consumer Assessment of Healthcare Providers and Systems survey, or HCAHPS, which measures patient satisfaction” (Daly, 2011, p. 30). Consequently, a hospital’s HCAHPS score could influence 1% of a Medicare’s hospital reimbursement, which could cost between $500,000 and $850,000, depending on the organization (Murphy, 2014).
The ability of a unit to survive is largely dependent upon the hospitals internal financial budgetary performance and the external needs within the community. Developing a financial budget is a process that should use teamwork to plan and implement in order to be effective. The budget sets perimeters for administrators to follow throughout the year, allowing the director to report variances while providing guidance to maintain a minimum variance and adjust when possible (Finkler & McHugh, 2008). By using all department managers in the planning process of the new budget, the nurse executive is able to develop effective strategies for all departments while investing in the goals. This eliminates many problems associated with budget and identifies areas that need improvement or expansion. Because of the competition, declining margins, and other economic pressures, nurse executives need to take steps to control costs and increase revenues for this unit. The overall goal of the financial performance within the organization is to meet the total budgetary needs of the unit to produce favorable outcomes. My focus will be to propose the expansion of a new Joint Replacement Unit (JRU) within the hospital, while identifying the major operating components of the budget for this organization. The importance of reviewing the budget for a newly developed unit is to allow the nurse executive and administrative team to manage the existing organizational programs within in the facility, plan for goal accomplishments for the new unit, while controlling costs.
The Centers for Medicare and Medicaid Services (CMS) have recently begun requiring hospitals to report to the public how they are doing on patient care. Brown, Donaldson and Storer Brown (2008) introduce and explain how facilities can use quartile dashboards to transform large amounts of data into easy to read and understandable tool to be used for reporting as well as to determine areas in need of improvement. By looking at a sample dashboard for an inpatient rehab unit a greater understanding of dashboards and their benefits can be seen. The sample dashboard includes four general areas, including nurse sensitive service line/unit specific indicators, general indicators, patient satisfaction survey indicators and NDNQI data. The overall performance was found to improve over time. There were areas with greater improvement such as length of stay, than others including RN care hours and pressure ulcers. The areas of pressure ulcers and falls did worse the final quarter and can be grouped under the general heading of patient centered nursing care. The area of patient satisfaction saw a steady improvement over the first three quarters only to report the worst numbers the final quarter. A facility then takes the data gathered and uses it to form nursing plan...
The patients should receive safe and appropriate care in return for payment equal to the level of care received (“What is Value-Based Care”, 2016). For providers, this means using affordable and proven treatments while also catering to the patient’s needs (“What is Value-Based Care”, 2016). Additionally, this model is built upon measurement which when relayed to the patient will inform them of the scope and cost of their care. Examples of measures that are tracked, provided by the article “What is Value-Based Care,” include: procedural complications, hospital-acquired infections, and readmissions; providers face penalties if these metrics are unacceptable (“What is Value-Based Care”,
The first business principle that is associated with patient and system cost is manage cash flow very closely (Fisher,
Nursing home care is expensive. Although prices vary, the basic charge for a double-bed room in a typical nursing home is in the range of $20,000 to $50,000 a year. Homes in rural areas tend to be slightly less expensive than those in cities. The costs of medications and physician visits are not included in the basic charge. Also, special treatments such as physical, occupational, and speech therapy often add to the cost. There are also possible additional charges for drugs, laundry, haircuts, and extra services. Some nursing homes are operated as nonprofit corporations. They are sponsored by religious, charitable, fraternal and other groups or ran by government agencies at the federal, state, or local levels. But many nursing homes are businesses operated for profit. Individuals or corporations may own them. Sometimes they are part of a chain of nursing homes.
However, a new study finds that increased staffing of RNs does not significantly decrease a hospital 's profit, even though it boosts the hospital 's operating costs. A 1-percent increase in RN full-time equivalents increased operating expenses by about 0.25 percent but resulted in no statistically significant effect on profit margins. In contrast, higher levels of non-nurse staffing caused higher operating expenses as well as lower profits. (2014, Healthcare 411) To improve patient satisfaction the staffing of nurses must be improved. When short staffed these patients are the ones suffering from the lack of care that should be provided. Patient care is the ultimate goal in nursing and when the units are short staffed patient care is affected tremendously, in a negative way. The Joint Commission on the Accreditation of Healthcare Organizations proposed bolstering the nursing educational infrastructure through team training in nursing education, enhancing support of nursing orientation, in-service and continuing education in hospitals, and creating nursing career ladders based on educational level and experience. (2014, Healthcare 411) The Joint Commission also supports adopting the characteristics of "magnet hospitals," such as setting staffing levels based on nurse competency and skill mix
The balance between quality patient care and medical necessity is a top priority and the main concern of many of the healthcare organizations today. Due to the rising cost of healthcare, there has been a change in the focus of reimbursement strategies that are affecting the delivery of patient care. This shift from a fee-for-service towards a value-based system creates a challenge that has shifted many providers’ focus more directly on their revenue. As a result, organizations are forced to take a hard look at the cost of services they are providing patients and then determining if the services and level of care are appropriate for the prescribed patient care.
This system provides annual statics on Medicare payment amounts for institutional providers. A nurse leader can use HCRIS to find other similar institutions with whom to compare reimbursement rates and use this information to make necessary adjustments (“Healthcare Cost Report”, 2016). Lastly, nurse leaders can also use cost-to-charge ratios, volume-based measures, per diem rates, and balanced scorecards to gain better insight of unit reimbursement (Liberty University,
In recent times, healthcare organization across the nation are facing unprecedented challenges as they strive to improve the overall quality of care provided to their patient’s population, while improving their organization’s financial performance. Furthermore, uncertainty of new reimbursement models, diminishing reimbursement, and complicated compliance regulations are playing the role of a catalyst for streamlining the Chargemaster process in majority of healthcare organizations.
For a nurse, trying to provide individualized care for a patient is extremely difficult to do, due to dealing with up to 20 patients a day. Assessing a patient’s needs and problems is first and foremost the most important thing for a nurse to do. Nurses are always caught between taking their time with a patient, and sorting out who needs care the most or whose condition is more severe. According to research done by the National Institute of Nursing found on nursingworld.org, patients who received 80% more of their care from RN’s had an 18.7% lower odds of readmission. Under the same circumstances, 1.9% had a shorter length of stay. Additionally, when there is a 10% increase in hiring of nurses, there is also a 10% decrease in the practice’s mortality rate. Some establishments are actually given higher pension compensations for quality of care based on statistics of their patient income and recovery time. This can be based on doctors and their performance, but there are some that are based solely on RN’s as well as the entire nursing staff and their performance with patients. In a private interview, registered nurse Whitney Sharp says “personally, as a charge nurse and a registered nurse, I make sure that the patient is comfortable, is receiving the right treatment and that the patient is monitored at all times. A patient can have a heart attack, loss of breath, or
The region’s labor market is already tightening, as a result of which competition for skilled healthcare professionals is increasing. Kaiser Permanente would have to compete with the existing hospitals in recruiting and retaining qualified management and staff personnel responsible for the day-to-day operations of each of its hospitals and physician practices, including nurses and other non-physician healthcare professionals. The scarcity of nurses and other medical support personnel in the region presents a significant operating issue. This shortage may require Kaiser Permanente to enhance wages and benefits to recruit and retain nurses and other medical support personnel, recruit personnel from foreign countries, and hire more expensive temporary personnel. Competition for skilled healthcare professionals may lead to a further increase in Kaiser Permanente’s wage
The cost of Medical equipment plays a significant role in the delivery of health care. The clinical engineering at Victoria Hospital is an important branch of the hospital team management that are working to strategies ways to improve quality of service and lower cost repairs of equipments. The team members from Biomedical and maintenance engineering’s roles are to ensure utilization of quality equipments such as endoscope and minimize length of repair time. All these issues are a major influence in the hospital’s project cost. For example, Victory hospital, which is located in Canada, is in the process of evaluating different options to decrease cost of its endoscope repair. This equipment is use in the endoscopy department for gastroenterological and surgical procedures. In 1993, 2,500 cases where approximately performed and extensive maintenance of the equipment where needed before and after each of those cases. Despite the appropriate care of the scope, repair requirement where still needed. The total cost of repair that year was $60,000 and the repair services where done by an original equipment manufacturers in Ontario.
There are several factors that contribute to the complexity of the revenue cycle. Frequent changes in contracts with payers, legislative mandates, and managed care are just a few examples of reasons why revenue cycle in the healthcare industry is so complex. Furthermore, the problems that arise in the steps of the revenue cycle further complicate the whole process. For example, going through the steps of the revenue cycle efficiently is extremely difficult when it is managed by poorly trained personnel. Furthermore, if a healthcare provider does not have the proper information system to track patient records and billing, receiving reimbursement can become difficult. In addition, one of the main factors that delay payments is denial from the insurance companies. The reason for Denial includes incorrect coding, the certain sequence of care and medical necessity or even delay in submitting claims. Lastly, inefficient patient correspondence can not only hinder the process of revenue cycle but also result in many patient complaints (Wolper, 2004).
The meaning of quality is “the right care for the right person at the right time”. Quality can be well-defined as the value, efficiency, consistency, and outcome of the care being provided. The Center for Medicare and Medicaid Service’s (CMS) stated “an rise in health care spending from $2.34 trillion in 2008 to $ 2.47 trillion in 2009, the largest one year increase since 1960” (Pickert, 2010). “The action to improve the American health care delivery system as a whole, in all of its quality dimensions such as efficiency, effectiveness, equitability, timeliness, patient-centeredness, and safety for all Americans” (IOM, 2011). This paper aims to find out the relationship between cost and quality relating to health care.