Write a response to each discussion question.
Pick 3.1
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In a hospital setting it is common to group expenses by diagnosis and procedure for planning and control (Baker & Baker, 2014). This is how my organization does it as well. This is beneficial since it matches cost against common classifications of revenue (Baker & Baker, 2014). In my organization the revenue is listed by procedure or diagnosis, making it easy to search and reference certain outcomes. We can also see patterns develop. We can easily search how many of a certain exam we performed or what was performed per diagnosis for example. I think this works well since we are mainly an outpatient facility, but do have some animals stay over night.
References
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DIC 3.1
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The author states that it is common to group expenses by diagnoses and procedures for purposes of planning and control, as grouping is beneficial because is matches costs against common classifications of revenue. I am not sure how this is done at the non-profit alcohol and substance treatment center where I work, but to quote Baker and Baker “much of the revenue in many healthcare organizations is designated by their diagnosis (DRG’s) or procedures.” Grouping by location is also used as it allows room for competition as it relates to pricing. Except grouping by location would be limited given a patient’s diseases will be unaccounted for along with variances among the population. Having said that, I think grouping expenses by both diagnosis, procedures and care centers would be ideal considering DRG’s controls cost, promotes efficiency and enhances transparency.
Taylor 3.1
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Research by Baker and Baker (2014) supports that it is common to group expenses by diagnoses and procedures for purposes of planning and control. I do believe that grouping by diagnoses and procedure are beneficial because it matches costs and common classifications of revenues. However, grouping by care setting recognizes different areas that services are delivered. It was also researched that payments based on DRGs have gradually become the principal means of reimbursing hospitals for acute inpatient care in most high-income countries.5 The most frequent reasons for introducing DRG-based payments are to increase efficiency and contain costs.5 Street et al. have reviewed the little evidence that is available on the impact of different DRG-based payment systems in high-income countries in Europe.6 Their findings suggest that DRGs generally help to increase hospital efficiency by reducing the average length of stay but that they also increase case volumes.
Tomlinson 3.1
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Grouping expenses by diagnosis and procedure codes is common practice and is a good measurement to use for control and planning. I'm more familiar with the outpatient side of the equation, so Current Procedural Terminology (CPT) codes. Finance sends leadership daily reports that show by CPT code, what each physician is bi.
EPANDING THE CONTENT OF AN OUTLINE using notes.pptx
Write a response to each discussion question. Pick 3.1Top of F.docx
1. Write a response to each discussion question.
Pick 3.1
Top of Form
In a hospital setting it is common to group expenses by
diagnosis and procedure for planning and control (Baker &
Baker, 2014). This is how my organization does it as well. This
is beneficial since it matches cost against common
classifications of revenue (Baker & Baker, 2014). In my
organization the revenue is listed by procedure or diagnosis,
making it easy to search and reference certain outcomes. We
can also see patterns develop. We can easily search how many
of a certain exam we performed or what was performed per
diagnosis for example. I think this works well since we are
mainly an outpatient facility, but do have some animals stay
over night.
References
Bottom of Form
DIC 3.1
Top of Form
The author states that it is common to group expenses by
diagnoses and procedures for purposes of planning and control,
as grouping is beneficial because is matches costs against
common classifications of revenue. I am not sure how this is
done at the non-profit alcohol and substance treatment center
where I work, but to quote Baker and Baker “much of the
revenue in many healthcare organizations is designated by their
diagnosis (DRG’s) or procedures.” Grouping by location is also
used as it allows room for competition as it relates to pricing.
Except grouping by location would be limited given a patient’s
diseases will be unaccounted for along with variances among
the population. Having said that, I think grouping expenses by
both diagnosis, procedures and care centers would be ideal
2. considering DRG’s controls cost, promotes efficiency and
enhances transparency.
Taylor 3.1
Top of Form
Research by Baker and Baker (2014) supports that it is common
to group expenses by diagnoses and procedures for purposes of
planning and control. I do believe that grouping by diagnoses
and procedure are beneficial because it matches costs and
common classifications of revenues. However, grouping by care
setting recognizes different areas that services are delivered. It
was also researched that payments based on DRGs have
gradually become the principal means of reimbursing hospitals
for acute inpatient care in most high-income countries.5 The
most frequent reasons for introducing DRG-based payments are
to increase efficiency and contain costs.5 Street et al. have
reviewed the little evidence that is available on the impact of
different DRG-based payment systems in high-income countries
in Europe.6 Their findings suggest that DRGs generally help to
increase hospital efficiency by reducing the average length of
stay but that they also increase case volumes.
Tomlinson 3.1
Top of Form
Grouping expenses by diagnosis and procedure codes is
common practice and is a good measurement to use for control
and planning. I'm more familiar with the outpatient side of the
equation, so Current Procedural Terminology (CPT) codes.
Finance sends leadership daily reports that show by CPT code,
what each physician is billing. These codes list a description of
the service provided, so we can understand what supplies, labor,
etc. are associated with this code. We can use this data to start
to see trends or outliers with billing, revenue, and expenses.
Especially, if you are budgeting based on a flexible budget
versus a static budget, it's important to understand what
expenses are attributed to a particular CPT code. If you don't
3. budget appropriately, your budget won't flex appropriately to
support the operations.
Taylor 3.2
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From my own workplace, an example of indirect cost could be
the cost of the annual company Barbeque to thank the
employees for all their hard work the annual event is usually
held right before the fall to help take the edge off, and to get us
to the much-needed Christmas holiday this would be an example
of an indirect cost. A good example of a direct cost would be
the company pharmacy which is the place to where the
psychiatrist send all the clients prescriptions so our clients can
manage their symptoms.
Mazanec 3.2
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Direct costs are those that directly relate to specific
departments, or cost centers, whereas indirect costs are
overhead from support departments (
www.quizlet.com
). Baker and Baker (2014) also refer to this as costs that are
easily traced to a service or department (direct) to those that
cannot. Those that cannot are indirect costs.
There are many examples within my workplace that have direct
and indirect costs. For example, direct costs of the operating
rooms are the surgical instruments, personal protective
equipment, and implants that are used with each surgery
performed. Indirect costs would be the electric utilities used to
run the machines and equipment and the cleaning supplies used
to sterilize the spaces before and after surgery. Other indirect
costs would be any administrative salaries paid as part of the
decision-making process for the organization that may or may
not include decisions made for the OR.
Muhlecke 3.2
4. Top of Form
From your own workplace give an example of a direct cost and
an indirect cost.
Examples of direct costs in our clinic are employee salaries,
supplies and medical equipment that provide patient care.
Indirect cost includes office supplies, facilities maintenance,
fitness gym, interns, computers, leave and cell phones. Other
examples of indirect cost that the medical community use a lot
in the military is medical conference cost for senior leaders to
attend.
The direct cost in a medical facility is associated with what is
responsible for the main product in this case patient care.
Everything that directly helps provide patient care without
intervening is the direct cost. Indirect cost are the overheads
that run operations on a daily basis but not directly associated
with patient care.
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Buda 3.2
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Costs are categorized as direct and indirect. A direct cost is a
cost that can be attributed back to something specific such as a
patient, a procedure, or a work unit (Baker & Baker, 2014). At
our organization, surgical implants are a type of direct cost.
When a patient receives an implant, the cost of the implant is
attributed to that specific patient. Similarly, the expenses for
supplies used during the procedure to place the implant are
direct costs as they are traced to that specific procedure.
An indirect cost is one that cannot be assigned to a specific item
or area (Baker & Baker, 2014). These costs can account for
large portions of actual expense for an organization (
5. Anania, 2015).
Since these costs cannot be traced to a specific area or patient,
they need to be allocated in some manner. At my organization,
my work is an example of indirect cost. I work as an analyst for
Clinic Operations, and the work I do cannot be charged back to
any specific clinical department, patient procedure, or patient
care unit, so the cost associated with my work needs to be
allocated. Another example of indirect cost is space. Space-
related expenses, like power, water, maintenance, and
housekeeping, are combined, and a price per square foot is
determined. Departments are charged for space based on their
usage.
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