What are the Day Op Suites total expenses?
What are the Day Op Suites total expenses?
FinFinance for HealthcareDavid Jones the new administrator for a surgical clinic was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department administration based on direct costs and laboratory based on tests. Use the information in the chart below to answer problems 1 2 and 3.Square Footage DirectExpenses Lab TestsUtilities $200000Administration 2000 500000Laboratory 2000 625000Day-op Suite 3000 1400000 4000Cystoscopy 1500 300000 500Endoscopy 1500 600000 500Total 10000 $ 3375000 50001. What are the Day Op Suites total expenses?2. What are the Cystoscopy Departments total expenses?3. What are the Endoscopy Departments total expenses?Use the following information for questions 4 5 and 6.Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile:Average Charge $15000Average LOS 5 DaysCost/Charge Variable Cost %Routine Charge $3600 0.80 60Operating Room 2657 0.80 80Anesthesiology 293 0.80 80Lab 1035 0.70 30Radiology 345 0.75 50Medical Supplies 4524 0.50 90Pharmacy 1230 0.50 90Other Ancillary 1316 0.80 60Total Ancillary $11400 0.75 504. In the above data set assume that the hospitals cost to charge ratio is 0.80 for routine services and 0.75 for all other ancillary services. Using this information what would the average cost of MS-DRG 470 be?5. Estimate the variable cost per MS-DRG 470 using the departmental cost/charge ratios and variable cost percentages.6. The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant is used your medical supply charges would be reduced by $2000. What is the estimated reduction in variable cost?ance for HealthcareDavid Jones the new administrator for a surgical clinic was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department administration based on direct costs and laboratory based on tests. Use the information in the chart below to answer problems 1 2 and 3.Square Footage DirectExpenses Lab TestsUtilities $200000Administration 2000 500000Laboratory 2000 625000Day-op Suite 3000 1400000 4000Cystoscopy 1500 300000 500Endoscopy 1500 600000 500Total 10000 $ 3375000 50001. What are the Day Op Suites total expenses?2. What are the Cystoscopy Departments total expenses?3. What are the Endoscopy Departments total expenses?Use the following information for questions 4 5 and 6.Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile:Average Charge $15000Average LOS 5 DaysCost/Charge Variable Cost %Routine Charge $3600 0.80 60Operating Room 2657 0.80 80Anesthesiology 293 0.80 80Lab 1035 0.70 30Radiology 345 0.75 50Medical Supplies 4524 0.50 90Pharmacy 1230 0.50 90Other Ancillary 1316 0.80 60Total Ancillary $11400 0.75 504. In the above data set assume that the hospitals cost to charge ratio is 0.80 for routine services and 0.75 for all other ancillary services. Using this information what would the average cost of MS-DRG 470 be?5. Estimate the variable cost per MS-DRG 470 using the departmental cost/charge ratios and variable cost percentages.6. The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant is used your medical supply charges would be reduced by $2000. What is the estimated reduction in variable cost?
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