Homework SourseHealthcare Finance The following information represents acco
Healthcare Finance
The following information represents accounts receivable data for a small community hospital in Kentucky. The company has asked for an analysis of the data.
How does the A/R compare to last year this time?
Using the “Projected Uncollectible” totals, what should be the estimated allowance at 12/31? Show how this would be reported on the balance sheet.
Recalculate the estimated allowance using the detailed aging percentages. Show how this would be reported on the balance sheet.
As a whole, which insurer is taking the longest period of time to pay? What is that time? How would that compare to last year?
Identify 2 positive trends in the analysis, as well as 2 negative trends. Suggest alternatives for addressing the negative trends.
| Jones Hospital - A/R Aging report - December 31, 2016 - ADR $92,000 | ADR =90000 | ||||||||
| TOTAL | 0-30 | 31-60 | 61-90 | 91-120 | 121-150 | >150 | Prior Year A/R | ||
| Medicare | 830,000 | 452,000 | 208,000 | 111,000 | 45,000 | 12,000 | 2,000 | 905,000 | |
| State Medicade | 1,023,000 | 248,000 | 220,000 | 195,000 | 140,000 | 122,000 | 98,000 | 1,140,000 | |
| Commerical Payer | 1,270,000 | 565,000 | 302,000 | 165,000 | 107,000 | 87,000 | 44,000 | 1,142,000 | |
| Workers Comp | 155,900 | 45,000 | 32,000 | 48,000 | 9,800 | 6,100 | 15,000 | 111,000 | |
| Self-Pay | 776,000 | 195,000 | 122,000 | 138,000 | 97,000 | 137,000 | 87,000 | 697,000 | |
| TOTAL | 4,054,900 | 1,505,000 | 884,000 | 657,000 | 398,800 | 364,100 | 246,000 | 4,278,000 | |
| Protected Uncollectable | 12% | 19% | 24% | 37% | 66% | 82% | |||
| Jones Hospital - Detailed Aging Allowance - December 31, 2016 | |||||||||
| TOTAL | 0-30 | 31-60 | 61-90 | 90-120 | 121-150 | >150 | |||
| Medicare | xx | 11% | 24% | 31% | 54% | 70% | 90% | ||
| State Medicade | xx | 18% | 30% | 67% | 90% | 100% | 100% | ||
| Commerical Payer | xx | 40% | 15% | 22% | 46% | 78% | 90% | ||
| Workers Comp | xx | 15% | 31% | 60% | 100% | 100% | 100% | ||
| Self-Pay | xx | 80% | 85% | 93% | 98% | 99% | 100% |
Solution
To obtain better price for investments made in well being care, massive discussion has emerged on how satisfactory to align financial and well being incentives to acquire these pursuits (Dudley et al., 2007; IOM, 2007; Orszag and Ellis, 2007). Specializing in vendors, attention has grew to become to the current cost-for-carrier compensation model. By means of putting the incentives on quantity over worth, price-for-provider fails to create incentives for preventive care and care coordination amongst vendors (MedPAC, 2008; Miller, 2007). As medical professional practices spend an average of 3 hours per week interacting with wellbeing plans at a national price of $23 billion to $31 billion a year, the administrative complexity created through multiple documentation requisites to various billing, precertification, and credentialing forms takes time away from clinical care (Casalino et al., 2009). Failure to evidently differentiate the value and advantages of replacement providers, cures, and health plans obfuscates the indicators to consumers (Chernew et al., 2007). The papers in this chapter quilt a range of systems focusing on the payment and payer methods as sources of opportunities for decreasing expenses and making improvements to outcomes, underscoring the importance of streamlined and harmonized health insurance law, administrative simplification and consistency, and fee redecorate to focal point incentives on outcome and worth.
Harold D. Miller of the center for Healthcare first-class and cost Reform studies the broader evidence base of fee reforms impact on costs and best and supplies a conceptual framework for viable cost insurance policies. Constructing on Miller comments and strategies on techniques for transitioning to extra worth-based cost constructions, Amita Rastogi of Bridges to Excellence discusses the promising effects of the professional-METHEUS (supplier cost Reform for outcomes, Margins, proof, Transparency, trouble-reduction, Excellence, Understandability, and Sustainability) payment process, situated on a fee-for-episode procedure. She focuses in particular on the allowance within the PROMETHEUS system for possibly avoidable complications, which is designed to inspire discount in such issues with the aid of as a minimum 50 percent. Translating their estimates to the countrywide level, she studies a talents cost savings of $a hundred sixty five billion nationally from lowering potentially avoidable issues in 13 medical stipulations in the commercially insured populace.
David R. Riemer of the group Advocates Public coverage Institute highlights wellness insurance exchanges as a promising observe for introducing managed competitors into the coverage market. Drawing on the lessons discovered from one of the vital nation\'s most long-lasting and positive exchanges, operated with the aid of the Wisconsin State employee health Plan in Dane County, he means that three stipulations have to be in place to maximize the potential of health insurance exchanges in decreasing expenses: the pool of talents enrollees must have an ordinary or near-usual threat profile; the pool of enrollees have got to be as a minimum 20 percent of the population; and the enrollees must have clear fiscal incentives for determining well being insurance plans which have the bottom danger-adjusted bids.
Turning to purchaser incentives, Niteesh ok. Choudhry from Harvard institution discusses value-centered coverage design, focusing on the competencies have an impact on of tiering copayments for drugs headquartered on proof-centered price. He explains that, with insurance copayments set in a one-size-fits-all style, copayments for important, excessive-price services are normally set too excessive, and their resultant underuse results in neglected opportunities to hinder and deal with morbid and steeply-priced illnesses whilst copayments for nonessential, low-value services are mostly no longer set high sufficient to cut back their needless use. Even though the proof base is constrained, current reviews advocate that worth-established coverage design for 5 continual conditions could minimize charges by using 1 to 6 percentage, the similar of more than $2
both Robin J. Thomashauer from the Council for low cost first-class Healthcare (CAQH) and David S. Wichmann from UnitedHealth team conclude this session through discussing different techniques to administrative simplification. Thomashauer describes CAQH\'s work in riding payer collaboration and system consolidation by means of multistakeholder initiatives the Committee on running ideas for information alternate (CORE) and the common supplier Datasource (UPD). By way of progress of standardized working principles to facilitate administrative information exchange and promote interoperability, she relays that enterprise-vast adoption of CORE rules might save $three billion over the following three years. Citing the success of this pass-industry, public personal collaboration, Thomashauer outlines the need for continued collaboration all for each short-and lengthy-term goals, coupled with right policy help by way of the federal govt. Meanwhile, Wichmann outlines how the use of present technology could reinforce payment velocity and accuracy and streamline provider credentialing, privileging, and high-quality designation procedures, yielding financial savings of $332 billion over the following decade. To achieve these financial savings and fortify healthcare delivery, he urges shared, steady action throughout all payers business and governmental in partnership with physicians and hospitals.
