Question Details

•	You are a hospital administrator, and your hospital is in financial difficulty. You are about to address the medical staff about the financial condition of the hospital, with the intention of getting them to act in ways that will help the hospital financially. In the old days, your message would have been (but perhaps not so directly) “Admit as many patients as possible and keep them in as long as you can.” However, your hospital now has to deal with various reimbursement methods, and each has its own set of incentives and disincentives. Depending on the payer, you may want physicians to admit more patients or fewer. Depending on the payer, you may want physicians to keep them in the hospital for long stays or for shorter stays.
1. What do you tell the medical staff regarding:
•	Medicare patients, whose hospital stays are paid via DRGs 
•	Medicaid patients, whose hospital stays are paid on a per diem cost basis 
•	HMO patients, whose hospital stays are paid on a negotiated per diem basis 
•	HMO patients, for whose care you have received a capitated rate covering the HMOs total enrollee base
2. For each of these categories of patients, does it hurt or help the hospital financially for physicians to
•	admit more patients 
•	keep them in the hospital for longer stays 
•	order more diagnostic studies
3. Obviously, no one payer accounts for all patients' coverage, although the majority of patients usually are public pay patients. What general steps might you recommend to address your financial difficulties?
Copy and paste the Assignment Template (provided below) and enter your responses in it.
Assignment 2: Reimbursement Methods and Hospital Finance
For each patient category, will it do the hospital financial harm if it	Patient Categories
	Medicare patients, whose hospital stays are paid via DRGs
 	Medicaid patients, whose hospital stays are paid on a per diem cost basis
 HMO patients, whose hospital stays are paid on a negotiated per diem basis
 HMO patients, for whose care you have received a capitated rate covering the HMOs total enrollee base
Admits more patients	Yes/No
Reasons:
 General steps you recommend to address your financial difficulties:

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