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Jackson Health systems
Business Case
Date: 10/13/2019
TABLE OF CONTENTS
5 2.1 Purpose of Business Case
5 3 gENERAL Project iNFORMATION
1 Executive Summary
Jackson Health System is one of the nonprofit academic medical system organizations, which are offering excellent care services in the world to any individual who visits it. The Public Health Trust manages this organization. The Public Health Trust is a group of citizens’ volunteers who are acting on behalf of the Miami-Dade Board of County Commissioners. This health organization is committed to structuring the healthcare of the public by offering a single as well as the high standard of quality health care for the occupants of Miami-Dade County, which is one of the Counties in Miami State of the United States.
Under the Jackson Health System, there is an integrated system, which is applied in the health care provisions. This integrated system comprises of the following subdivisions: First is the Jackson South Medical Center, second is the Jackson Memorial Hospital, third is Jackson Behavioral Health Hospital among many more other health facilities which are under Jackson Health System. The Jackson Health System has also the many primary cares as well as specialty care units. Among these are the two well-known long-term care-nursing facilities as well as the corrections health facilities. Specifically, the main aim of this business case is pursuing the improvement of the billing and collections processes of the Jackson Health System. After the organization’s analysis, this area was specifically identified as an area where improvement was required, upon the improvement of the billing and collections processes, the performance of the organization is anticipated to improve to a greater extent (Nichols et al. 2018).
2 Introduction
2.1 Purpose of Business Case
This Business Case Analysis for Jackson Health System includes an objectively documented analysis, comparison of alternatives and recommendations to address the billing and collections challenges faced by Jackson Health System. These challenges include the failure of practices to confront as well as deal with issues raised by the customers on the medical bill collection section, high deductible health plans, the economy, unemployed as well as uninsured patients without forgetting the nature of patient expectations. It is being submitted to the Jackson Health System Financial Management team for recommending some of the best billing and collection processes that can be embraced by the organization so that it gets itself out of these billing and collection predicaments (Shaaban, & Thandra, 2017). Alternatives are compared based on the best billing and collection practices that are being applied by the best-known hospitals in the United States as well as in the globe at large. Some of the hospitals where the alternatives have been recommended include The Mayo Clinic, Cleveland Clinic, Singapore General Hospital as well as Johns Hopkins Hospital among many more in the world-class list.
3 gENERAL Project iNFORMATION
3.1 Problem Statement
The Jackson Health System usually faces a challenge in the billing and collection of medical bills when dealing with patients who are not covered with any health insurance. More especially in the laboratory tests, medication, as well as pharmacy sections because of the greater number of patients being served and the inability of other patients to afford the medical bills. This happens in a scenario where a person from a low-income family is given a medical bill of for instance more than $400 to pay over the counter before receiving medications (Webb, 2015).
3.2 Background and Context
It is important to note that bill collection has never been a simple task. This situation is much more realistic for the medical bill collections, in which Jackson Health System has itself into a dilemma. In fact, according to a consumer credit report survey, 51.2% of collection tradelines are emanating from the unpaid medical bills. This survey also indicates further that, more than 42.9 million individuals have outstanding medical bills in the entire United States (Aiello et al. 2017). From these statistics, it is true that healthcare facilities face serious challenges about billing and collections from the customers who happen to be the patients. According to an article done by the Medical Group Management Association, together with the association for medical practice executives as well as leaders shows that the major challenges faced by the hospitals in collecting the bills include:
a) The inability of the hospitals to confront as well as handle the issues as expected.
b) The deductible health plans are too high.
c) Most of the low-income families are not employed hence uninsured.
d) The low expectations of the patients regarding their medical bills.
It is important to note that, to overcome the challenges of billing and collections, the hospitals must first be willing to execute new policies as well as procedures when there is a necessity. Failure to implement the policies as well as the necessary will make the hospitals where Jackson Health System to face a difficult financial crisis which will become much more difficult for them to get out of, besides impairing their performance as well as service delivery. The best way to terminate the challenges is to adopt the use of technology in the billing and collection process besides the legislature of the great United States moving with agency to enact laws, which will assist the healthcare facilities get out of the billing and collections predicaments. This will call for the government to ensure that all its citizens are insured under a government plan (Rivenbark, & Peterson, 2019)
If the medical billing and collection challenges are addressed, then the integrity of the doctors as well as nurses in their services delivery will be much improved besides the accountability of both hospitals and the healthcare providers. Failure to which, the value of the American health system will not be worth any more to its citizens because most of the services will be impaired due to financial crisis.
The problem is encountered in the Jackson Health System is the late payment of bills or the complete inability of the patients to pay the bills. Why? The patients are issued with bills, which they are unable to afford, the second why? Most of the patients are not insured, why? They are not employed, Why? They lack the academic qualifications or there is no employment for them, why? Poor government policies regarding health insurance as well as unemployment levels without forgetting poor billing collection techniques by Jackson Health System, why? Because of the inability of the government as well as the organization to implement new policies and procedures in medical bill collections. Countermeasure, the legislature, and the Jackson Health System's financial management team should move with urgency to formulate and execute new policies and procedures regarding billing and collections (Joshi-Patel, Walker, & Lo, 2018).
3.3 Goals
By address this billing and collections challenge at Jackson Health System, the following goals will be achieved:
a) The rate of failure in capturing the patients’ data will be minimized by almost 90% hence facilitating the reimbursements from claims.
b) The negligence of making the patients aware of their financial responsibilities regarding their medical bills will be greatly reduced by almost 95%, hence avoiding many instances of collection issues.
c) The cases of inaccurate coding will be greatly be reduced by almost 70% since this is the area that registers the highest cases of billing and collection errors. But with the embrace of technological bill collection methods, the inaccurate coding instances will be a thing of the past.
d) With the eradication of manual claims management processes, the Jackson Health System revenue collection department will be highly improved hence increasing the organization’s revenue collection by 7% in the first quarter of the financial year.
3.4 Scope
As far as the improvement of Jackson Health System is a concern, the billing and collections challenge should be undertaken with urgency in all its integrated systems. To start with, the sections of emergency, consultation, laboratory tests as well as medication should be the first sections to embrace the above-proposed recommendations as far as the billing and collections processes are a concern. The financial department of Jackson Health System should ensure that all the necessary measures are put in place to capture all the information regarding the patients who visited the Jackson Health Systems facilities for ensuring that there is easy billing and collections process. This will also reduce the delay in reimbursements because of the inability to capture the patients’ information (Lo, Walker, Dutta, & Joshi-Patel, 2018).
4 Ground Rules, Assumptions, and Criteria
4.1 Ground Rules
Before making any recommendations, several aspects must be taken care of. Among them is the key consideration of the rules and regulations in health. The public health act sets in place several rules that must be adhered to. First, the act prohibits hospitals from charging excessively in health services. The fees paid by patients are required to be considered fair. Therefore, making recommendations of any policies regarding the regulation of costings in patients must adhere to this regulation. It is also important to consider the affordable care act that has brought many citizens to insurance coverage (Sommers, Gunja, Finegold, & Musco, 2015). Any recommendation should consider the affordable care act as it will help low-income patients get their bills paid through government health plans.
Any assumptions should consider all the funding streams available. The main funder of health services is the federal government. In this case, the federal government has the mandate to provide resources and programs such as incentives that will help in reducing the costs of health services. This will, therefore, help in enhancing the affordability of health services. The premium personal insurance is another consideration. Any recommendations or policies to be implemented should seek to ensure better payment rates and in time payments to health, facilities to aid in easing the burden of unpaid bills at the health facility. Patient in pocket expenses should be paid instantly upon delivery of services.
Studies indicate that over 43 million Americans have unpaid medical debts. These figures are alarming as it has put a huge financial embargo to health facilities (Balasubramanian, & Jones, 2016). Therefore, any recommendations made are supposed to aim at significantly reducing this number. This number has since led to some health facilities to sue clients. These conditions are not ideal and therefore, assumptions made should consider that the billing and collections are a big problem.
4.2 Assumptions
Payment estimations are done in billing and collections departments are done to ensure transparency. Estimations help the patients to pay for the right value of the service. Besides, the payment estimations help patients and the billing department has an initial discussion on the patient’s responsibility in bill payment. With this process in place, a determination is made that the bill claimed by the health facility is legitimate. Therefore, the bills being legitimate indicates that the various sources of funding are required to pay the bill upon the health facilities' demand. The assumption here is that, since the process of billing is transparent, the sources of funding have the obligation to pay incurred bills.
Regulations provided through the Health insurance portability and accountability act (HIPAA) are important in-patient verification. The provisions in the act have provided avenues of reducing fraud in health facilities. Confirmation of patient identity is important as it ensures that both the personal and government packages pay for the designated patients. HIPAA was established over two decades ago and has evolved. The problem of billing at the Jackson health system can, therefore, be assumed to be attributed to poor implementation of Programs established by HIPA (Rollo, Hutchesson, Burrows, Krukowski, Harvey, Hoggle, & Collins, 2015). Specifically, The HIPPA compliant video software may have some flaws that need to be mend.
The patient's financial clearance and health insurance eligibility is another key consideration among the assumptions. The informed decisions made upon patient clearance may have some flaws and therefore leading to the accumulation of bills. These decisions determine which patients are eligible for financial help. Poor decisions are made may lead to patients eligible for help not getting the necessary help from the sources of funding and therefore leading them to fail to pay bills. Health insurance eligibility flaws can be assumed to cause problems that lead to processing errors and denial of funds from insurance providers. Costly reworks may also be caused when proper eligibility checks are not performed on the patient and therefore leading to a lack of responsibility for paying bills.
4.3 Evaluation Criteria
The HIPAA video compliance software is an important element in bills and collections. The software is robust because of being built through great technical expertise. This, therefore, enables the software services to be always available apart from a few occasions of scheduled maintenance (Gurung, & Kim, 2015). The software is therefore reliable as it provides data clerks to verify and authenticate patients. Besides, the software plays an important role in the processing of patient's bills. This, therefore, makes it a reliable method of billing and collection monitoring.
On another dimension, The HIPAA video compliance software supports health functions such as patients tracking through video. With his capability, the support of telemedicine helps in the reduction of costs of health services and therefore supporting patients in managing payments of health services. The system entropy of the software is low with the software system expected life is over 10 years. Therefore, the economic feasibility of the system is good as the initial capital required to implement the software is justified by the large useful life of the system.
The manageability of the HIPAA video compliance software is satisfactory. The software is cloud-based and therefore the system can be managed from any remote location. The system is also sustainable as its maintenance costs are relatively manageable. The security of the cloud servers is high and supports an infinite storage facility and therefore enhancing the sustainability of storage space (Peterson, & Watzlaf, 2014). The system is also versatile as it provides for various uses. Patient management, patient care among other services.
5 aLTERNATIVES and aNALYSIs
Jackson Health System is one of the health providers in the United States, it is facing serious billing and collections challenges that need urgent attention. Particularly, this business case is meant to address this major concern for ensuring that the hospital does not sink into financial crisis. This section covers specific alternatives which financial department at Jackson Health System should explore to ensure that billing and collection process is made easy and efficient.
In modern days, there is an increasing number of high-deductible plans in the American healthcare sector – a scenario that has shifted many medical bills to patients. Moreover, the increasing number of uninsured patients in calling for medical organizations to find appropriate billing and collection policies that will improve their success rate in collecting medical bills from uninsured patients. Two alternatives for this project will be identified and analyzed for guiding the management on how to improve their strategy aimed at the billing and collection model being utilized by Jackson Health System (Boardman, Greenberg, Vining, & Weimer, 2017).
In the process of making an informed decision on the improvements to be made by the Jackson Healthcare System, the management should explore multiple alternatives required to address the need and solution to the current organizational problem (s). There is a need to include a complete analysis that seeks to compare the proposed alternatives while taking into consideration the cost, nature, and expected benefits.
In consideration of the billing and collection problems facing the Jackson Health system, two main alternatives have been considered for this analysis. The first alternative is Status Quo, which entails just maintaining the Jackson Health System the way it is, this means that nothing should be done to the billing and collection system. The second alternative is “Installation of HIPAA Video Compliance Software.” The HIPAA video compliance software is an important element in bills and collections. The software is robust because it is built through great technical expertise. This, therefore, enables the software services to be always available apart from a few occasions of scheduled maintenance (Gurung, & Kim, 2015).
The above alternatives were selected mainly because the comparison between the two solutions needs to be made so that the management of the Jackson Health System can practically see the need to implement some policies. More especially the policies related to the information and technology, which will aid in rescuing the health facility from the financial crisis, which it may face soon if nothing on the billing and collection system is done. The description of these alternatives has been undertaken below with their respective costs and benefits analysis, requirements and constraints, as well as risks. The use of these methods as well as scoring methodologies were used to enhance easy compatibility between the two alternatives.
5.1 Alternative A (Status Quo)
This alternative seeks to “keep things as they are” meaning that the organization is seeking to “do nothing for now.” From this perspective, Jackson Health System will not be willing to make any changes to the current policies or models regarding billing and collection systems. This can happen when the resources required to adopt other proposed alternatives are not available. According to Vinney (2018), “Status Quo Analysis of the existing systems forms the central starting point to improving quality, optimizing projects, avoiding wrong decisions, preserving investments and saving money and time.” The selection of this alternative is based on the current state of the Jackson Health System in terms of financial resources and skills. This alternative will consider many factors including the fact that whether the organization is in a position of adopting any other alternative that seeks to alter its current billing and collection system. It should be noted that for Jackson Health System to be in a position of adopting another alternative to replace its current billing and collection system, it must be financially stable. This means that it can be in a position of running its operations without straining and at the same time be in a position of catering for the expenses of purchasing, installing, at the same time training the staff on the use and application of the alternative system (Pearce, 2016).
5.1.1 Cost and Economic Viability
Cost-Benefit Analysis
Initial
Investment
Year 1Year 2Year 3
Costs
$ (million)
Non-recurring Costs
Cost of Development$26,400
Cost of Law Suits$1,000$1,300$1,600
Cost of Fire or Theft of files$240$200$180
Recurring Costs
Cost of Rejected Claims$1,580$2,300$2,540
Cost of Salaries for Staff$18,450$23,600$27,540
Cost of Drugs, supplies, Vaccines$18,500$23,970$24,700$26,400
Total Costs$44,900$45,240$52,100$58,260
Benefits
Revenue from Insurance Biling$18,450$24,856$27,550
Revenue from Research and Teaching$10,500$13,600$13,750$15,500
Revenue from Donations$35,000$38,300$42,600$45,305
Total Benefits$45,500$70,350$81,206$88,355
Net Costs/Benefits$600$25,110$29,106$30,095
Discount Rate5.00%
Present Value$73,249
It was clear that this alternative although it has not to lead the organization into losses, its benefits, as well as the present value, is not such much promising for Jackson Health System soon putting other financial constraints into consideration.
5.1.2 Weighted Multi-criteria Analysis
This alternative satisfies some of the requirements of Jackson Health System like reducing the financial crisis in both the hospital and the patients. This is because; the amount of money that could have been utilized in the purchasing as well as installation of the other alternative is taken back to the hospital’s daily operations. Secondly, the burden of shifting the other alternative costs to the patients is also eradicated by this alternative. Also, this alternative has helped Jackson Health System in overcoming some constraints like a financial crisis as well as efficient service delivery to the patients (Celli, Pilo, Pisano, & Soma, 2018).
|
Alternative # 1: Weighted Multi-criteria Analysis |
||||
|
Requirements |
Weight |
Rating |
Score |
Score Rationale |
|
These alternative takes care of the excessive burden of the project implementation costs which would have otherwise been transferred to the medical bills of patients. |
20% |
40 |
8 |
The score for this requirement is low as compared to the second requirement since its priority as far as patients’ consideration is a concern is exceptionally low. |
|
This alternative also reduces the hospital financial crisis situation hence enhancing the efficiency of service delivery to the patients. |
40% |
80 |
32 |
The score for this requirement is higher as compared to the first requirement because it takes care of the Jackson Health System stability as well as the patients’ needs simultaneously. |
|
Sub-Total |
60% |
120 |
40 |
The total score of the priorities of the two requirements is the summation of the two scores of the requirements. |
|
Constraints |
|
|
|
|
|
Poor implementation of billing and collection policies |
25% |
85 |
21.25 |
The poor execution of policies related to billing and collection is the major constraint in the Jackson Health System. Therefore, its score is high. |
|
Straining in service delivery due to financial crisis |
15% |
30 |
4.5 |
Although Jackson Health System has never made losses since it is a non-profit organization, its service delivery to the patients is normally hindered to some extent due to financial crisis, which tend to be observed due to billing and collection challenges. |
|
Sub-Total |
40% |
115 |
25.75 |
|
|
Total Score |
100% |
235 |
65.75 |
|
|
|
||||
|
1. Score = “Rating” multiplied by “weight” |
5.1.3 Risk Summary
This alternative has been evaluated to be of high risk. The areas of greatest risk, for instance, include financial area since due to poor billing and collection policies, the hospital tends to lose much of its revenue through bad debts. The second risk is on performance whereby, the hospital services delivery is negatively impacted due to financial constraints. Finally, there is a risk of losing the customers because, the performance of the hospital is what brings the patients, otherwise they can look for another alternative like a different hospital (Nas, 2016).
|
Risk Category |
Impact |
Likelihood |
Risk Level (Impact x Likelihood) |
|
Financial risk |
High (60%) |
80 |
48 |
|
Poor performance risk |
Medium (30%) |
40 |
12 |
|
Market lose risk |
Low (10%) |
30 |
3 |
|
Overall |
100% |
150 |
63 |
5.2 Alternative B: iNSTALLATION OF hIPAA VIDEO COMPLIANCE SOFTWARE
It is imperative to note that Jackson Health System is faced with a serious challenge that is threatening its survival due to a lack of clear and efficient policies for billing and collection systems, especially for uninsured patients. With more than 43 million patients having medical debts, this is a clear indication that the medical sector is not on the right track. Unless medical institutions like Jack Health System makes the necessary changes in their billing and collection system, then they are at risk of suffering financial problems soon. Notably, collecting medical bills from patients can be so difficult if there is no use of billing software. Thus, HIPAA Video Compliance Software is one of the health technologies that help to “streamline the administration of your practice, including identifying patients who are behind in their payments, tracking past due bills and automating late fees” (Deshpande et al., 2015). Particularly, it will play a key role in enhancing the efficiency and effectiveness of billing and collections in facility and avoid the possibility of running into losses.
The software is therefore reliable as it provides data clerks to verify and authenticate patients. Besides, the software plays an important role in the processing of patient's bills. This, therefore, makes it a reliable method of billing and collection monitoring. On another dimension, The HIPAA video compliance software supports health functions such as patients tracking through video. With his capability, the support of telemedicine helps in the reduction of costs of health services and therefore supporting patients in managing payments of health services.
The manageability of the HIPAA video compliance software is satisfactory. The software is cloud-based and therefore the system can be managed from any remote location. The system is also sustainable as its maintenance costs are relatively manageable. The security of the cloud servers is high and supports an infinite storage facility and therefore enhancing the sustainability of storage space (Peterson, & Watzlaf, 2014). The system is also versatile as it provides for various uses. Patient management, patient care among other services (Celli, Pilo, Pisano, & Soma, 2017).
Regulations provided through the Health insurance portability and accountability act (HIPAA) are important in-patient verification. The provisions in the act have provided avenues of reducing fraud in health facilities. Confirmation of patient identity is important as it ensures that both the personal and government packages pay for the designated patients. HIPAA was established over two decades ago and has evolved. The problem of billing at the Jackson health system can, therefore, be assumed to be attributed to poor implementation of Programs established by HIPA (Rollo, Hutchesson, Burrows, Krukowski, Harvey, Hoggle, & Collins, 2015). Therefore, specifically, the HIPPA compliant video software if implemented at Jackson Health System, will streamline the billing and collection challenges hence contributing to a permanent solution. In fact, the system entropy of the software is low with the software system expected life is over 10 years. Therefore, the economic feasibility of the system is good as the initial capital required to implement the software is justified by the large useful life of the system (Schofield, 2018).
5.2.1 Cost and Economic Viability
Cost-Benefit Analysis
Initial
Investment
Year 1Year 2Year 3Year 4
Costs
$(million)
Non-recurring Costs
Cost of HIPAA Video Purchase$32,400$0$0$0$0
Cost of Law Suits$120$70$40$0
Cost of Theft of files$100$80$50$10
Recurring Costs
Cost of Rejected Claims$268$170$120$20
Cost of Salaries for Staff$19,450$23,900$27,840$30,550
Cost of Drugs, supplies, Vaccines$18,500$24,970$25,300$26,900$34,600
Total Costs$50,900$44,908$49,520$54,950$65,180
Benefits
Revenue from Insurance Biling$22,450$28,856$32,550$41,200
Revenue from Research$10,500$13,600$13,750$15,500$18,650
Revenue from Donations$35,000$39,300$44,200$46,305$49,870
Total Benefits$45,500$75,350$86,806$94,355$109,720
Net Costs/Benefits($5,400)$30,442$37,286$39,405$44,540
Discount Rate5.00%
Present Value$121,995
From the above cost-benefit analysis, it is vivid that this alternative is taking the organization in the right direction as far as the financial crisis is a concern. The costs of the hospital have greatly reduced because of introducing the solution to the billing and collection challenge. It is due to this that the benefits of the hospital increased remarkably as compared to that of alternative A. Also, the present value of the hospital increased remarkably from $73,249 of alternative A to $121,995 of this alternative. Therefore, I recommend that the hospital should embrace this alternative (Mishan, 2015).
5.2.2 Weighted Multi-criteria Analysis
|
Alternative # 2: Weighted Multi-criteria Analysis |
||||
|
Requirements |
Weight |
Rating |
Score |
Score Rationale |
|
Financial requirement; this is a requirement that is fulfilled by this alternative through minimization of the hospital bills collection from the patients as well as increasing the revenues from insurance billing. |
50% |
87 |
43.50 |
The aim of introducing another alternative than the status quo by Jackson Health System is to try to curb the challenges of billing and collection, which might lead the hospital into a financial crisis. This is the reason as to why the financial requirement has been prioritized more. |
|
Reduction of per capita cost of healthcare requirement; it is the desire of every patient to receive medication at an affordable price. This alternative will greatly reduce the cost of patient services since the hospital will not be imposing higher rates to the patients in the fear of facing financial crisis. |
30% |
62 |
18.60 |
Because of the reduced financial risk by this alternative, the costs of healthcare services will also be reduced for the patients. |
|
Sub-Total |
80% |
149 |
62.10 |
|
|
Constraints |
|
|
|
|
|
Incredible patients' feedback; this constraint comes because of lacking formal training on the operation of the software. |
9% |
20 |
1.80 |
The incredible patients feedback constraint will result from this alternative, although with a slightly small score because the alternative will be specifically beneficial to the hospital and not the patients. |
|
Money oriented; this constraint comes because of the hospital’s desire to maximize the returns so that it can recover the purchase, installation as well as maintenance costs of this alternative, hence leading to the collapse of patients first quality. |
11% |
35 |
3.85 |
The constraint of money-oriented has scored higher than incredible patients' feedback because it is believed that the hospital will try as much as possible to recover the software installation costs. |
|
Sub-Total |
20% |
55 |
5.65 |
|
|
Total Score |
100% |
204 |
67.75 |
|
|
|
||||
|
1. Score = “Rating” multiplied by “weight” |
5.2.3 Risk Summary
This alternative has been evaluated to be of exceptionally low risk. The areas of greatest risks from the first alternative have been greatly reduced in terms of risk rates and impacts by this alternative to almost nil. For instance, financial risk due to poor billing and collection policies, have been reduced from the likelihood of occurrence rate of 48 of the first alternative to 6. The second risk is on performance whereby, the hospital services delivery is negatively impacted due to financial constraints from the first alternative have been reduced from 12-occurrence rate to 2-occurrence rate. Finally, there is a risk of losing the customers because performance has been reduced from 3-occurrence rate in the first alternative to 1.20 in this second alternative.
|
Risk Category |
Impact |
Likelihood |
Risk Level (Impact x Likelihood) |
|
Financial risk |
Low (20%) |
30 |
6 |
|
Performance risk |
Low (10%) |
20 |
2 |
|
Market risk |
Low (8%) |
15 |
1.20 |
|
Overall |
100% |
150 |
9.20 |
6 Preferred Solution
|
Overall Comparison of Alternatives |
Financial |
Non-Financial |
Best Option |
|||||
|
|
Net Present Value |
Cost |
Unfunded Costs |
Savings |
Requirements (Exceeds, Meets, Not Acceptable) |
Operational Benefits (Significant, Moderate, Low, None) |
Managed Risk (Low, Med, High) |
|
|
Alternative 1 (As-Is) Maintain a Status Quo |
49,911.48 |
0.00
|
N/A |
N/A |
Meets requirements |
LOW |
HIGH |
- |
|
Alternative 2 HIPAA video compliance software |
101,094.57 |
$5,400 |
NA |
NA |
Exceeds Requirements |
SIGNIFICANT |
LOW |
BEST |
The second alternative is the most suitable option to resolve the billing problems facing the Jackson Health System. The most important aspect to consider in selecting this alternative is that it yields a higher NPV compared to the other alternative presented. Installing the HIPAA video compliance software would be more beneficial to the Jackson Healthcare System than any other alternative. NPV is the most superior measure that offers a reliable analysis of planned investment and its projected benefits, (Marchioni & Magni, 2018). Installation of the HIPAA compliance video software yields an NPV of 101,094.57 while maintaining a status quo gives an NPV of 49,911.48. Based on these results, the HIPAA video compliance software gives an NPV that is much greater compared to the status quo. Therefore, it would be most appropriate for the Jackson Health System to adopt and implement alternative B. By so doing, the Jacksons Health System would avoid facing a financial crisis because of failed billing systems.
As noted above, the second alternative yields a greater NPV to the Jackson Health Systems. This would be quite attractive to investors and sponsors interested in financing the installation of the HIPAA video compliance software. Considering the strained financial muscle of the Jackson Health Systems, external funding and financing will be very much needed to resolve the billing and collection crisis. Most external financiers often base their funding decisions on the NPV values generated on a proposed project. A higher NPV is always an indicator of good returns and ascertains the viability of a proposed project, (Miorando, et.al., 2018). In this case, the Jackson Health Systems managers would have an easy time seeking financial support, based on the high NPV of alternative A. Also, the cost total cost for alternative A is more reasonable compared to the cost that would be incurred in the future if no action is taken. While alternative A may seem to have no costs currently, it would lead to hefty losses in the future. This would amount to inflated costs of managing and recovering from a financial crisis that would befall the Jackson Health System. For such reasons, alternative B is best suited to salvage the financial situation and prevent inflated costs in the future.
Another factor to consider in selecting the best alternative would be the risk level associated with each alternative. Alternative A, which involves maintaining a status quo at the Jackson Health System, has a high level of risk. This is because the alternative would not bring in any structural or management changes to resolve the billing problem. Therefore, the Jackson Health System would soon be trapped in a financial crisis if alternative A is adopted. Patients would still be defaulting on payments hence depriving the facility of its revenue collections. The billing process at the facility would also remain ineffective thus worsening the already constrained financials at the facility. On the other hand, alternative B, although involves a higher cost, is less risky. Installation of the HIPAA video compliance software would only be an expense in the initial year of operations. In the years that follow, the Jackson Health System would have a much effective billing process that would subsequently yield more returns to the facility. Installation of the HIPAA video compliance software significantly lowers the total costs incurred while undertaking billing and collection services.
Considering the above-mentioned factors, the best alternative for implementation would be an installation of HIPAA video compliance software. This alternative would effectively enhance the billing and collection processes and in turn, promote better financial performance. The process of patient verification and authentication would significantly be simplified. Ultimately, alternative B is best suited to enhance service delivery to all patients; insured or uninsured, rich or poor. Moreover, alternative B serves as a long-term solution; HIPAA video compliance video is usable for a period of up to 10 years after installation.
6.1 Financial Considerations
Funding is the most crucial part of implementing HIPAA video compliance software. In this case, the first financial consideration would be the financial position of the Jackson Healthcare System. It is better to evaluate the ability or inability of an institution to solely finance its proposed projects before seeking external funding. Furthermore, the cost of acquiring external finances must be considered before deciding. It would be best to finance the implementation of alternative B partly with revenues generated by the Jackson Healthcare system. However, the level of revenue allocated to fund the project should be structured such that it does not affect the normal operations and service delivery. The optimal revenue allocation would be 40% of the total cost estimated. This will ensure minimal disruption of normal operations. It will also enable the institution to continue covering its operational costs independently, (Harris, et.al., 2017). The remaining 60% could be financed through external funding from sponsors and investors concerned with enhancing healthcare services in society.
It is necessary to have an actionable plan of implementation to acquire external funding. The operational feasibility of the proposed implementation of HIPAA video compliance software must be indicated before requesting external funding. The exact number of staff that are required to operate the system after installation must be identified. Also, the relevant skills necessary to operate the software must be acquired before requesting funding, (Finkler, et.al., 2018). Grants could be used to finance the installation of the proposed software. Loans are also an option that could be considered as a source of funds. However, the sources of funds that have minimal cost should be prioritized.
6.2 Preliminary Acquisition Strategy/Plan
The acquisition strategy for the HIPAA compliance software would involve analyzing the size and environment of the institution where it is to be installed. The type of institution as well as the culture must also be considered in the acquisition plan, (Obeng & Paul, 2019). In this case, the first step toward acquisition would be implementing a means of access control. The already existing computer hardware could be utilized, and new ones sourced to replace the faulty hardware. The access control would establish an authentication procedure by granting a unique PIN to each system user. The second step would be sourcing for data encryption and decryption tools that facilitate HIPAA compliance software. The next step would be the installation of activity log record services to the system. To conclude the acquisition, the specific administrative safeguards to the system must be sourced for and installed. In conclusion, all the staff members who are directly involved in implementing the proposed strategy should be trained before the software is fully operational, (Agris & Spandorfer, 2016).
References:
Agris, J. L., & Spandorfer, J. M. (2016). HIPAA Compliance and Training: A Perfect Storm for Professionalism Education? The Journal of Law, Medicine & Ethics, 44(4), 652-656.
Aiello, F., Durgin, J., Daniel, V., Messina, L., Doucet, D., Simons, J., ... & Schanzer, A. (2017). Surgeon leadership in the coding, billing, and contractual negotiations for fenestrated endovascular aortic aneurysm repair increases medical center contribution margin and physician reimbursement. Journal of vascular surgery, 66(4), 997-1006.
Balasubramanian, S., & Jones, E. C. (2016). Hospital closures and the current healthcare climate: the future of rural hospitals in the USA. Rural and remote health, 16(3), 3935.
Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2017). Cost-benefit analysis: concepts and practice. Cambridge University Press.
Celli, G., Pilo, F., Pisano, G., & Soma, G. G. (2017). Cost-benefit analysis for energy storage exploitation in distribution systems. CIRED-Open Access Proceedings Journal, 2017(1), 2197-2200.
Celli, G., Pilo, F., Pisano, G., & Soma, G. G. (2018). Implementation of Energy Storage in MV distribution networks–A Cost/Benefit Analysis in the Italian regulatory framework. In CIGRE 2018.
Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2018). Financial management for public, health, and not-for-profit organizations. CQ Press.
Gurung, S., & Kim, Y. (2015, April). Healthcare privacy: how secure are the VOIP/video-conferencing tools for PHI data?. In 2015 12th International Conference on Information Technology-New Generations (pp. 574-579). IEEE.
Harris, C., Allen, K., Brooke, V., Dyer, T., Waller, C., King, R., ... & Mortimer, D. (2017). Sustainability in Health care by Allocating Resources Effectively (SHARE) 6: Investigating methods to identify, prioritize, implement and evaluate disinvestment projects in a local healthcare setting. BMC health services research, 17(1), 370.
Joshi-Patel, A. A., Walker, L., & Lo, H. Y. (2018). Improving Critical Care Documentation and Billing Amongst Pediatric Hospital Medicine Providers.
Lo, H. Y., Walker, L., Dutta, A., & Joshi-Patel, A. (2018). Improving Billing Practices for Patients Admitted for Neonatal Fever.
Lulla, A., Emmert, S. E., Cienki, E. A., & Chitra, S. (2017). U.S. Patent Application No. 15/242,296.
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Mishan, E. J. (2015). Elements of Cost-Benefit Analysis (Routledge Revivals). Routledge.
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Obeng, O., & Paul, S. (2019). Understanding HIPAA Compliance Practice in Healthcare Organizations in a Cultural Context.
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EPLC_Business_Case_Template.doc
_1631279478.xls
Alternative_Analysis_Example
| Cost-Benefit Analysis | ||||
| Initial Investment | Year 1 | Year 2 | Year 3 | |
| Costs | $ (million) | |||
| Non-recurring Costs | ||||
| Cost of Development | $26,400 | |||
| Cost of Law Suits | $1,000 | $1,300 | $1,600 | |
| Cost of Fire or Theft of files | $240 | $200 | $180 | |
| Recurring Costs | ||||
| Cost of Rejected Claims | $1,580 | $2,300 | $2,540 | |
| Cost of Salaries for Staff | $18,450 | $23,600 | $27,540 | |
| Cost of Drugs, supplies, Vaccines | $18,500 | $23,970 | $24,700 | $26,400 |
| Total Costs | $44,900 | $45,240 | $52,100 | $58,260 |
| Benefits | ||||
| Revenue from Insurance Biling | $18,450 | $24,856 | $27,550 | |
| Revenue from Research and Teaching | $10,500 | $13,600 | $13,750 | $15,500 |
| Revenue from Donations | $35,000 | $38,300 | $42,600 | $45,305 |
| Total Benefits | $45,500 | $70,350 | $81,206 | $88,355 |
| Net Costs/Benefits | $600 | $25,110 | $29,106 | $30,095 |
| Discount Rate | 5.00% | |||
| Present Value | $73,249 |
_1631290481.xls
Alternative_Analysis_Example
| Cost-Benefit Analysis | |||||
| Initial Investment | Year 1 | Year 2 | Year 3 | Year 4 | |
| Costs | $(million) | ||||
| Non-recurring Costs | |||||
| Cost of HIPAA Video Purchase | $32,400 | $0 | $0 | $0 | $0 |
| Cost of Law Suits | $120 | $70 | $40 | $0 | |
| Cost of Theft of files | $100 | $80 | $50 | $10 | |
| Recurring Costs | |||||
| Cost of Rejected Claims | $268 | $170 | $120 | $20 | |
| Cost of Salaries for Staff | $19,450 | $23,900 | $27,840 | $30,550 | |
| Cost of Drugs, supplies, Vaccines | $18,500 | $24,970 | $25,300 | $26,900 | $34,600 |
| Total Costs | $50,900 | $44,908 | $49,520 | $54,950 | $65,180 |
| Benefits | |||||
| Revenue from Insurance Biling | $22,450 | $28,856 | $32,550 | $41,200 | |
| Revenue from Research | $10,500 | $13,600 | $13,750 | $15,500 | $18,650 |
| Revenue from Donations | $35,000 | $39,300 | $44,200 | $46,305 | $49,870 |
| Total Benefits | $45,500 | $75,350 | $86,806 | $94,355 | $109,720 |
| Net Costs/Benefits | ($5,400) | $30,442 | $37,286 | $39,405 | $44,540 |
| Discount Rate | 5.00% | ||||
| Present Value | $121,995 |