Jackson Health System being one of the health providers in United States, it is facing a serious billing and collections challenge 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 in order to ensure that billing and collection process is made easy and efficiency.

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 an appropriate billing and collection policies that will improve their success rate in collecting medical bills from the uninsured patients. Two alternatives for this project will be identified and analyzed for guiding the management on how to improve their strategy aimed at billing and collection model being utilized by Jackson Health System (Boardman, Greenberg, Vining, & Weimer, 2017).

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 need to include a complete analysis that seeks to compare the proposed alternatives while taking into consideration the cost, nature, and the expected benefits.

In consideration to 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 where selected mainly because, the comparison between the two solutions needs to be made, so that the management of Jackson Health System can practical 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 in the near future if nothing on the billing and collection system is not 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 where 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 system. 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 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’s clear that this alternative although it has not lead the organization into losses, its benefits as well as the present value is not such much promising for Jackson Health System in the near future 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 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
This 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 very low.
This alternative also reduces the hospital financial crisis situation hence enhancing efficiency of service delivery to the patients.	40%	80	32	The score for this requirement is higher as compared to the first requirement because its 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 Jackson Health System. This is why 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 extend 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 loosing 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

Definitely, it is imperative to note that Jackson Health System is faced with a serious challenge that is threatening its survival due to lack of clear and efficient polices for billing and collection system 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 in near future. Notably, collecting medical bills from patients can be so difficult if there is no use of a billing software. Thus, HIPAA Video Compliance Software is one of the health technology that helps 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 for 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, it 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’s vivid that this alternative is taking the organization into the right direction as far as financial crisis is a concern. It’s clear that, the costs of the hospital have greatly reduced as a result of introducing the solution to the billing and collection challenge. It’s 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’s the desire of every patient to receive medication at an affordable price. This alternative will greatly reduce the cost of patients 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 constraints comes as a result of lacking of 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 as a result 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’s 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 very 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 reduces from 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 of performance have 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

References:

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.

Mishan, E. J. (2015). Elements of Cost-Benefit Analysis (Routledge Revivals). Routledge.

Nas, T. F. (2016). Cost-benefit analysis: Theory and application. Lexington Books.

Pearce, D. W. (2016). Cost-benefit analysis. Macmillan International Higher Education.

Schofield, J. A. (2018). Cost-benefit analysis in urban & regional planning. Routledge.

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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

****For C. Owens Only****

Billing and collection

Business Case

TABLE OF CONTENTS

1 Executive Summary

2 Introduction

3 gENERAL Project iNFORMATION

4 Ground Rules, Assumptions, and Criteria

5 aLTERNATIVES and aNALYSIs

5.1 Alternative A (Status Quo)

5.1.1 Cost and Economic Viability

5.1.2 Weighted Multi-criteria Analysis

5.1.3 Risk Summary

5.2 Alternative B: iNSTALLATION OF hIPAA VIDEO COMPLIANCE SOFTWARE

5.2.1 Cost and Economic Viability

5.2.2 Weighted Multi-criteria Analysis

5.2.3 Risk Summary

_1631279478.xls

Alternative_Analysis_Example

_1631290481.xls

Alternative_Analysis_Example

For C. Owens Only