Unit 4 DB HCM 410

4

Unit 1 Discussion Board

Maria Thomas

Colorado Technical University

Dr. Jennifer Miller

June 30, 2022

Based on Krona’s budget, a wellness program has a significant impact on the revenue of the hospital itself. If the wellness program consists of outpatient revenue, pharmacy revenue, and home health revenue, then all the sources of the revenue are likely to increase. Consequently, the inpatient revenue is expected to decrease since wellness programs are always preventative and aim at reducing challenges at hand before medical issues occur or scale up to require hospitalization or extensive care. On the other hand, for inpatient revenue to increase, increased inpatient admissions must result in increased inpatient revenues.

On the other hand, readmission rates are likely to impact inpatient revenue negatively based on programs at the Centers for Medicare and Medicaid services and the Hospital Readmission Reduction Program (HRRP). The two programs penalize hospitals for failure to reduce avoidable readmissions. In other cases, some hospitals think that the monetary gain that comes from readmissions cannot outweigh the penalties for HRRP. However, it is best to find an optimal level such that readmission rates are left minimal to avoid penalties, but some can still make gains from the readmissions (Upadhyay, Stephenson & Smith,2019). The case brings in ethical concerns such that the best thing to do is offer medical care to all patients and minimize readmissions unless compulsory.

Outpatient services tend to increase reimbursement in the event of a wellness center. This is because Wellness centers focus more on outpatients to avoid the cost of managing inpatient services, which minimizes the potential for financial loss. Hospitals also get money from patients that do not need overnight care, and many of the outpatient services get covered by insurance providers.

Controlling hospital expenses can be conducted by improvement of revenues in several ways. This depends on overhead costs and whether they are recorded accurately and consistently; furthermore, an attempt of hospitals to decrease overhead costs, especially those that do not contribute to minimizing care. Other methods that can be applied to reduce hospital expenses include minimizing technology to cut costs, streamlining bureaucracy, using lab tests, and diagnosing images more selectively and effectively. Lastly, staff must be involved in the process to meet effective results (Altman & Young,2019). In the process of tracking and recording overhead costs efficiently, one can understand where money is saved and where it is wasted. The process of minimizing overhead costs wasted on care that is not effective or lacks best practice can effectively save money. Consequently, streamlining bureaucracy helps minimize many of the complicated processes, hence ensuring saving of money. Technology, on the other hand, helps minimize employee requirements and ensures that healthcare decisions are wise and more effective, reflected in saving funds.

References

Altman, S. H., & Young, D. A. (2019). Controlling payment for hospital services. In Critical Issues in US Health Reform (pp. 93-131). Routledge.

Upadhyay, S., Stephenson, A. L., & Smith, D. G. (2019). Readmission rates and their impact on hospital financial performance: a study of Washington hospitals. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 56, 0046958019860386.