5.1 homework
Suppose a managed care organization (MCO) offers to generate 500 operations a year but offers to pay only $300 per operation. Should we agree to this arrangement? We currently perform 2500 operations per year and have the capacity to easily handle 3000 per year.
What is the cost per operation at 2500 per year?
What is the cost per operation at 3000 per year?
What is your decision?
Does this incremental impact concern only MCO negotiations, or does it have wider implications?
Break-even analysis. Assume that all payers pay the same prospective rate for surgery patients in DRG 3.
Depreciation on equipment plus salary supplement for program supervision.
†Supplies, labor, etc.
What is the break-even volume of patients undergoing the surgery for DRG 3?
If there are three different types of patients undergoing surgeries, as follows, what would be the break-even point for each DRG?
If only 760 DRG 3 operations will take place, should we discontinue DRG 3 from an economic perspective?
