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Hospitals

Hospitals. HAS 4320. Revenue. Philanthropy and grants Global budgets Charges Per diem. Revenue. Cost reimbursement Per Case Capitation Managed care contracts. Funds Out. Payroll = 54% Professional fees = 4% Supplies and other = 33% Capital depreciation and interest = 9%.

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Hospitals

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  1. Hospitals HAS 4320

  2. Revenue • Philanthropy and grants • Global budgets • Charges • Per diem

  3. Revenue • Cost reimbursement • Per Case • Capitation • Managed care contracts

  4. Funds Out • Payroll = 54% • Professional fees = 4% • Supplies and other = 33% • Capital depreciation and interest = 9%

  5. Financial Management • Cost shifting • Losing proposition • Medicare and Medicaid • Services and patient groups

  6. Financial Management • Medicare changes • Cream skimming • …Managed care systems

  7. Capital Financing • Hill-Burton Act (1946) • Borrowed funds • Three factors • Guaranteed revenues • Tax exemption • Cost reimbursement

  8. Capital Financing • Borrowing loses steam • Hospital systems

  9. Who gets the profits? • Hospitals are doctors’ workshops • Hospitals are managed for managers • Little difference between for-profit and not-for-profit

  10. Competition Among Hospitals • Pros and cons • Why is it good and why is it useless • Think about… • One hospital versus 10 hospitals • 10 hospitals agreed not to compete on price • 1975 versus today

  11. Some findings… • Stanford • 1980s competition is bad • 1990s competition is good • Technology Advantages

  12. Centers of Excellence • DHHS Office on Women’s Health • 15 centers • $12 million in funding • $129 million more • Enhanced research • Increased opportunities • Expanded resources

  13. Centers of Excellence • Increased capacity • Increased women’s involvement • Closest to us • UCLA • UCSF • Univ of Washington

  14. Regulation • Some hospitals cost more than others • Short-run versus long-run

  15. Uncertainty and budgeting • Foreseeable and unknown • How do managers deal with change?

  16. Theory and Accounting Measures • Deviation raises costs • Unobvious charges • Average over many days

  17. Economies of scale • 400-bed hospital is good • Too few beds is bad • Too large is bad • Contracting out

  18. Quality and cost • New cures are cheaper • No price competition

  19. Measuring competition • Survivor analysis • Community care • Monopolies • Market share

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