Question.2544 - Video and Article Summary: Is the Future of US Health Care to be Found in Value-Based Healthcare? Based on the videos and articles in the resources section, prepare a 3 to 4-page memo that answers the following question: What is value-based healthcare? What issues in healthcare is it designed to solve? Why does Michael Porter think it's the solution to current healthcare problems? In the two videos provided by CMS, what is the fundamental shift involved in value-based healthcare? Again, using the videos described in question 4, has value-based healthcare been effective and achieved its objectives? Now watch the following short video by Eric Bricker and described what the business case against value-based is. https://www.youtube.com/watch?v=ewXKGd48rDg What do you think value-based is a good solution to current healthcare pricing issues?
Answer Below:
Three accounting systems There were three accounting systems for evaluating the cost of the patient care in the three given cases. The first was the standard average bed/day-based system. The second was the speciality-based system and third one was the level-of-care system. These have different costing and therefore, the cost of treatment varies when these three systems are used for different patient’s requirement (Young, 2004). For the patient suffering from pancreatitis the treatment costs under the three systems are given as follows: Average bed/day-based system- the number of average bed/days is 4. Therefore, the treatment cost comes out to be $927.25 x 4 = $3709. Speciality-based system – under this the patient is treated under the division of gastroenterology the cost of treatment is = $842.61 x 4= $3370.44 Level-of-care system- the average patient needs 4 days, 8 MTUs and 5 nursing units. This makes the total cost as $236x4 + $182x8 +$84x5 = $2820 For the patient suffering from the cardiac dysrhythmia the treatment costs under the three accounting systems are as follows: Average bed/day-based system- the number of average bed/days is 3. Therefore, the treatment cost comes out to be $927.25 x 3 = $2,718.75. Speciality-based system – under this the patient is treated under the division of gastroenterology the cost of treatment is = $1166.47 x 3=$3499.41 Level-of-care system- the average patient needs 3 days, 12 MTUs and 10 nursing units. This makes the total cost as $236x3 + $182x12 +$84x10 = $3732. For the patient suffering from liver cancer, the treatment costs under the three accounting systems are given as follows: Average bed/day-based system- the number of average bed/days is 7. Therefore, the treatment cost comes out to be $927.25 x 7 = $6490.75. Speciality-based system – under this the patient is treated under the division of gastroenterology the cost of treatment is =$1950.58 x 7=$13654.06 Level-of-care system- the average patient needs 7 days, 20 MTUs and 38 nursing units. This makes the total cost as $236x7 + $182x20 +$84x38 = $8484. The differences in these accounting systems are resulting from the differences in care which is provided by the health care organization. These differences arise as some of the departments requires more nursing and other speciality support for giving the required care to the patients. hence, the third system is accounting for the different heads where the costs are incurred and this is different for the different patients as it accounts for the speciality as well as for the number of bed/days which have been used for the patient in the health care organization. Best system The best system amongst the three is the level-of-care system. This is because it takes into account the hidden charges which are not accounted in the other two systems. it takes into account the intensity of the care which has been imparted to the patient while in the health care organization. This includes all the factors which are responsible in ensuring a quality care to the patient. Therefore, this is the best system which can be adopted by the organization for charging its patient and maintaining transparency of the services which had imparted to the patients. Managerial perspective of using information The use of more information from the different sources have enabled the management to assess the different costs which are incurred while imparting care to the patient. For instance, while accounting for the speciality-based system, the costs are based on the care that is being provided by the different divisional department. Hence, this covers the special treatment which are given to the patient with their different health condition. In the third system, the information about the level-of-care is obtained which is considering the nursing units, MTUs and bed days in the health care organization. Therefore, it is considering more information to be used in the calculation. This would help in controlling the costs of treatment. Dr. Julian with more information from the different heads in the third system would be able to assess the costs differently. Hence, each of the heads can be further improvised to cut down the costs or make improvement for rendering quality care to the patient which gives them value for their money. Recommendation to Dr Julian It is recommended that Dr. Julian must opt for the third accounting system. This is because this system is accounting for all the charges which are incurred while imparting care to the patient. It is not only using the standard bed/days unit system but it is also considering the MTUs charges and the nursing units which are given to the patient. This system is better than the other two systems as it gives a clear picture of the total costs which are being incurred on the patient care delivery process. Better accounting practice also helps the management in finding out the different heads where the maximum and minimum costs are incurred (Vaši?ek, & Roje, 2010). Hence, this gives the management more ability to control costs as all the types of costs are under their supervision. Therefore, it is recommended that Dr. Julian must opt for the third system so that she has the improved ability to manage the overall treatment cost of the patients at the health care organization. This would also allow her to improve the quality of care as the cost can be kept under control (Pflueger, 2015). Thus, she can ensure that quality care is imparted to the patient which gives value for their money and best use of the money can be done in the optimum manner. References Pflueger, D. (2015). Accounting for quality: on the relationship between accounting and quality improvement in healthcare. BMC Health Services Research, 15(1), 1-13. Vaši?ek, D., & Roje, G. (2010). Accounting System in Croatian Public Healthcare Organizations: an Empirical Analysis. Theoretical & Applied Economics, 17(6). Young, D. W. (2004). Management accountingMore Articles From Management
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