Cost-shifting Problem
Assume your organization has 100 patients analyzed in the following manner:
1. Your organization's average cost per patient is $2,000. Calculate the charge necessary to recover your cost.
Financial Class |
No. |
Cost |
Charges |
Collections |
Profit |
Medicare |
15 |
30,000 |
30,000 |
30,000 |
0 |
Medicaid |
25 |
50,000 |
50,000 |
45,000 |
-5,000 |
Managed Care #1 |
20 |
40,000 |
40,000 |
32,000 |
-8,000 |
Managed Care #2 |
10 |
20,000 |
20,000 |
15,000 |
-5,000 |
Private |
10 |
20,000 |
20,000 |
20,000 |
0 |
Charity |
10 |
20,000 |
20,000 |
0 |
-20,000 |
Bad Debt |
10 |
20,000 |
20,000 |
0 |
-20,000 |
Total: |
100 |
200,000 |
200,000 |
142,000 |
-58,000 |
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