Question

Bay Pines Medical Center- Chapter 7: I have been working on a problem from Healthcare Finance and accounting introduction and I believe it is part of chapter 7. I have a chart that shows the service categories, Inpatient days per 1,000 enrollees, and average cost per day. I believe I have calcuated PMPM correctly. The next step is to calculate the rate if utilization management program were to reduce utilization within each patient service category by 10 percent and then 20 percent. I have attempted that in chart 2 but do not know if I am doing that correctly. Please advise:

Service Category	Inpatient Days per 1,000 Enrollees	Average Cost per Day	Average Cost per member per month
General	150	$1,500	18.75
Surgical	125	$1,800	18.75
Psychiatric	70	$700	4.08
Alcohol/Drug Abuse	38	$500	1.58
Maternity	42	$1,500	5.25
Total	425	$1,367	48.41
Administrative cost			5.37
Total PMPM			53.78

Service Category	Inpatient Days per 1,000 Enrollees	Average Cost per Day	Average Cost per member per month	10% Utilization reduction	20% Utilization reduction
General	150	$1,500	18.75	16.88	15.00
Surgical	125	$1,800	18.75	16.88	15.00
Psychiatric	70	$700	4.08	3.67	3.26
Alcohol/Drug Abuse	38	$500	1.58	1.42	1.26
Maternity	42	$1,500	5.25	4.73	4.20
Total	425	$1,367	48.41	43.57	38.73
Administrative cost			5.37	5.37	5.37
Total PMPM			53.78	48.94	44.10

Answer 1

Service Category	Inpatient Days per 1,000 Enrollees	Average Cost per Day	Average Cost per member per month	10% Utilization reduction	20% Utilization reduction
General	150	$1,500	18.75	16.88	15.00
Surgical	125	$1,800	18.75	16.88	15.00
Psychiatric	70	$700	4.08	3.67	3.26
Alcohol/Drug Abuse	38	$500	1.58	1.42	1.26
Maternity	42	$1,500	5.25	4.73	4.20
Total	425	$1,367	48.41	43.57	38.73
Administrative cost			5.37	5.37	5.37
Total PMPM			53.78	48.94	44.10

Yes, the attempted solution is perfectly correct. Please proceed in the similar way and ensure that you do not make any calculation errors while tabulation.