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    Medical Procedure Baseline Cost Analysis

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    Fundamentality, it is important to understand our internal cost structure prior to approaching the task of contracting for service lines. Payers provide a reimbursement amount for the cost of your services.
    The goal is to demonstrate that one understands the cost you incur to provide a specific service. While cost is often driven by competitive benchmarks in the industry, it is also important to determine how you compare with the market place and to determine if your cost is competitive and sustainable.

    1. Establish the baseline cost for a service line in your health care institution (e.g. Hip Replacement Surgery, Cardiac Disease/Surgery). The baseline cost sheet should include a breakdown of the factors and figures involved (facility cost, equipment, etc.).

    2. What are the future and current risk associated with the costs presented on the sheet?

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    Solution Preview

    There are some issues to consider in answering these questions. Firstly and most obviously, you have to consider what service to establish a baseline cost for, and the institution that is subject to your focus. Different services will incur different costs, but the most obvious and common ones you've listed there include:

    Facility cost - how much does operating the procedure room cost? This includes the cost of basic operation staff for that facility, and basic material costs for operating that facility. For example, operating one of the ORs at the hospital I work at means at least 1 scrub nurse and 1 OR tech, as well as the utilities of operating the lights and air conditioning. It also includes the basic sterile trays with tools for basic general surgery (which incurs a cost of its own for the ...

    Solution Summary

    This solution of 531 words provides a brief discussion on the variables to consider when building baseline cost sheets for medical procedures, and the current/future risks associated with these costs.