Case Study Of Dialysis Therapy

After twenty years the true allocation facility cost for the Dialysis Center should be zero, since the facility would be paid off and should have only minimal allocating facility costs such as opportunity costs and costs of using the center. If after the twenty years the building is not occupied it can be used from other medical centers or it could be rented out or sold. It is difficult to try to determine the opportunity costs for space occupied by all activities. The current system of facility allocation assigns equal opportunity cost across all activities and services and avoids the problem inherited in the new method.

Because of the large amount of money associated with running this service line, the issue of payment will affect it very intensely. With the cardiac cath labs expected to cost $4,500,000 and the cardiac rehab expansion to be $500,000, the upfront expense will already cut into the bottom line. The service line will need to not only address education of the community, access into the system, preventive medicine and the latest technology, but it will need to be done as efficiently as possible. Moving patients through the system as quickly and efficiently as possible is also cost effective.

Patients who use peritoneal dialysis change their own cleansing solutions at home, usually about six times per day. This procedure can be done manually when active or automatically by machine when sleeping. However, the patient’s overall condition, as well as the positioning of the catheter, must be monitored regularly by nurses and technicians at the Dialysis Center (Gapenski, pg. 27-28). The Outpatient Clinic currently takes up 80 percent of the space it shares with the Dialysis Center. The recent growth in volume has created a need of 25 percent more space for the Clinic. Its large size compared to the Dialysis Center and its patients frequent use of other departments in the hospital are justifications as to why it was decided to move the Dialysis Center to another building. Big Bend Medical Center currently doesn’t have adequate space to house the Dialysis Center, so it was also decided to build a new 20,000-square-foot building. This expansion and move were went to benefit both departments and help increase patient volume. The goal of increased patient volume is expected, but the directors and other department heads did not agree with the new allocation of indirect costs. In the past, facilities costs were aggregated, so all departments were charged cost based on the average embedded cost regardless of actual age of the space occupied. Since many department heads considered this

The percent change in spending for heart disease was attributed to a 68.6% increase in cost per treated case and a 30.3% increase in the population treated. Heart disease spending was the largest among 15 medical conditions experiencing the largest rise in spending. Interestingly, the rise in cost per treated hypertension case accounted for 60% of the overall growth in spending for hypertension compared with a 19% rise in treated prevalence of the disease. This was attributed to the emergence of new and more costly antihypertensive drugs. In contrast, 50% of the rise in health care spending for diabetes was a result of a rise in treated prevalence and only 24% was attributed to an increased cost per treated case. The total spending for diabetes increased from $8.6 billion in 1987 to $18.28 billion in 2000. Spending for diabetes will surely rise exponentially in the next 10 years because of the continued increase in prevalence of the population being treated and an increased cost per case as new diabetic drugs enter the pharmacologic armamentarium. The spending for diabetes and the spending for heart disease are obviously intertwined.

A number of companies have entered the field of providing dialysis, where they compete with non-profit providers. This brings us to one of the most important strengths of RAI as a company: Its clients have rated it very highly as being able to blend the efficiency that they have come to expect of a company operating in a competitive market with the individual care and compassion of a non-profit health provider.

Under the current indirect cost allocation scheme (Exhibit 1) the Dialysis Center’s Revenues and Direct Costs are as follows: total revenue is $2,700,000, direct expenses are $2,100,000, the contribution margin is $600,000, and their percent of revenues is 22.2%. Their indirect costs are as follows: facilities cost is $300,000, general overhead is $270,000, and total overhead is $570,000. This leaves the Dialysis Center with $30,000 in net profit and 1.1% in percent of revenues. Additionally, square footage is allocated at $15.00 per square foot on an aggregated basis. Lastly, their general overhead costs are set at 10% of their total revenues.

Medicare is the nation’s largest health insurance program. Generally, you are eligible for Medicare if you or your spouse worked for at least ten years in Medicare-covered employment and you are 65 years old and a citizen or permanent resident of the United States. Medicare-covered services include hospital insurance, inpatient hospital care, skilled nursing facility care, home health care, hospice care, and medical insurance (Medicare U.S.) With such an encompassing effect on the health insurance field, Medicare provides a haven for older individuals, and end-stage renal disease (ESRD) patients who require the best medical care for whatever possible reason. The only problem with this scenario is

Speech – Language Pathology (SLP) Services. Medicare will cover up to $1,980 after you have paid your $183 Medicare deductible. Medicare will pay up to 80% of the approved amount while your secondary will pay the rest (for most members that is GHI). Keep in mind that the $1,980 (known as the therapy cap) covers both Physical Therapy and SLP. So, if you use the entire amount for SLP, then you will have nothing left for Physical Therapy.

Healthcare spending growth rate trends show astounding estimates. Since 1960, spending has risen from $27 billion ($143 per capita, 5.1% pf GDP) to amazing $1,678.9 billion ($5,670 per capita, 15.3% of GDP, 2003 data) (HHS, 2005). Recent research estimated that by 2013, healthcare spending will be as high as 18.4% of the Growth Domestic Product. It is important to note that the gradual move from hospital to ambulatory setting has resulted in much higher spending on outpatient hospital services and prescription drugs. The spending growth for these two trends is much higher than the overall healthcare cost growth, which, in fact, increases faster than such important economic indicators as GDP growth, inflation growth, and population growth rates.

The cost of care has been a growing problem throughout developed nations during the last 15 years. For example, across 34 nations that make up the Organization for Economic Cooperation and Development (OECD), the average per capita health care expenditure increased by more than 70 percent between 2000 and 2010. However, the biggest spenders — such as

DaVita Dialysis Center was founded in 1999, with the goal to develop programs to enrich lives. It was originally called Total Renal Care (TRC), but during its restructure it was renamed with the term, DaVita, Italian for “giving life.” CEO, Kent Thiry saved the company from the brink of bankruptcy through his leadership style. The corporate headquarters were originally in El Segundo, California, but were moved to Denver, Colorado. Today, it has grown to be an organization with over 53,000 teammates around the nation. The company has expanded to 2,251 outpatient dialysis centers in the United States and 118 outpatient dialysis centers in 10 foreign countries. It treats patients with acute kidney failure, chronic kidney failure, and end stage renal disease. The company’s core values are accountability, continuous improvement, fulfillment, fun, integrity, service excellence, and team. The core values are integrated in the organization’s vision for leadership to stress collaboration and a team-based environment. Teammates feel an emotional level of trust and mutual commitment.

Epic is not an inexpensive system to obtain. The decision for Kaiser Permanente to make the major system change came with a hefty price tag of $4 Billion dollars. With Kaiser having a footprint of more than 200 hospitals, it can be estimated that each facility spent about $20 Million for the system. Even with Kaiser doing a comparative cost study between Epic and rival Cerner, “doctors and nurses voted overwhelmingly for Epic.” Sutter healthcare system acquired Epic for 5 of their largest facilities spending over 500 million. Duke University Healthcare system spent over $700 Million, Partners Healthcare, based out of Boston, spent the nearly the same amount as Duke Healthcare system. The University of California, San Francisco, shelled out over $150 million. Given the aforementioned examples it is clear to see that Epic comes with a steep price tag.

Medicare: Medicare, the primary insurer, increased its reimbursement levels, extending full coverage for lightweight standard models to $850, up from the old $650 coverage for standard models. This made the space more attractive.

According to the Centers for Disease Control and Prevention (CDC) 2010, 10% of adults in the United States have chronic kidney disease (CKD). That is estimated at about 20 million people. People with CKD may not feel any symptoms in the early stages, so treatment most likely has not been started. When a person often finds out they are in need of treatment, they may already be in kidney failure or end stage renal disease (ESRD). This paper will discuss the reimbursement mechanisms presented in the Sullivan article, the economics of providing ESRD treatment from the organization's point of view, patients options and potential trade-offs related to cost, quality, and access to

The physician may adjust the hemodialysis intensity and frequency based on the test results. These labs are crucial and must be checked monthly while being on dialysis.