Instruction
Halfpipe Hospital is negotiating a new contract with Rocky Mountain Health Plan. The hospital had 25,000 discharges last year and is on pace to provide the same volume of services this year;
You have an average length of stay of 4.25 days per discharge;
Your actual costs to provide care (what you spend for salary, medicines, supplies and other items) average 80% of charges;
RMHP represents 20% of your total discharges;
There is an average charge of $20,000 per discharge, for which your current contract requires you to give a 15% discount off of charges.
Calculate net revenue from RMHP for Halfpipe
You have been offered a per diem of $5,000 or a per discharge of $19,000. Which is better?
At the last minute you see that LOS has decreased to 3.75 days. Does your answer change?