Discussion Wk 4 IT Kathy.docx - Discussion Cost Savings and Revenue Enhancement This Discussion offers you the opportunity to apply return on

Discussion Wk 4 IT Kathy.docx - Discussion Cost Savings and...

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Discussion: Cost Savings and RevenueEnhancementThis Discussion offers you the opportunity to apply return on investment (ROI) concepts in a real case scenario. As is often the case, technology offerings involve costs that must be justified by virtue of expense reductions for revenue increases in the organization. There are creative opportunities in the Discussion for leaders to facilitate the development of the revenues into the organization and operational changes that reduce expenses.Scenario:Dynamic Health System is a 3-hospital, 500-bed system in the Midwest United States. This system employs 100 physicians, both primary care and specialists, in 12 physician practices. Dynamic also runs a center of excellence in orthopedic care for the large geriatric population in the area, including an outpatient rehabilitation facility that is currently profitable. Dynamic offers a full spectrum of medical and surgical services to their population with an emphasis on programs of excellence in orthopedic surgery, diabetes, and women’s care.Dynamic’s typical patient mix is over 45% Medicare with another 35% private pay patients covered by three large insurance companies. Their Medicaid population is approximately 12%, with the reminder of patients self-pay.Due to market forces, the three private payers have begun to implement a program of bundled payments for their members in the following areas: hip replacements, knee replacements, and lower back surgeries. In these models, Dynamic hospitals and employed physicians will be paid a fixed amount for an entire episode of care from pre- surgery evaluation, through surgery and post-surgery, physical therapy, and rehabilitation. Medicare is

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