StudentShare solutions

DRG Patient Classification - Essay Example

Nobody downloaded yet

Extract of sample DRG Patient Classification

Breakeven Analysis Sales variable cost fixed cost Allocation JFC Total FC Breakeven units HR gross margin DRG M 1700 1000 500,000 415000 915,000 1307 2 41.18% DRG J 2600 1200 280,000 249000 529,000 378 5 53.85% DRG P 900 600 110,000 166000 276,000 920 1 33.33% Total 890,000 830000 1,720,000 The company has three different DRG type patients to which the firm provides its health service. The three different types of patients generate various types of revenues streams. The DRG J patients generate \$2600 in treatment cost which is the highest revenue figure among the three types of patients. The DRG J patients also have the highest contribution margin at \$1400, but also the highest profit margin at 53.85%. One of the negative aspects about the treatment of DRG J patients is that it takes company 5 hours to complete a treatment session for these patients. Time consuming patients limit the ability of the clinic to have high patient turnover. Fewer patients are served each month when a clinic has to spend 5 hours in DRG J patients instead of the two hours and one hour its takes to serve DRG M and DRG P type patients. The DRG P patients have the lowest patient charge at \$900. The good aspect of treating the DRG P patients is that the clinic only has to consume one hour of time to serve them. The DRG M patients generate the Beach Street office of Getwell Clinics a profit margin of 41.18%. These types of patient generate an average patient charge of \$1700. The breakeven point in number of treatments varies by DRG type patient. The patients that have the highest breakeven point in terms of number of treatments are the DRG M patients. The reason that the breakeven point for DRG M patients is so high is because the total fixed cost for these patients is \$915,000. The contribution margin for each patient is \$700. The patient type that has the lowest breakeven points is the DRG J patients at 378 treatments. The high contribution margin of \$1400 and the lower total fixed cost are factor that led to the DRG J patients having the lowest breakeven point. The DRG P patients have a contribution margin of \$300 and breakeven point in terms of 920 treatments. Despite having a low contribution margin the DRG P patients had the lowest total fixed cost at \$276,000. `When companies have excess capacity they should use that production opportunity on the service or product that provides the greatest profitability which optimizes the use of the resources of the firm. The DRG patient type that provides the highest profitability for the clinic evidenced by its higher contribution margin and profit margin is the DRG J. An advertising program should target the DRG J patients because the treatment given to these patients generate more revenues than any other DRG patient type. The results generated by an advertising campaign can be measured in terms of how many more patients visited the clinic after the ads are run on television, radio, written press, or on the internet. Due to the fact that each DRG J patients bring to the clinic greater revenues per visit than any other patient these patients must be targeted more aggressively by the firm. Based on the scenario that the clinic is at maximum capacity in terms of hours the firm should concentrate its efforts on completing work orders that can be achieved in the fastest time possible. The DRG patient time that requires the least amount of time to complete a treatment is the ...Show more

Summary

The use of DRG patient classification has helped the Beach Street office of Getwell Clinics isolate patients which created a systematic way to visualize each type of patient as a profit center. The raw data the clinic has includes patient charge, variable costs, fixed cost, hour per treatment, and joint fixed cost…
Author : davinward
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"DRG Patient Classification"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Using health care data for decision making
The chief source of funding for acute inpatients is private insurers and Department of Veteran’s Affairs. Together they pay for close to 90% of all inpatients and their mode of payment is based according to Diagnosis related groups.
5 pages (1250 words) Essay
Grouper software research
A number of vendors are engaged in the design, development, manufacture and maintenance of grouper systems. One of the most prominent systems provided by vendors is the DRG (Diagnosis-related Group) suite that organizes patient cases into any of the 466 classifications configured in it.
2 pages (500 words) Essay
Classification Essay
It is played or sung round the village green and used to accompany ceremonials like harvesting. The art music of the written tradition is too the music of the community, but of a very different kind. It stems from a leisured class or group that has time and learning to write down its music, and to rehearse complex and difficult works.
2 pages (500 words) Essay
Diagnosis Related Groups
468 and DRG No. 469 will be discussed as to when and how each of these DRGs would be used. DRG 468 has been categorized as extensive operating room procedure unrelated to the principal diagnosis. This is one of the DRGs for patients whose medical record abstracts contain clinically atypical or invalid information.
3 pages (750 words) Essay
Classification Essay
ments therefore becomes important when we need to understand how the appeal is being made and therefore understand if the marketing message is effective or not. To fully understand this, there are three prime examples which show what the ethical, pathetic and logical appeals are
3 pages (750 words) Essay
Patient Classification System
This paper explains acuity systems development, Staffing nursing units based on acuity of patients, nursing experience, number of beds on unit, and by staffing models while discussing a few tools presently obtainable. It as well spread
15 pages (3750 words) Essay
Assessment
AMR is a body that comprises of health professionals who have recognized academic settings. It uses very integrated approaches when collecting data on diseases. The body comprises of psychiatrists, psychologists, pharmacists, nutritionists and
3 pages (750 words) Essay
Health Economics 2
It is based on performance and on the quality of health services being rendered by health service providers. On the other hand, the casemix funding system is based on diagnosis-related groups which are
11 pages (2750 words) Essay
Classification essay
Thieves can be classified into three main groups. The first group consists of thieves, who find thrill in the act of theft to make a mockery of existing social norms.
1 pages (250 words) Essay
Grouper Software Research
This grouping helps in performing a number of data-intensive and complex tasks like disease monitoring, cost analysis, utilization
2 pages (500 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic DRG Patient Classification for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
• About StudentShare
• Testimonials
• FAQ
• Blog
• Free Essays
• New Essays
• Essays
• The Newest Essay Topics
Join us:
Contact Us