THE CRIMSON GROUP, INC.
CONSULTING AND LEADERSHIP TRAINING IN HEALTH CARE
Home Programs Faculty Research Curriculum Center Public Resources My Account
Member Sign In
Shopping Cart  
My Account
My E-Packets
Browse Bibliography:
By Keywords:
 

By Type:
New/Updated Items
Popular Items
Cases
Background Notes
Primers and Books

By Functional Area:
Finance/Financial Management
Financial Accounting
Financial Analysis and Management
General Management
Management Accounting
Management Control Systems
Marketing
Operations Management
Organizational Behavior

By Setting:
Developing Country
For Profit
Health Policy
Healthcare Management
Nonprofit
Nonprofit Organization Management
Public Sector Management

Curriculum Center Browse Bibliography Build EPacket Pricing Structure Distribution Process Management Control in Nonprofit Organizations
 
South Brookfield Hospital
Author(s):
Kane, Nancy M.
Young, David W.
Functional Area(s):
   Management Control Systems
Setting(s):
   Healthcare Management
Difficulty Level: Intermediate
Pages: 7
Teaching Note: Available. 
Copyright Clearance Fee:  $9.00  Sign in to find out if you are eligible for an Academic Price of $5.00 
Add Item to a new E-Packet

Add To Cart

Order an Free Inspection Copy

Back to Bibliography
First Page and the Assignment Questions:
In developing this merged file, we encountered a variety of problems with data definitions, consistency, and precision. But the committee put a great deal of time and effort into solving these problems, and when the first merged tape was run it was more than 99% successful, there being only 80 mismatched records out of approximately 9,000. I therefore feel confident about the internal consistency of the data across the billing and medical record information.

Megan Charles looked across her desk at the resulting pile of reports lying on the table. As Director of Systems Support at South Brookfield Hospital (SBH), she had overseen the task of merging patient diagnostic information with corresponding billing data. This information had then been classified into Diagnosis-Related Groups (DRGs), allowing the hospital to see for the first time the charges associated with each type of case it treated. She continued:

The original impetus for this effort came from the Planning Department with support from the hospital’s medical director, but now I’m not so sure of the planning and management utility of the data. In spite of my best efforts to publicize the reports, which included teaching other administrators what type of information they contained and how it might be used, the reports are still sitting in my office, gathering dust. The stack of reports is about seven inches thick and weighs some 15 pounds.

Ms. Charles had two sets of reports at this point. One set, from a statewide data consortium, was based on case mix information only and provided 1990 information on the number, distribution, and average lengths of stay (ALOS) for each DRG; these figures were provided for SBH as well as its “group,” 1 and included statewide averages. The second set, from a software vendor, included both case mix and financial information from 1990 in a detailed series of reports on SBH only.

As Ms. Charles wondered again how she could get people interested in using the thick stack of reports, an idea occurred to her. The Pediatrics Department had recently been pinpointed as an area of general management concern to the hospital. Pediatric admissions had declined over the past few years, reflecting a decline in the pediatric population of the community. Lengths of stay (LOS), on the other hand, had increased over the same period. Unless the types of cases treated in the hospital had changed in some way to account for the longer LOS, it might be that pediatric cases were being over-treated, a situation with potentially negative financial implications to the hospital.

The likelihood of financial difficulties had been exacerbated in the past few years with the growth of managed care plans in the state. These plans were contracting with selected hospitals, based largely on cost considerations. While a hospital would be allowed to keep all . . .

Assignment

  1. Which pediatric DRGs are financial “winners” for the hospital? Which are financial losers? Why? How might this information assist the hospital in making strategic planning decisions?
  2. How might information on physician practice patterns affect the hospitals strategic planning decisions?
  3. Mr. James, the VP for Planning, has just discovered that the ENT specialist on the medical staff has applied for privileges at another hospital. How might the potential loss of business affect occupancy in the Pediatric Ward? Is this loss good or bad?
  4. What is your assessment of the ways costs have been calculated? What would happen to costs if there were a change in South Brookfield's case mix?

1 Based on hospitals that are similar with respect to bed size, location, teaching status, and other measurable characteristics believed to influence costs.