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Assignment: Supply of Primary Care Workforce Note: The Instructor will post the document for this Assignment by Day 1 of Week 4. To deliver health care services, an ACO needs to create a competent...

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Assignment: Supply of Primary Care Workforce

Note:The Instructor will post the document for this Assignment by Day 1 of Week 4.

To deliver health care services, an ACO needs to create a competent workforce that can provide health care to the patients that are in the ACO. Some integrated ACO entities already have employed physicians and mid-level providers that receive salaries from the organization, whereas other non-integrated ACO entities need to invest in external relationships with independent physicians and other providers. Since ACOs do not have managerial control over non-employed providers, additional controls and incentives may be necessary to ensure that efficiency is maximized. ACOs also need to consider the number and mix of specialists (e.g., family practice vs internal medicine) and mid-level providers (e.g., physician assistants and nurse practitioners) in delivering primary care services that can promote value. Maximizing value requires appropriate workforce decisions on supply and incentives to encourage providers to minimize costs. For this Assignment, examine the Week 4 Assignment document and consider the efficiency in the supply of health services.

To prepare for this Assignment:

Review the scenario and Week 4 Assignment document provided to you by the Instructor. Based on the financial data, conduct a financial projection (revenues, expenses, and profit) that analyzes the efficiency of the supply of health services.

The Assignment:

In a 2- to 3-page Word document that includes tables and/or calculations, make recommendations on the following: 1) number of physicians and nurse practitioners needed; 2) reimbursement method: salary or fee-for-service; 3) recommendations for financial incentives to address the challenges of supplier-induced demand and how to ensure efficiency. Interpret the net profit from the ACO contract based on your recommendations. Explain the rationale behind your recommendations, including the impact made by your financial calculations.

I don’t know if u will need this Scenario

Scenario:

Medicare and private payers have expanded reimbursement under Accountable care organizations (ACO). You are the chief financial officer (CFO) of a hospital system that is forming an ACO to participate in these payment models. The ACO seeks to improve care coordination for its patients with chronic conditions. To provide better care management, the ACO is interested in investing in primary care physicians and physician’s assistants to provide more intensive care management services. After formation, the ACO will enter contracts with Medicare and private insurers under alternative payment models, including shared savings, bundled payments, and global capitation. The ACO will need to determine how to set up reimbursement payments to ACO providers and consider whether financial incentives are required to ensure ACO providers deliver efficient care.

Answered Same Day Jun 15, 2020

Solution

Shikha answered on Jun 16 2020
142 Votes
ACO – Financial Projection and Recommendation
In order to project the financial status for ACO, let us first calculate and derive the projected revenue and expenses
1. Revenue Projection
In the previous year, there were 4882 visits in the Diabetes treatment center, which is expected to increase by 5%, at the constant rate of $450 per visit.
    Projected increase in the visits
    5126
    Total Revenue at $450
    $2306745
    Less: Contractual discount for insurance at 30%
    ($692023.5)
    Net Revenue
    $1614722
(Table 1.1 – Projection of Net revenue)
2. Salary and Benefits Projection for the consecutive yea
Salary is expected to increase by 3% in the coming year. A Below table thus shows the projected increased salary for the next year.
    Position
    Salary (3% increase)
    Benefits (25% of salary)
    FFS
(per visit)
    Physician
    $206000
    $51500
    $40
    Nurse Practitioners
    $87550
    $21887.5
    $20
    Nurse
    $61800
    $15450
    NA
    Dialysis Technician
    $46350
    $11587.5
    NA
    Assistant / Receptionist
    $30900
    $7725
    NA
(Table 2.1 – Salary and Project Projection)
3. Expense Projection
Project construction cost is a onetime expense hence it is not considered in forecasting for the next year. It is assumed that depreciation would remain constant throughout. Other parts of expenses are marked up by 3% as suggested in the below table.
    Cost
    Existing
    Projected
    Utilities
    $208750
    $215013
    Repair / Maintenance
    $40500
    $41715
    Housekeeping
    $20000
    $20600
    Telephone Service
    $16806
    $17310
    Depreciation (considering depreciation remains same every year)
    $32000
    $32000
    Malpractice
    $50000
    $51500
    Miscellaneous
    $20000
    $20600
    Medical Supply Costs
    $65767
    $67740
    Other Non-personal...
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