Financial Resource Management and Healthcare Reimbursement: Financial Management

An essential skill for health and human services professionals is understanding how the financial aspects of healthcare in the United States works. Healthcare professionals need to understand how revenue is generated in order to maintain a healthy revenue cycle. Healthcare professionals must find a balance so they can provide the best while maintaining both profitability for the healthcare organization and affordability for clients.

This task challenges you to apply your knowledge of financial management in the realm of healthcare. You will apply your knowledge of different payment models to two clinics. You will then apply your knowledge of the aspects of revenue cycle management and profitability to those clinics. 

Clinic A offers a wide range of medical services to its clients. There are primary care physicians available for both annual physical examinations and to treat acute medical conditions. There is a facility on site that can analyze blood and other fluid samples. Clients can have X-rays taken and can complete physical therapy all in the same building.

Clinic A reimbursed by insurance providers for each service at the clinic that they provide. For example, the clinic will request individual reimbursements from a client with a broken ankle for seeing a primary care physician, for each x-ray that is taken, for the materials necessary to set and secure the broken ankle, and for each physical therapy visit required for the client to regain full mobility in their ankle. 

– Clinic B 

Clinic B also offers a wide range of medical services to its clients. Clients can receive the same types of care (I.e., physical examinations, acute care, blood analysis, X-ray, and physical therapy) at Clinic B as Clinic A.

Clinic B is reimbursed by insurance providers for each client that is treated based on the type of treatment that is required. For example, the clinic will receive less money for completing care on a client needing treatment for the flu when compared to a client needing treatment for a broken ankle.

A.  Describe the differences between fee-for-service and value-based care and payment models in healthcare.

B.  Explain whether Clinic A and Clinic B uses a fee-for-service or value-based payment model.

Revenue Cycle Management

C.  Both Clinic A and Clinic B experienced a year in which clients required a greater number of X-rays than was projected in order to complete their treatment.

1.  Explain how this increased need for X-rays per client affected the annual budgets for both Clinic A and Clinic B.

2.  Explain how both Clinic A and Clinic B could modify their budgets for the next year to ensure each clinic earns a profit while also being affordable to their clients.

Risk and Return

D.  Clinic A wants to expand its services to also include CT scans for clients.

1.  Describe, in detail, the five risk and return steps Clinic A should follow when determining whether it should begin offering CT scans.

2.  Describe, in detail, the potential risks and returns that Clinic A needs to consider when determining whether to begin offering CT scans.

Factors Affecting Profitability

E.  A third clinic is opening close to Clinic A and Clinic B. This third clinic will only offer primary and acute care for their clients in an effort to keep overhead costs low and offer its services at a lower rate than what Clinic A and B are currently offering.

1.  Describe, in detail, a business model change that either Clinic A or Clinic B can make to compete better with the third clinic.

2.  Explain how the business model change will allow the clinic to compete better with the third clinic.

F.  Acknowledge sources, using in-text citations and references, for content that is quoted, paraphrased, or summarized.
 

G.  Demonstrate professional communication in the content and presentation of your submission.