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Case Study 2.1

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You work in an Emergency Department (ED) that sees 6,000 patients a month. Patients are charged at least $200.00 per visit plus charges for tests and medications. Thus, these 6,000 patients can generate $1,200,000 in gross revenue for the hospital. Consider that there are 15 RNs making $30.00 hr and 6 MDs, making $150.00 hr working each shift. Salaries for the RNs total $324,000. Salaries for the MDs total $648,000. The total salary for these two groups is $972,000. Of the 6,000 patients, 50% have Medicare/Medicaid, 45% are covered by managed care or insurance, and 5% have no insurance. Thus, just 95% of patients can pay their bills. The other 5% of patient's bills are written off by the hospital as bad debt.

Medicare/Medicaid/Managed Care/Insurance companies often pay only 55% of the bills for these patients. They may deny payment for 45% of the bills. Thus, for the $1,140,000 billed (95% of $1,200,000), the hospital will receive approximately $627,000 (55% of the $1,140,000 billed). Approximately $513,000 of the bill will not be paid by Medicare/Medicaid/Managed Care/Insurance. Consider the following:

What other expenses besides salary must the hospital pay out of the $627,000 that it receives? Consider hospital space, liability insurance, technology costs, and so on.

Notice the effect that increasing the volume of patients has on your budget figures. What happens to your budget if the patient volume goes to 8,000 patient ED visits per month and staffing stays the same?

Are patients receiving useful information about future illness prevention and healthy living practices in the ED?

Is this a cost‐effective way to deliver health care?

How could we better serve the health care needs of Americans?

Primary care clinicians, which primarily include both medical and nursing practitioners, can be a patient's greatest asset in negotiating the health care system and improving patient outcomes. It is through understanding the patient's past and present that future health care needs can be anticipated. Primary care interventions, such as health promotion and timely preventive care and medication administration, can reduce the need for hospitalizations, improve the health of patients, and avert adverse morbidity and mortality outcomes. Patients and their families can communicate with clinicians to understand their health care needs, how to achieve the best possible health, and how to partner with clinicians to improve decision making. This is what patient‐centered care is based on, both primary care and patient decision making. The World Health Report (2008b), Primary Health Care: Now More than Ever, underscores the need for primary health care. The report cites a disproportionate focus on specialist hospital care, fragmentation of health systems, and the proliferation of unregulated commercial care. The WHO (2010b) has also identified key elements in improving health status through primary care strategies aimed at reducing disparities through universal access, enhancing coordination and delivery of care, and increasing stakeholder participation at multiple levels.

Kelly Vana's Nursing Leadership and Management

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