​Healthcare Operations Management Discussion – Wk 4

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Question Description

Healthcare Operations Management Discussion – Wk 4

"Healthcare Cost and Quality" Please respond to the following:

  • Read the case study titled “High Quality Healthcare: A Case of Cost and Quality,”. Next, devise a plan to assess the current challenges facing the hospital. Recommend a sequence for improvement (i.e., testing, implementing, and diffusing). Speculate on the significant ways that collaboration and the creation of synergies among various stakeholders will improve reimbursement and positively impact the hospital’s financial position.
    • Case Study Attached

***This is a discussion, NOT a paper. Need 2 strong paragraphs and references.***

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Case Study: High Quality Healthcare: A Case of Cost and Quality You are the CEO of a 200-bed community hospital and have heard that Medicare hospital payments will continue to be trimmed for patients who experience harms considered to be largely preventable, such as blood clots, surgical infections, ventilator-associated pneumonias, and others. You want to make sure that your hospital prevents all possible avoidable harms to patients. Your assistant summarizes the issues for you: denied payments focus exclusively on additional care required to treat the injury (e.g., when a second procedure is required to retrieve a surgical instrument). To date, the denied payments are for hospital care only, but some analysts have recommended that the same policy be applied to physician payments. One measure your hospital already has taken is to require that all workers who interact with patients wash their hands, in order to prevent hospital-acquired infections. Although this would seem a simple and obvious initiative, it has met with limited success. In response to additional queries, you learn that the hospital’s patient safety department does not track the kinds of events for which it may be financially penalized. You also learn that the Affordable Care Act will affect hospital payment in another way: trimming reimbursements for potentially avoidable hospital readmissions. Your hospital serves an older population and many patients currently have multiple admissions for acute exacerbations of chronic illnesses, such as congestive heart failure and diabetes. In the future, these multiple admissions may be very costly. Your hospital’s margin last year was razor thin; the combination of the economic downturn and any decreased reimbursements could result in closure. Kovner, A. & Knickman, J. (2011). Health Care Delivery in the United States. 10th Edition. New York: Springer Publishing. . P. 254 ...
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School: Carnegie Mellon University

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Report: A Case of Cost and Quality in Health Care

A Case of Cost and Quality in Health
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Report: A Case of Cost and Quality in Health Care

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Running Head: DISCUSSION


Discussion: A Case of Cost and Quality in Healthcare
Student’s Name


Discussion: A Case of Cost and Quality in Healthcare
Challenges faced by community hospitals

In healthcare, the cost of quality is the sum of all costs incurred by the healthcare
facilities to maintain applicable standards. Maintaining acceptable standards within a healthcare
facility is quite an expensive ordeal yet so crucial. Hospitals face increasing challenges as
reimbursements fall, regulations become more complicated, and payers demand closer
collaboration with physicians and other outpatient providers. These hospitals continue to join
larger organizations forming healthcare systems. All this is in an attempt to improve quality
service delivery at the same time maintaining minimum cost. Having reviewed the case; ‘ HighQuality Health Care; A case of Cost and Quality,' we are going to discuss challenges facing the
Hospitals, sequence for improvement and the importance of collaboration of synergies among
various stakeholders.
To better understand the concept of cost of quality in healthcare, we begin by looking at
the challenges the healthcare sector faces as a result of the loss of quality. Most community
hospitals apply a low discount on supplies. Compared to other hospital systems with high
volume, the community hospital gets worse deals of all. With this problem, the cost of medical
supplies goes up faster than reimbursement. In the end, these hospital facilities lack space on
getting high prices on supplies, drugs, and devices, leading to fewer finances to be allocated
elsewhere for better-improved quality healthcare. The optimal allocation of these resources is a
result of the high cost of quality.
Secondly, Lack of economies of scale which for community hospitals find purchase price
of drugs more expensive. In essence, the total cost of purchasing drugs for community hospitals
is higher than a big established hospital. Higher costs translate to difficulty in attaining efficiency



within the healthcare facility. For a healthcare system to perform well, it must have quite a good
number of group of physician personnel meaning that for quality healthcare to be attained, a
healthcare facility has to have a high number of physicians. A high number of physician
translates to a high cost of quality. For instance, a hospital with three physicians is less efficient
than a hospital with seven physicians. Therefore the lack of economies of scale leads to poor
quality in healthcare (Ong, 2014).
Increase in compliance cost has proven to be another major problem of community
hospitals. Regulations such as recovery audit contractor and HIPAA is costly to these hospitals.
These compliance procedures increase the administrative costs beco...

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