Report to the Board
of Directors Someville General Hospital
For the past six months, I
have been analyzing the length of patient stays at our hospital, and the net
financial losses and gains they produce for the hospital.
The insurance
company's capped payment level is $4,861. When we deduct the $1,389 fixed
cost of a bed, the hospital can receive a maximum net gain of $3,472.
Our
goal is twofold. We want to keep patient stays at a minimum while earning
the highest gains from the insurance fees up to the maximum $3,472.
In
the months of January and April, when the average length of stay was four
days, the hospital gained $695 after expenses for the beds that were deducted
from the insurance fee cap.
In the month of March the average patient
stay was five days. This generated a net gain of $750.
The complete
data list is as follows:
| Patient days | | Net loss or gain to hospital |
| January 4 | $695 |
| February 3 | $550 |
| March 5 | $750 |
| April 4 | $695 |
| May 3.5 | $600 |
| June 3 | $550 |
This data indicates that the hospital's net gain is greatest when
patient stays are five days, on average. No data was available to indicate
the gains that would be achieved with even longer stays.
As a result
of these findings, I conclude that the hospital is able to make the most money
when a patient occupies a bed for five days. I recommend that the hospital
now look into the patient recovery issues and revenue levels of longer-duration
stays.
"I seldom get to sit at my desk.
More than 90 percent of my day is meeting with people to develop programs,
communications and other services," says Fran Hanckel, chief operating officer
at a medical center.