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Respond to the question responses with 200 word responses.
How will the four forces that are likely to affect healthcare costs during the next 5 to 10 years make a difference to costs for a 500-bed hospital with a level-4 trauma center?
The four forces that are likely to affect healthcare costs during the next 5-10 years will influence changes in costs for a 500-bed hospital with a level 4 trauma center by costing more money. The technology will expand as will the requirements to keep the technology up to date, the rate of inflation will likely continue to rise adding to costs, environmental factors (such as pollution and weather changes) will likely negatively impact patients and make the cost of treatment expand. Short staffing will also become an issue for healthcare systems as they are currently working with short staffing which in turn will impact patient care and patient outcomes.
How can physician leaders become involved in cost control? Provide two examples.
Physician leaders become involved in cost control by utilizing machines that will prove to be financially worth the cost as time progresses. In the Lakeside case study, in the end the renal machines were worthless and couldn’t even be used as scrap machinery and had no resale value. Physicians working with vendors and manufacturers of machines to be used in patient care can determine what to spend the most money on that will return the benefit over years. Physicians can also ensure that the machinery purchased is retrofitted in the even that the healthcare system cannot purchase brand new state of the art equipment and software, sometimes the money that isn’t spent is more valuable than the cost.
What is the difference between a cost object’s direct cost and its full cost? Provide an example in a healthcare organization context. Be specific about the type of healthcare organization that you are referring to (e.g., hospital, clinic, a department within a hospital and so on).
The difference between a cost object’s direct cost and its full cost is that direct cost is the margin of contribution for each product and full cost is the combination of both variable and fixed costs to products (2023).
Identify and discuss three points that must be considered when using the step-down method of cost allocation in a healthcare organization. (e.g., hospital, clinic, a department within a hospital, and so on).
Three points that must be considered when using the step-down method of cost allocation in a healthcare organization are shared resources and support between departments that will benefit multiple departments in one organization and their interdependent relationship, each dept will have a more accurate assessment of their own indirect and direct costs and they’ll be able to see where costs can be saved or expanded to benefit the many departments that share resources and support, and the ability to make better decisions in regards to resources and cost is the final point of using the step down method of cost allocation.
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