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Your hospital has been approached by a major HMO to perform all their MS-DRG 470

ID: 2626232 • Letter: Y

Question

Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases
(major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed
your charges for MS-DRG 470 during the last year and found the following profile:

Average Charge $15,000
Average LOS 5 Days
Cost/Charge Variable Cost %
Routine Charge $3,600 0.80 60
Operating Room 2,657 0.80 80
Anesthesiology 293 0.80 80
Lab 1,035 0.70 30
Radiology 345 0.75 50
Medical Supplies 4,524 0.50 90
Pharmacy 1,230 0.50 90
Other Ancillary 1,316 0.80 60
Total Ancillary $11,400 0.75 50

1. In the above data set, assume that the hospital

Explanation / Answer

how did you calculate this pelase?