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You are the administrator of a clinic. Assume you perform a TDABC analysis on your institutions 3000 patients with a certain level of significant renal (kidney) failure. These patients on average are seen quarterly in the renal clinic and on average need to be hospitalized twice a year. You run a pilot study to evaluate the effect of seeing a subset of patients monthly and begin a telemedicine program. You determine the following costs from your TDABC analysis: Average hospitalization cost = $40,000 Average long (standard) clinic visit cost = $300 Average short clinic visit cost = $200 Telemedicine check cost = $20 Your data shows that patients seen quarterly for clinic visits are hospitalized twice per year on average, while those seen monthly are only hospitalized once. Your data further shows that patients who receive four short telemedicine checks a month only need short clinic visits. a. You are interested in reducing the cost of care of your renal failure patients. How would the total cost of care change for your 3000 renal patients if you moved all patients to monthly visits and telemedicine checks? Putting aside cost, do you think quality would improve? If so, in what ways? How would you measure any quality change? b. What if a $1O per month monitoring device with daily data uploads, twice a month telemedicine checks, and quarterly short clinic visits also reduced hospitalizations from two to one per year. Now what would be the total cost of care for your 3000 patients?

You are the administrator of a clinic. Assume you perform a TDABC analysis on your institutions 3000 patients with a certain level of significant renal (kidney) failure. These patients on average are seen quarterly in the renal clinic and on average need to be hospitalized twice a year. You run a pilot study to evaluate the effect of seeing a subset of patients monthly and begin a telemedicine program. You determine the following costs from your TDABC analysis: Average hospitalization cost = $40,000 Average long (standard) clinic visit cost = $300 Average short clinic visit cost = $200 Telemedicine check cost = $20 Your data shows that patients seen quarterly for clinic visits are hospitalized twice per year on average, while those seen monthly are only hospitalized once. Your data further shows that patients who receive four short telemedicine checks a month only need short clinic visits. a. You are interested in reducing the cost of care of your renal failure patients. How would the total cost of care change for your 3000 renal patients if you moved all patients to monthly visits and telemedicine checks? Putting aside cost, do you think quality would improve? If so, in what ways? How would you measure any quality change? b. What if a $1O per month monitoring device with daily data uploads, twice a month telemedicine checks, and quarterly short clinic visits also reduced hospitalizations from two to one per year. Now what would be the total cost of care for your 3000 patients?

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 36E
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You are the administrator of a clinic. Assume you perform a TDABC analysis on your institutions 3000 patients with a certain level of significant renal (kidney) failure. These patients on average are seen quarterly in the renal clinic and on average need to be hospitalized twice a year. You run a pilot study to evaluate the effect of seeing a subset of patients monthly and begin a telemedicine program. You determine the following costs from your TDABC analysis: Average hospitalization cost = $40,000 Average long (standard) clinic visit cost = $300 Average short clinic visit cost = $200 Telemedicine check cost = $20 Your data shows that patients seen quarterly for clinic visits are hospitalized twice per year on average, while those seen monthly are only hospitalized once. Your data further shows that patients who receive four short telemedicine checks a month only need short clinic visits. a. You are interested in reducing the cost of care of your renal failure patients. How would the total cost of care change for your 3000 renal patients if you moved all patients to monthly visits and telemedicine checks? Putting aside cost, do you think quality would improve? If so, in what ways? How would you measure any quality change? b. What if a $10 per month monitoring device with daily data uploads, twice a month telemedicine checks, and quarterly short clinic visits also reduced hospitalizations from two to one per year. Now what would be the total cost of care for your 3000 patients?
Transcribed Image Text:You are the administrator of a clinic. Assume you perform a TDABC analysis on your institutions 3000 patients with a certain level of significant renal (kidney) failure. These patients on average are seen quarterly in the renal clinic and on average need to be hospitalized twice a year. You run a pilot study to evaluate the effect of seeing a subset of patients monthly and begin a telemedicine program. You determine the following costs from your TDABC analysis: Average hospitalization cost = $40,000 Average long (standard) clinic visit cost = $300 Average short clinic visit cost = $200 Telemedicine check cost = $20 Your data shows that patients seen quarterly for clinic visits are hospitalized twice per year on average, while those seen monthly are only hospitalized once. Your data further shows that patients who receive four short telemedicine checks a month only need short clinic visits. a. You are interested in reducing the cost of care of your renal failure patients. How would the total cost of care change for your 3000 renal patients if you moved all patients to monthly visits and telemedicine checks? Putting aside cost, do you think quality would improve? If so, in what ways? How would you measure any quality change? b. What if a $10 per month monitoring device with daily data uploads, twice a month telemedicine checks, and quarterly short clinic visits also reduced hospitalizations from two to one per year. Now what would be the total cost of care for your 3000 patients?
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