Geisinger Health Plan has asked your hospital to provide all of its obstetric services. It has offered to pay your hospital $2,000 for a normal l delivery (DRG 373), without complications. You have reviewed the standard treatment protocol for this product line and discovered that your hospitals cost is $2,400. What should you do?
To make an informed decision, you need to compare the offered payment of $2,000 with the hospital's cost of $2,400 for a normal l delivery (DRG 373). Here are the steps to consider:
1. Calculate the difference:
Payment received - Hospital cost = $2,000 - $2,400 = -$400
2. Determine the financial impact:
Since the calculated difference is negative (-$400), it indicates that the hospital would be losing money for each delivery under this arrangement.
3. Analyze the overall situation:
Considering that the hospital should aim for financial sustainability and not operate at a consistent loss, several options can be explored:
a. Negotiate: Discuss the payment terms with Geisinger Health Plan, explaining the hospital's costs and any other potential factors that may affect the payment agreement. This may involve requesting a higher payment to cover the hospital's expenses adequately.
b. Assess additional revenue opportunities: Look for potential revenue streams or cost-saving measures within the obstetric services to offset the loss or improve profitability. This could involve identifying areas for cost reduction or revenue enhancement within the services offered.
c. Explore alternative partnerships or agreements: If negotiations with Geisinger Health Plan do not yield satisfactory results, consider reaching out to other health plans, insurers, or organizations that may be willing to provide more favorable reimbursement arrangements for obstetric services.
d. Evaluate the importance of the partnership: Assess the strategic value of the partnership with Geisinger Health Plan. If this partnership is crucial for future collaboration or market presence, it may be worth considering alternative strategies to make the arrangement financially viable.
4. Consult with relevant stakeholders: Engage with hospital administrators, financial experts, and other key decision-makers to evaluate the potential impact on the hospital's overall financial health and consider their insights or perspectives.
In summary, based on the provided information, the hospital should carefully evaluate the financial implications and consider negotiating with Geisinger Health Plan, exploring additional revenue opportunities, and assessing the importance of the partnership before making a decision.