In this homework you are asked to generate and compare income statements of three hospitals. Hospital Honolulu located in Honolulu Hawaii, Hospital
Vegas located in Vegas Nevada, and hospital Oswego located in Oswego New York.
1. Compute IPPS reimbursement (both operating and capital) for each hospital based on the presented MS-DRGs and discharges. Total reimbursement per
line = Reimbursement per MS-DRG x discharges. As we did in mini-lectures, assume that IME and DSH are zero and that the Large Urban Add-on is 1, for all
hospitals. All hospitals are assumed to have reported quality data and are assumed to be meaningful EHR users. Remember that when the wage index is >1,
the labor share is 69.9% otherwise is 62%.
2. Compute OPPS reimbursement of each hospital based on the presented CPT codes and visits. The labor share OPPS is always 60%. Here the total
reimbursement per line = APC payment x visits
3. Total revenue is the sum of inpatient and outpatient reimbursements.
4. The average expense for inpatient care is estimated to be $6,000 per discharge. The average expense for outpatient care is estimated to be $500 per visit.
5. Total expense is the sum of inpatient and outpatient expenses.
6. Profit = Total revenue – total expense
7. Now construct a simple income statement for each of these hospitals and compare their profit per patient adjusted to wage index, CMI, and SMI. What do
you think?
See attached for data you need for this homework. The data is in a template that you may choose to use for the homework. But you are free to set up the
spreadsheet in your own way. Please submit your homework in Excel file with all your formulas and comments included.