Business Plan For Rural Urgent Assessment Answer

Answer:

The market of health care providers perceive a number of goals. There is an existence of competition, as identified by several theories, in the health care industry and these have different impact on services. A substantial value of concentration and integration has already taken place in market of health care, and there will likely be a continuity of this trend (Leahy, 2013). This is specific as providers of health care have been responding to provisions under the Act of Affordable Care along with other factors encouraging integration. The industry has been representing 10.4 per cent in the Portfolio of APM and 12.4 per cent under S & P 500. On the whole, this sector holds the value of 2.197 trillion dollars (Korunka, 2015). The industry can be categorized as follows:

For further analysis, Porter’s five forces analysis will be conducted.

Porter’ Five Forces Analysis

Threat of competition: There is vigorous competition across the health care providers of USA, in terms of price, quality and diversity of service. There is huge competition of price generally leading towards lower amount of prices and hence, there are a number of options in health care services and products. Competition based on quality has increased the significance of higher quality, while there is an encouragement of innovation (Leahy, 2013). Hence, the threat of competition is extremely high presenting major threat and opportunities for RUC.

Threat of new entries: The industry of health care providers has been dominated by a number of organizations, making the threat due to new entries extremely low. Even small organizations can be seen delivering well services with an experience of high growth (Beek, 2014). Hence, the threat of new entries is extremely low.

Threat of substitutes: A number of customers can be seen approaching cheap prescription drugs, however, this particular threat cannot be considered alarming. The amendments of Medicare Modernization Act has helped in addressing a number of concerns so that quality is not compromised for cheap prices (Chosewood, 2010). Hence, the threat of substitutes is extremely low.

Power to bargain among suppliers: The industry of Health Care Service and Providers provides high power to bargain among the suppliers simply because there is existence of high demand for the services. There are only some suppliers in comparison with several buyers (Copeland, 2008). Hence, the power to bargain among the suppliers is extremely high.

Power to bargain among customers: The power to bargain among the customers is extremely weak as health care services involve certain fixed costs based on the provisions made under the services.

ACO payment incentives to the organization

Under the regulations of program, an ACO is referred to as a group of suppliers and providers of services agreed for working together for coordination of care across the patients of Medicare Fee- For- Service being (Copeland, 2008). The key objectives is delivery of high- quality and seamless care for beneficiaries of Medicare, rather than fragmented care leading towards a payment system of Fee- For- Service within which different providers will be receiving disconnected and different payments. Under the regulations of this program, Medicare will be continuously paying individual services and providers for certain services and items under the payment systems of Fee- For- Service (DeGraaf, 2012). For the facility of RUC, there will be a development of benchmark for each and every ACO against which its performance will be measured. There will be measurement of this performance for assessing if there is qualification in receiving the savings shared. The benchmark will be taking into consideration the attributes of beneficiary along with other factors affecting the need for each and every service related to health care. There will be updating of this benchmark for every year of performance in the period of agreement (Goldman, 2014).

How the RUC impacts economic efficiency

There is almost a population of 72 million Americans residing across rural areas and these are highly dependent on the hospitals and health care providers that serve the community as a significant element of the society. Thus, RUC has a major impact on the efficiency of the economy, improving it with time. The RUC will be serving as an anchor for supporting the health of respective region. This provides the financial and structural backbone for health clinics, practice groups of physicians, and long- term, post- acute services of care (Harley, 2015). In addition to this, RUC will be providing essential services for outreaching the community and social work. The facility of RUC will be providing care to patients with highest quality while it will simultaneously tackle challenges because of often constrained financial resources, limited and small- size work force, and geographical locations (Korunka, 2015).

Financial Analysis

Capital requirements

A number of competing hospitals have been seen hiring physicians of emergency department, partially as their strategy of integration for participating in contract of Accountable Care Organizations (ACO). The hospital is at a crucial point requiring immediate response for competitive scenario to make sound investment in the facility of RUC addressing both, economic and financial situation (Harley, 2015). There will be staffing of facility with the physicians and will be inclusive of a laboratory suit, radiology suite and other ventures related to health for supporting the growth of the hospital. For the facility of RUC, the project will be designated as the “Critical Access Hospital” (CAH) (Leahy, 2013). This designation will be obtained for reducing the vulnerability of finance across rural hospitals while improving the accessibility across the healthcare by maintaining significant services across the rural community. There will be accomplishment of this by considering the cost- based model of Medicare reimbursement. There might be existence of certain restrictions under the concern of what category will be holding the eligibility for designation of CAH. For this purpose, the RUC facility will be perceiving the following criteria (Mason, 2004):

The facility will be having 25 or less inpatient beds for acute care.

Its location will maintain a distance of at least 35 miles from a different hospital

There will be maintenance of yearly average length of staying for 96 hours or lower than that for patients of acute care

There will be provision of 24/ 7 services of emergency health care

The market of health care providers perceive a number of goals. There is an existence of competition, as identified by several theories, in the health care industry and these have different impact on services. A substantial value of concentration and integration has already taken place in market of health care, and there will likely be a continuity of this trend (Mizock, 2013). This is specific as providers of health care have been responding to provisions under the Act of Affordable Care along with other factors encouraging integration.

Reimbursement model

There will be accomplishment of above mentioned capital requirements by considering the cost- based model of Medicare reimbursement. For this purpose, the facility of RUC will be making value- based purchases that is significant for improving patient experience and clinical quality with a reduction in inflation of cost (Moen, 2014). This type of reimbursement will be providing incentives for the improvement of patient experience and clinical quality with a reduction in inflation of cost. Further ahead, advantage can be taken from the efficiencies of scale within an environment of fee- for- service payment not becoming a compounding drawback while participating in the respective project (Perin, 2005). The assurance of high quality care across each and every provider will be the key policy goals recognizing the unique requirement of rural places and people for accessibility of health care system that is identified as both, cost efficient and having high quality.

Cost per patient visit

The city- based community hospital of Becker’s Hospital is considering to add an urgent facility of care across a rural region. Urgent care involves delivering ambulatory care is a dedicated facility for delivery walk- in- care, unscheduled outside the department of hospital emergency (Ponocny, 2013). Establishment of the facility of Rural Urgent Care (RUC) will focus on the facilitation of access across care providers by extended hours of service in closer geographic proximity to caregivers, families and patients. RUC will act for the alleviation of demand for services of emergency department in order to shift lower acute patients to an environment of less intensive resource. This particular project will be responding to the shift involved from volume based health care to value based health care. Purchasers and payers have been found showing interest in the improvement of economic efficiency by initiating shift to utilize the emergency department at settings of lower cost, like RUC. A number of competing hospitals have been seen hiring physicians of emergency department, partially as their strategy of integration for participating in contract of Accountable Care Organizations (ACO). The hospital is at a crucial point requiring immediate response for competitive scenario to make sound investment in the facility of RUC addressing both, economic and financial situation (Santha, 2003). There will be staffing of facility with the physicians and will be inclusive of a laboratory suit, radiology suite and other ventures related to health for supporting the growth of the hospital.

Pro forma

Patient revenue

Operating expense

Income from operations

Total expense

Net cash flow

Conclusion

Under the regulations of program, an ACO is referred to as a group of suppliers and providers of services agreed for working together for coordination of care across the patients of Medicare Fee- For- Service being (Thorpe, 2009). The key objectives is delivery of high- quality and seamless care for beneficiaries of Medicare, rather than fragmented care leading towards a payment system of Fee- For- Service within which different providers will be receiving disconnected and different payments. Under the regulations of this program, Medicare will be continuously paying individual services and providers for certain services and items under the payment systems of Fee- For- Service. For this purpose, the facility of RUC will be making value- based purchases that is significant for improving patient experience and clinical quality with a reduction in inflation of cost (Ward-Griffin, 2008). This type of reimbursement will be providing incentives for the improvement of patient experience and clinical quality with a reduction in inflation of cost. Further ahead, advantage can be taken from the efficiencies of scale within an environment of fee- for- service payment not becoming a compounding drawback while participating in the respective project (Whittaker, 2008). The assurance of high quality care across each and every provider will be the key policy goals recognizing the unique requirement of rural places and people for accessibility of health care system that is identified as both, cost efficient and having high quality.

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