Student Dissertation

Agency : Cost; Financial Viability; Surgery; Packages; Tariff; Margins; Cushioning.

Objective : 1. To estimate the differential costs of key surgical procedures of a quaternary care multi-specialty hospital. 2. To assess the financial viability of hospitalization packages offered to cash and credit patients. 3. To assess the effect of cost of cushioning of vacant beds on overall viability of the package.

Background : Corporate hospitals have designed various packages for medical treatments requiring hospitals to cater to patient convenience as well as faster recovery of costs involved. A package is a set of services offered by a healthcare provider that clearly mentions the included services, costs and exclusions if any related to a specific medical. In the context of pre-negotiated tariffs for surgical packages availed by cash or credit patients, there lies a gap between the actual cost incurred and recovery. Lacunae in expected and actual revenue generation when health insurance schemes are involved, a differential cost analysis of key procedures performed is imperative to study the financial viability of hospitalization packages offered to credit patients for sustenance of the hospital.

Methodology : Study area: Single site- 150 bedded quaternary care multispecialty hospital, Hyderabad. Out of 150, 14 beds belong to dialysis, emergency, and radial lounge. Thus, 136 beds comprise of inpatient beds, which include ICU, wards, sharing, single, deluxe, and super deluxe rooms. Study design: Retrospective study, with micro costing approach. Sample selection- All bills for the period of past three months of each procedure was taken for cost analysis. Purposive sampling for Laparoscopic cholecystectomy of 10 bills each (cash and credit patients) in the past three months was observed. Exclusions: Patients with multiple surgeries or co morbidities. Sample size: 78 Methods of data collection: Data was collected from the Hospital Information System, Kranium Health and comparative analysis was done with the help of Microsoft Excel. Key procedures: 1. Laparoscopic Cholecystectomy 2. Laparoscopic repair of Inguinal Hernia 3. Ureteroscopic Lithotripsy 4. Transurethral Resection of Prostrate 5. Extracorporeal shock wave lithotripsy 6. Total Knee Replacement 7. Laminectomy

Findings : Viable surgical procedures: 1. Laparoscopic cholecystectomy (cash packages) 2. Laparoscopic cholecystectomy (credit) 3. Ureteroscopic lithotripsy 4. Laparoscopic repair of inguinal hernia 5. Transurethral resection of prostrate 6. Laminectomy Non-viable surgical procedures: As the costs of vacant beds needs to be absorbed by the occupied beds for the smooth functioning of the healthcare organization, these costs are also included to check for financial viability of surgical procedures offered as packages. 1. Extracorporeal shock wave lithotripsy 2. Total Knee Replacement- ï‚· Not viable for GIPSA rates in General ward ï‚· Not viable for general ward package for cash/self-pay patients ï‚· Break-even for sharing rooms under GIPSA rates.

Recommendations : Although, the analysis depicts financial viability of most of the procedures, the profits earned range from 37- 63%. Cost of vacant bed represents 41% of total cost after cushioning. Adding cost of unoccupied beds causes the profit margins to drop 22-42 percentage points. Manpower takes up the highest fraction,58-80%, in the components of entire costing of each procedure.