Reference no: EM13332008

Exercise  1:

The chief at the ultrasound division of the radiology department in a community hospital would like to measure the multi-factor productivity for a "complete abdomen" procedure. The last three years of data were accumulated, as shown in Table EX.  1

TABLE EX  1

Measurement	Year 1	Year 2	Year 3
Price ($)	880	883	886
Volume	5,583	6,312	6,129
Labor ($)	75,000	77,000	80,000
Materials ($)	2,750	2,900	3,100
Overhead ($)	6,500	6,700	7,000

a. What are the multi-factor productivity ratios for these years?

b. What can you conclude about the productivity trend for this procedure?

Exercise  2:

Calculate the case mix index for the following hospitals, which use the same patient classification system, using the data in Table EX.  4.

TABLE EX.  4

Patient Classification	Direct Care Hours	Hospital 1	Hospital 2	Hospital 3	Hospital 4
Low-level care	3.0	0.50	0.35	0.30	0.20
Medium-level care	6.0	0.35	0.40	0.30	0.25
High-level care	0	0.10	0.15	0.22	0.30
Extreme care	12.0	0.05	0.10	0.18	0.25

Exercise  3:

The PERFORMSBETTER MEDICAL CENTER (PMC) , a three-site urology group practice, requires productivity monitoring. To create a benchmark for future years and to be able to compare performance to similar peer practices, the data in Table EX  7 were gathered for each of the three locations.

Table Ex  7

Measurements/Sites	Location 1	Location 2	Location 3
Annual Visits	135,000	94,000	101,000
Annual Paid Hours	115,000	112,000	125,000
Patient Classification (Based on CPT Coding)
Initial Visit (.55)*	.30	.10	.15
Low-Level Decision Making (.50)	.40	.20	.15
Medium -Level Decision Making (.75)	.20	.40	.35
High -Level Decision Making (1.40)	.10	.30	.35
Skill-Mix Distribution
Specialists ($110/hr.)+	.50	.30	.70
General Practitioners ($85/hr.)	.30	.50	.30
Nurse Practitioners ($45/hr.)	.20	.20	.00

*Represents total hours of direct care required per patient visit within the category

+ Represents hourly compensation including fringe benefits for the skill level

Assume that 1 general practitioner = .75 specialists, and 1 nurse practitioner = .35 specialists for economic measure of skill substitution.

Calculate:

a. Work hours/visits

b. Adjusted work hours /visits

c. Work hours /adjusted visits

d. Adjusted work hours/adjusted visits ?

e. Total salary expense/visits

f. Total salary expense /adjusted visits ?

g. Percent of work hours in direct patient care

h. Percent of adjusted work hours in direct patient care ?

i. Total salary expense/hours of direct patient care ?

?Use these measures for the final comparison among the three sites, and discuss potential problems at each site or overall for the company. What are your recommendations to correct them?