The North Creek Hospital System (NCHS) is suffering a considerable rise in the cost of medical supplies, labour, and insurance premiums, which is the source of the monetary challenge depicted in the Rates Negotiation Crisis Scenario Simulation. The healthcare facility is challenging since the cost of services and treatments is increasing. However, insurance companies are still waiting to be ready to pay for the higher costs (Dossetor, 2022). This circumstance impacts the hospital’s financial performance, as well as its profitability and capacity to serve patients with high-quality treatment. This document will cover the elements that determine the cost and charges of services and procedures and the choices that the hospital may investigate to solve this dilemma. The paper will be available for download here.
Factors Affecting the Cost of Services/Procedures
The price of services and treatments offered by healthcare organizations is governed by several variables, some of which include the price of medical supplies and labour and the cost of insurance premiums, technology, and equipment. The price of medical supplies and equipment is variable and is determined by factors such as the kind of item, the quantity needed, and the quality of the product. For instance, high-quality medical supplies and equipment tend to come at a more significant financial outlay than their lower-quality counterparts. In addition, the degree of experience and expertise an employee has is a significant factor in determining the cost of labour (Le, 2022). Healthcare organizations are required to provide salaries and benefits that are competitive in the market in order to entice and keep competent and experienced employees. The amount paid for insurance premiums is another crucial aspect contributing to the overall cost of services and treatments (Sheridan, 2019). When covering the expenses of malpractice claims and other liabilities, healthcare organizations must make premium payments to insurance firms.
Factors Affecting the Charges of Services/Procedures
Several variables decide the prices healthcare organizations charge for their services and procedures. These considerations include the price of the services and procedures, the amount of market competition, and the rates agreed with insurance companies. The costs associated with delivering various treatments and procedures are included in healthcare organizations’ rates (Dossetor, 2022). However, the prices placed on services and processes are not necessarily equal to the amount it takes to provide such services. The amount of competition in the market has an additional impact on the prices charged for services and processes. Companies in the healthcare industry that are up against stiff competition could reduce their prices to win more clients. Ultimately, insurance companies negotiate prices with healthcare organizations to decide the costs of treatments and operations covered by insurance (Abed, 2021).
What Should the Hospital Do in This Situation?
In order to find a solution to this dilemma, the hospital might investigate a few different possibilities. One possibility is to bargain with insurance companies to raise the rates they compensate patients for services and procedures. To support their discussion, the hospital can supply statistics about the rising expenses of medical supplies, labour, and insurance premiums (Abed, 2021). Increasing productivity, cutting down on waste, and standardizing routine tasks are all ways to save costs without compromising the quality of work and customer satisfaction. The hospital may also investigate forming agreements with other healthcare organizations to pool available resources and save expenses. Finally, the hospital has the option of investigating alternate sources of income, such as the introduction of new services or the expansion of current ones (Sheridan, 2019).
What Position Should the Hospital System Take with North Creek?
In this particular scenario, the hospital system needs to adopt a preventative strategy and negotiate with North Creek to raise the payment rates for services and treatments. To support their bargaining efforts, the hospital system needs to offer statistics on the rising expenses of medical supplies, labour, and insurance premiums. Additionally, the hospital system must investigate potential avenues for cutting expenses and boosting operational effectiveness. Additionally, the hospital system must consider forming partnerships with other healthcare organizations to pool their available resources and cut their operating expenses (Le, 2022). By adopting preventative measures, the hospital network can secure its continued financial viability and capacity to provide high-calibre medical treatment to patients.
The Rates Negotiation Crisis Scenario Simulation draws attention to the significance of having a solid awareness of the elements that influence healthcare organizations’ prices for their various services and procedures. In order to find a solution to this dilemma, the hospital system may investigate several possibilities, such as negotiating with insurance companies, decreasing expenditures, and investigating new income sources. In this particular scenario, the hospital system needs to adopt a preventative strategy and negotiate with North Creek to raise the payment rates for services and treatments.
Abed, Y., Sahu, M., Ormea, V., Mans, L., Lueddeke, G., Laaser, U., … & Seifman, R. (2021). Special Volume No. 1, 2021: The Global One Health Environment. South Eastern European Journal of Public Health (SEEJPH).
Dossetor, P. J. (2022). Health Service Use and Needs of Aboriginal Children in the Remote Fitzroy Valley (Doctoral dissertation, The Australian National University (Australia)).
Le, U. (2022). The Economics of Public Safety (Doctoral dissertation, The Claremont Graduate University).
Sheridan, M. J., Rainville, R. R., King, A., Royster, B., & Fazari, G. M. (2019). Historical Dictionary of American criminal justice. Rowman & Littlefield.