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					             2/27/2012                                                                                                                                       estimating costs                                             Page 1


ESTIMATION WORKSHEET
                                                                              Step 1. Defining Intervention Characteristics

                                                                                Phases and duration of the intervention                                           Financial and/or other benefits
   Disease             Brief description of the intervention
                                                                 Development Phase          Transition Phase        Operation Phase         Benefit 1 (description)   Benefit 2 (description)   Benefit 3 (description)

                                                                     starting date            starting date           starting date



                                                                     ending date               ending date       recovery period (years)

                                                                                                                           3



                                                                                     Step 2. Estimate Development Costs


                          Development Team Meetings                                                                                           INSTRUCTIONS

                  Total number of team       Average meeting                             1. Development activities include: (a) meetings for planning the intervention, (b) preparation for those meetings,
                        meetings              length (hours)                             and (c) any testing of the intervention in advance of implementing it.
                                                                                         2. Costs of those activities will involve (a) time spent by your own staff, and (b) expenditures on consultants,
                                                                                         supplies and purchased services.

                            Development Team Members                                                                                                         Consultants, Supplies and Services

                                                                                           Average preparation
                                                                    Average number
                      Qualification            Annual Salary                                time (in hours per                                                             Description              Total Dollars
                                                                attending each meeting
                                                                                           person per meeting)

                         Doctor                   150,000                                                                                                                Consultant fees

                          Nurse                     50,000                                                                                                               Office supplies

 Other staff 1                                                                                                                                 Other Services               Radio ads

 Other staff 2                                                                                                                                Other materials 1

 Other staff 3                                                                                                                                Other materials 2



                                                                                      Step 3. Estimate Transition Costs

                                      Staff Costs                                                                                                          INSTRUCTIONS

                      Qualification            Annual salary         Total hours                                 1. Transition activities include: (a) training staff and selling them on the intervention, and
                                                                                                                 (b) acquiring the necessary equipment and facilities.
                         Doctor                   150,000                                                        2. Costs include: (a) time spent by your own staff, (b) expenditures on consultants,
                                                                                                                 supplies and purchased services, and (c) one-time investments in equipment and facilities.
                          Nurse                     50,000

 Other staff 1                                                                                                                                         Other Transition Costs

 Other staff 2                                                                                                                                   Description               Total dollars

 Other staff 3                                                                                                                                 Consultant fees

                       Computer and Facilities Investments                                                                                   Supplies/Materials

                       Description              Total Dollars                                                                                 Travel Expenses

                       Hardware                                                                                   Purchased Service 1

                         Software                                                                                 Purchased Service 2

  Facilities 1                                                                                                       Other costs 1

  Facilities 2                                                                                                       Other costs 2


                 Step 4A. Estimate Changes in Operation Revenues                                                                      Step 4B. Estimate Changes in Cost from Changes in LOS




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                                     INSTRUCTIONS                                                                                                                  INSTRUCTIONS
Enter numbers of patients by DRG number or name whose treatment is directly                    The value of a bed-day depends on its alternative use. A change in LOS is a change in the number of bed-days used for the patient
affected by the intervention.                                                                  affected by the intervention. Since the number of beds is constant (in the short term), there must be an equal but opposite change in
(1) For patients paid by DRG, revenue should be the same before and after the                  bed-days used in another way.
intervention.                                                                                  (1) If the hospital operates below capacity, the alternative "use" of the bed is to remain empty. Estimate value of a bed-day as the cost of
(2) For other patients, revenue may change if the use of reimbursable services                 the LAST day of the patient's stay (not the AVERAGE day, since the expensive procedures are mostly done early).
changes.                                                                                       (2) If the hospital operates at capacity, the alternative use of the bed is to be occupied by another patient. Estimate the value of a bed-
                                                                                               day as the average daily profit from a bed-day.
Use the amount collected for the average patient in the group, NOT amount billed.
Enter the cost of these new services in 4c.


                            1. For Patients Not Paid by DRG                                                                                              1. For Patients Not Paid by DRG

                                                         Revenue per patient                          Bed-days per patient, normal bed              Estimated value of a          Bed-days per patient, ICU or CCU             Estimated value of an
  List type by     Number of patients per
                                                                                                                                                    normal bed-day for                                                         ICU or CCU bed-day
 DRG number or           month
                                            Before the intervention   After the intervention   Before the intervention   After the intervention        your institution     Before the intervention   After the intervention     for your institution
     name
                                                                                                                                                            450                                                                          900

                                                                                                                                                            450                                                                          900

                                                                                                                                                            450                                                                          900

 DRG number or                2. For Medicare and other Patients paid by DRG                                                                      2. For Medicare and other Patients paid by DRG
    name
                                                                                                                                                            450                                                                          900
                                                                      The net revenue per
                                                                            patient                                                                         450                                                                          900
                                                                       does not change
                                                                                                                                                            450                                                                          900


                                                                           Step 4C. Estimate Other Changes in Cost from Changes in Ongoing Resource Use

                                    INSTRUCTIONS:                                                                                                      3. For Labor Resources (per patient)
1. DON’T DOUBLE COUNT                                                                                                                                                                      Hours per patient
If you estimate savings from LOS reductions (Step 4B), find out which resources are                                                                                                                                            Estimated value of an
                                                                                                                             Qualification             Annual salary
counted in the value of a bed-day, and don't enter them here as well. Example: Some                                                                                                                                            hour for your institution
                                                                                                                                                                            Before the intervention   After the intervention
nursing is typically included in the cost of a bed-day.
                                                                                                                                Doctor                    150,000
2. The value of a resource for your institution depends on: (1) who pays for it, and (2)
what else it might be used for.                                                                                                 Nurse                     50,000
For example:
(1) If the hospital does not pay for doctors' time, a reduction in the time they spend              Other staff 1
may not save the hospital anything in the short run.
                                                                                                    Other staff 2
(2) A reduction in nurses' time yields a savings only if nurses actually work fewer
hours (and are paid less) or if their freed-up time is valuable elsewhere in the hospital.          Other staff 3

                                                                                                                                                  4. Pharmacy Resources

                                                                                                                                     Before the intervention                               After intervention

                                                                                                                             # of patients               # of doses              # of patients             # of doses

                                                                                                    Vancomycin

                                                                                                    Other Meds




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                                                 step 1


           recovery period in months                               duration of the intervention phases
                       36.00                                                    in months
     time in months transcurred between                   development             transition           operation

   end of development and                                      0.00                 0.00                36.00
                                         0.00
    beginning of transition
                                                          annual interest               equivalent
                                                              rate                  monthly interest rate
end of transition and beginning
                                         0.00
         of operations
                                                               6%                              0.49%



                                                          step 2


        overhead rate                    50%                              labor                    total hours             costs

          costs per hour of labor time                                  Doctor                            0                  0

            Doctor                       108                              Nurse                           0                  0

               Nurse                     36                                           0                   0                  0



                        0                 0                 Other staff               0                   0                  0

 Other staff
                        0                 0                                           0                   0                  0

                        0                 0                                sub-total labor costs                             0

                                                                           sub-total other costs                             0



      present value of                                                    total nominal costs of
                                       #DIV/0!                                                                               0
     development costs                                                     development phase


                                                          step 3

        overhead rate                    50%                              labor                                    cost

          costs per hour of labor time                                  Doctor                                      0

            Doctor                       108                              Nurse                                     0

               Nurse                     36                                           0                             0

                        0                 0                 Other staff               0                             0

 Other staff            0                 0                                           0                             0

                        0                 0                                sub-total labor costs                             0

                                                                           sub-total other costs                             0



       present value of                                                   total nominal costs of
                                     #DIV/0!                                                                                 0
       transition costs                                                      transition phase



                                                              pesent value of total investment for the
                                                                                                                          #DIV/0!
                                                             intervention (development and transition)




                                                  steps 4a. and 4b.




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                                       sub-total
                                                       change in bed-                 change in bed-
                  change in profit    change in                                                          sub-total
type of patient                                          days for a   sub-total value days for an ICU
                    per patient      revenue per                                                          value
                                                        normal bed                     or CCU bed
                                        month


                                                    Non-Medicare



                         0                0                  0                    0                 0       0


                         0                0                  0                    0                 0       0

                         0                0                  0                    0                 0       0

                                                      Medicare

               DRG number or name                            0                    0                 0       0

                         0                                   0                    0                 0       0

                         0                                   0                    0                 0       0


                                          0                                                                 0
 total change in revenues per                                savings (or added revenues) due to
            month                                                changes in LOS per month


 present value of changes in                                  present value of savings (or added
          revenues                        0                   revenues) due to changes in LOS               0



                                                       step 4c


           total number of patients per month for whom labor (operations) time changes apply                 0

         overhead rate                                                 labor                 change in
                                         50%                                                               cost
                                                                                               hours
          costs per hour of labor time                               Doctor                         0       0

            Doctor                       108                           Nurse                        0       0

               Nurse                      36                                      0                 0       0

                         0                0              Other staff              0                 0       0

 Other staff             0                0                                       0                 0       0

                         0                0                       sub-total labor costs per month           0

                                                                  sub-total other costs per month           0



       present value of                                               total nominal costs of
                                          $0                                                                0
       operations costs                                            operations phase per month
                         4c (contd) Costs per month of pharmacy

                       Before            After             savings             change in
                                                                                 doses
Vancomycin               0                0                  0                     0
 Other Meds              0                0                  0                     0
Total Savings                                                0

                                                          change in monthly operational net revenue         0




                                                                                                                     626b15a3-0e22-4be0-b1eb-a8a983c2167a.xls
SUMMARY REPORT FOR THE INTERVENTION
Discounted Costs of Development
                                                                                                   #DIV/0!
Discounted Costs of Transition
                                                                                                   #DIV/0!
Discounted Changes in Operational Costs
                                                                                                                0
Discounted Changes in Operational Revenues
                                                                                                                0
Discounted Savings (or Additional Revenues) due to changes in LOS
                                                                                                                0
Net Present Value (NPV) of the Intervention
                                                                                                   #DIV/0!
Change in monthly net revenues during the Operations phase
                                                                                                                0
Number of operation months planned for the intervention
                                                                                                          36.0
Number of operation months in order to reach the break-even point
                                                                                                no break-even


ASSUMPTIONS MADE
Total time (in years) this intervention is expected to last (since development starting date)                   3

Annual interest rate relevant for discounting this intervention                                              6%

Overhead rate for personnel at your institution                                                           50%

Annual Salary for a Doctor at your institution                                                        150,000

Annual Salary for a Nurse at your institution                                                          50,000

Estimated costs of a normal bed-day for your institution                                                     450

Estimated costs of an ICU or CCU bed-day for your institution                                                900

Cost of Vancomycin                                                                                              5
Average cost of other antibiotics                                                                               2
                                             DEFINITIONS & EXAMPLES


           Cell Label
         & Step Names                                          Definitions for cells and labels

Step 1: Defining Intervention Characteristics

                             Disease     = Enter in the disease(s) the intervention will focus on.

     Brief description of intervention   = Briefly describe what the intervention is (standing orders, flowsheet, etc.).


Phase & duration of intervention
              Development phase          = Enter dates for the beginning and end of development phase for the
                                         intervention.

                    Transition phase     = Enter dates for the beginning and end of transition phase for the
                                         intervention.

                    Operation phase      = Enter date when the operational phase for the intervention began.


                    Recovery period      = Automatically entered from "summary report & assumptions" worksheet.


Financial &/or other benefits
                     Benefit 1..2..3     = In narrative form, describe the benefit(s) your organization hoped to or did
                                         achieve from the intervention.

Step 2: Estimate Development Costs

Development team meetings
       Total num. team meetings          = Total number of meetings held to discuss and plan for the interventions
                                         development. Will include formal and informal meetings.

        Avg. meeting length (hours)      = Average length of time, in hours or partial hours, of team meetings.
                                         (e.g., total meeting time over 3 months = 30 hours over 15 meetings. Would
                                         enter 15 meetings with a duration of 2 hours each).


Development team members
                   Qualification         = Type of individual(s), by profession, who were on the team. Doctors and
                                         nurses are pre-loaded. Their salaries can be changed on the "summary report
                                         & assumptions" worksheet.

                       Annual Salary = Annual salary for each profession represented on development team.


 Avg. num. attending each meeting        = Number of people in each profession type, on average, that attended each
                                         meeting.

                   Other staff 1..2..3   = Enter type of person or profession other than doctor or nurse. Will need to
                                         enter salary amount in adjoining cell(s).
Step 2 Estimate Development Costs ..Continued

Development team members cont..
  Average preparation time (in hrs. = Amount of time each type of person spent outside of meetings preparing for
          per person per meeting) development meetings. This could include research activities, typing minutes,
                                    or any other meeting-related activity that occurred outside the actual meeting.




Consultants, supplies and
services
                      Description        = Enter a label that describes the material, or service used in the development
                                         phase. Can change label to reflect materials or services used.

                Total dollar amount      = Amount of money spent on the service, material, or consultant during the
                                         entire development phase. If organization spent $300 per month on supplies
                                         over a four-month development phase, then entry would be $1200.

Step 3: Estimating Transition Costs

Staff costs

                         Qualification   = Type of individual(s), by profession, who were on the transistion team.
                                         Doctors and nurses are pre-loaded. Their salaries can be changed on the
                                         "summary report & assumptions" worksheet.

                      Annual salary = Annual salary for each profession represented on transistion team.

                          Total hours    = Total time spent by staff type performing transition activities such as training
                                         and selling intervention. Include mass training sessions and inservices
                                         performed in the nursing units. If a total of 40 nurses particiated in a 20-
                                         minute inservice over the transition phase, enter 13.33 hours for nursing time.
                                         (40 x 20 min. = 800 minutes or 13.33 hours).

                  Other Staff 1..2..3    = Enter type of person or profession other than doctor or nurse. Will need to
                                         enter salary amount in adjoining cell(s).

Computer & facilities investments

                           Hardware      = Price paid for all hardware purchased during the transition phase of the
                                         intervention.

                            Software     = Price for all safware purchased during the transition phase of the intervention.

                     Facilities 1..2..   = Any other item that could be included in this category, such as office space
                                         or durable medical equipment that was purchased during the transistion phase
                                         of the intervention. Enter a brief description of item(s) and a dollar amount.


Other transition costs

      Consultants / supplies / travel    = Enter the total amount of money spent on each of these items during the
                                         transistion phase of the intervention.
Step 4A. Estimate Changes in Operation Revenues

For patients NOT paid by DRG           = Any patient not paid on a DRG basis.

     Number of patients per month      = Number of non-DRG patients impacted by the intervention per month.

Revenue per patient:
              Before intervention      =Average revenue generated by the patient type affected by the intervention
                                       for your facility before the intervention was implemented.

                  After intervention   =Average revenue generated by the pateint type affected by the intervention
                                       for your facility after the intervention was implemented.


Step 4B. Estimate Changes in Cost from Changes in LOS


               Value of a bed-day = Depends on the use your institution can make of the bed-day.
             (normal or ICU/CCU)
                                   - If the bed stands empty, its value is the savings in housekeeping, nursing
                                  services, etc. Estimate as the cost of the LAST day of the patient's stay.

                                        - If your institution can fill the bed, its value is the average profit per patient
                                       day for that kind of bed.

                                       - $450 is an average figure. Use if facility is unable to provide an amount.


Step 4C. Estimate Other Changes in Cost from Changes in Ongoing Resource Use
         DON'T DOUBLE COUNT If you estimate savings from LOS reductions (Step 4B), find out which
                                  resources are counted in the value of a bed-day, and don't enter them here as
                                  well. Example: Some nursing is typically included in the cost of a bed-day.


Labor resources per patient

                      Qualification    = Type of individual(s) by profession. Doctors and nurses are pre-loaded.
                                       Their salaries can be changed on the "summary report & assumptions"
                                       worksheet.

                     Annual salary     = Annual salary for individuals with each qualification.

                 Hours per patient     = Patient-specific hours - (i.e., hours that contribute to the care of the specific
                                       patient, not merely patients in general).
                Before intervention    = Labor costs before intervention was implemented.
                  After intervention   = Labor costs after intervention was implemented.
Step 4C. Estimate Other Changes in Cost from Changes in Ongoing Resource Use... Continued
                Value of an hour = Value to your institution.
                                     - A reasonable value is often an hour's worth of the annual salary paid by
                                  your institution, burdened by the overhead rate.
                                     - But the value may be ZERO if your institution will not hire or fire staff, or
                                  cut or extend hours of part-time staff, or change the amount of other work they
                                  do.
                                     - If you institution DOES change the other work that staff does, the value is
                                  the profit per hour on that other work.


Other resources                        Resource label (e.g., Equipment, Materials) may be replaced, if appropriate,
                                       e.g., by facilities leasing, or contracting for services.


                  Dollars per month    = Amount spent on resources that are impacted by the intervention. This
                                       documents any change operating the intervention may have on these
                                       resources.
                Before intervention    = Costs before intervention was implemented.
                  After intervention   = Costs after intervention was implemented.


                                                   ASSUMPTIONS

         Total time (in years) this    = Time frame for operational life of intervention. This may be changed if
  intervention is expected to last     desired.
     (since development starting
                             date)

 Annual interest rate relevant for     = Interest rate for discounting the time value of money. An average is 6%.
   discounting this intervention       May be changed if provider is able to provide an actual value.


   Overhead rate for personnel at      = Standard rate for overhead (benefits etc..). An avereage is 50% and may be
                  your institution     changed if provider can provide a more accurate rate.

Annual salary for a doctor at your     = Average salary for physicians. May be changed if needed.
                       institution

Annual salary for a nurse at your      = Average salary for nurses. May be changed If needed.
                       institution

                                                SUMMARY REPORT

              Discounted costs of      = Total cost of the development phase taking into account the time value of
                    development        money.

   Discounted costs of transition      = Total cost for the implementation phase taking into account the time value of
                                       money.

           Discounted changes in       = Total change in operational profit taking into account the time value of
                operational profit     money.

   Net Present Value (NPV) of the      = Present value of the intervention to the provider taking into account the time
                     intervention      value of money.
Change in monthly profit during    = Amount the provider sees in profit each month the intervention is in
          the operations phase     operation.

   Number of operation months      = Time horizon remaining for the interventions.
    planned for the intervention

Number of operation months in      = Number of months in operation it takes the provider to recoup the costs of
 order to reach the break-even     development and implementation for the intervention.
                          point
ervention.

				
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