- One way that Dr. Meara can reduce the costs of unused capacity is to adjust staffing so that the department achieves 98% capacity utilization by type of personnel position. What would be the financial impact of altering staffing to achieve 98% capacity? What types of changes would he need to make to achieve this and how might he do this? How realistic do you think this would be?
- A second way that Dr. Meara could address this situation is to accept a new contract from a local health insurer. For the sake of simplicity, assume that a private health care plan that currently does not use BCH has a need for the three visit types in Questions 1 and 4. The volume from the new contract would be 20% of the amount described in Question 4 and the new health plan would reimburse BCH 75% of charges. So if the new contract is accepted, BCH would maintain all of its existing volume and receive 20% more through the new contract. If the contract is accepted, staffing would need to be altered to achieve 98% capacity utilization by type of personnel. What is the financial impact of accepting this contract and altering staffing accordingly? Is reducing staffing or increasing volume more attractive financially?
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One way that Dr. Meara can reduce the costs of unused capacity
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