Boston Children Hospital: Measuring Patients Cost

Answer to Question 2:

The environment in which BCH has been operating has suddenly become very hostile, giving the fact that government is making reform to make health care service more affordable to the general public.

BCH has a reputation of being the last resort for critical and life taking diseases but the facilities it provides are highly priced given the fact that they have highly specialized doctors/physician, ultra-modern equipment’s and state of the art research centre.

But the decaying economic situations, government policies to make health care affordable, rising competition (Tufts Floating Hospitals), withdrawal of support from insurers (Payors) are all indicating BCH to decrease its costs of services and bring in more patients.

The clinical department heads Dr. Peter Waters, clinical chief of Orthopaedic Surgery and Dr. John Meara, Chair of the Department of Plastic and Oral Surgery awakens to the demand of the situation and realise that the existing cost systems at BCH is unrealistic as it averages out costs across complex and simple cases and does not consider the cost of resources actually being used to treat patients.

Another reason why they are interested in working out more accurate costs for their departments may be that they want to attract more patients with complex conditions, and not be limited to the cases of rare childhood defects and diseases.

• They want to grow their department’s outreach and treat more patients instead of simply cutting costs to reduce expenses.
• They want to use quality to cost relationship to make their services valuable and establish to client the justification of prices charged for the services.

Dr. Meara on the other hand has his own reasons, where he believes that the services of BCH are outstanding and that the prices are high only If seen in a standalones basis, if accumulated over the full cycle of treatment, the charges will be on a lower side as they provide less complicated, more efficient services with fewer patient visits. However, he wants to work out the cost of his department so as to better negotiate bundled payments with Payors.

...