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Duke Heart Failure Program Helpful Hints General Observations • Inpatient hospital revenues decrease by approximately $7000 (DRG 127) for each CHF patient not admitted to the hospital. • Duke’s salaried cardiologists would only be minimally impacted by a move from inpatient to outpatient care. • CHF patients are relatively low margin patients at Duke (compared to say transplant patients). • Duke’s CHF clinic can allow it to substitute high margin for low margin patients. Specific Revenue Considerations Revenue Loss Inpatient: 600 patients x reduction in admission rate x DRG reimbursement Revenue Loss: Physician Admissions Decline: 600 patients x reduction in admissions rate x ($234+ $73×4) ALOS Decline: 1.21 admits per year x 600 x $73 x 1.6 (ALOS reduction) Revenue Increase: Physician (Hospital revenue increase due to increase clinic visits) 600 patients x (12.9 – 7.8) clinic visits per year = 3,060 extra visits (¾ NP and ¼ MD) (3/4 x 3060 x 0.85 x $100) + ( ¼ x 3060 x $100) = Specific Cost Considerations Hospital cost decline due to decline in admissions: 600 patients x (1.86 – 1.21) admits per year x $ 3800 per admit Hospital cost decline due to decline in ALOS (use estimated cost of $500 per day): 1.21 admits per year x 600 x $500 x 1.6 reduction in ALOS = Increase in hospital clinic costs: 2.5NP FTE x $80K = Start-up costs: $125K Week 5 Assignment 2: Case Write-Up: The Duke Heart Failure Program Due: Day 7 Value: 100 points Read: Dartmouth-Hitchcock Medical Center: Spine Care Read: Duke Heart Failure Program: 604033-HCB-ENG. Answer the following questions only and show all your work (two pages maximum): 1. How much money is Duke University Health System losing? 2. What are the financial results of the CHF disease management program? Hint: Examine revenue and cost impacts for the hospital (inpatient and outpatient) and physicians’ perspective. 3. What are the pros and cons of a CHF disease management program like the one at Duke from the perspective of payers, providers, employers, patients, and a private carve-out?

Duke Heart Failure Program
Helpful Hints
General Observations
• Inpatient hospital revenues decrease by approximately $7000 (DRG 127) for each CHF patient not admitted to the hospital.
• Duke’s salaried cardiologists would only be minimally impacted by a move from inpatient to outpatient care.
• CHF patients are relatively low margin patients at Duke (compared to say transplant patients).
• Duke’s CHF clinic can allow it to substitute high margin for low margin patients.
Specific Revenue Considerations
Revenue Loss Inpatient: 600 patients x reduction in admission rate x DRG reimbursement
Revenue Loss: Physician
Admissions Decline: 600 patients x reduction in admissions rate x ($234+ $73×4)
ALOS Decline: 1.21 admits per year x 600 x $73 x 1.6 (ALOS reduction)
Revenue Increase: Physician (Hospital revenue increase due to increase clinic visits)
600 patients x (12.9 – 7.8) clinic visits per year = 3,060 extra visits (¾ NP and ¼ MD)
(3/4 x 3060 x 0.85 x $100) + ( ¼ x 3060 x $100) =
Specific Cost Considerations
Hospital cost decline due to decline in admissions:
600 patients x (1.86 – 1.21) admits per year x $ 3800 per admit
Hospital cost decline due to decline in ALOS (use estimated cost of $500 per day):
1.21 admits per year x 600 x $500 x 1.6 reduction in ALOS =
Increase in hospital clinic costs:
2.5NP FTE x $80K =
Start-up costs: $125K

Week 5 Assignment 2: Case Write-Up: The Duke Heart Failure Program
Due: Day 7
Value: 100 points
Read: Dartmouth-Hitchcock Medical Center: Spine Care
Read: Duke Heart Failure Program: 604033-HCB-ENG.
Answer the following questions only and show all your work (two pages maximum):
1. How much money is Duke University Health System losing?
2. What are the financial results of the CHF disease management program?
Hint: Examine revenue and cost impacts for the hospital (inpatient and outpatient) and physicians’ perspective.
3. What are the pros and cons of a CHF disease management program like the one at Duke from the perspective of payers, providers, employers, patients, and a private carve-out?

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