CHALLENGES TO THE HEALTHCARE INDUSTRY part 2

6050 WORDS

Total Annual Protection and Maintenance Cost  $46,800 (Proposal 260 tablets)

Total Proposal Purchase Cost including Ongoing Fees $136,600

 The financial penalties associated with the HRRP are significant for healthcare organizations.  In FY 2015, ABC Healthcare was charged a little less than $50K in hospital readmission penalties.  In FY 2014, their assessed penalty was 1.14% and 1.17% the following year (Kaiser Health News, 2016).  In 2016, the HRRP penalties reached an all-time high of $528M.  This is $108M more than the previous year due to changes relating to how hospital readmissions are measured (USNews.com, 2016).  Unfortunately, these penalties are expected to continue to grow until healthcare organizations get a better handle on their readmission rates.  The integration of advanced telehealth monitoring will not only assist healthcare organizations to reduce their hospital readmission rates, but it will also help to improve clinical outcomes, which is also now tied to provider reimbursement.   

Proposal Impact

The operating budget only covers one-year period and typically excludes the capital budget, which has a longer duration (Wright, n.d.).  Capital budgets cover capital expenses, such as the advanced telehealth proposal, which will be capitalized and appear as long-term asset on the balance sheet.  As this asset depreciates, it will show up on the income statement as a depreciation expense (Wright, n.d.).  Therefore, this capital expenditure will impact the income statement far less than it will impact the balance sheet.  The capital expenditure will also have an impact on cash and the cash flow statement, both of which do not appear in a typical operating budget (Wright, n.d.).

The operating budget reflects the interest port