Revenue-based plan key to financial stability
Revenue-based plan key to financial stability
Timeshare system works best
The Center for Integrative Medicine at O’Connor Hospital was not meeting its budget goals because its business plan was not working.
The original plan provided a set fee for the services of each practitioner with patients paying the fee to the center and getting reimbursed by their insurance company. However, the payment method was not agreeable to insurance companies. As a department of O’Connor Hospital, the center was obligated to the requirements of every managed care agreement the health care institution had made. Therefore, it had to bill the insurance companies, not the patient.
"In some cases, a managed care company may pay only $38 for an acupuncture session and we were paying our practitioners $40. Not only were we not covering our cost for our practitioner, we weren’t getting anything for our additional overhead," says Tim Levers, program director at the center located across the street from the hospital in San Jose, CA.
To solve the problem, the Center for Integrative Medicine became a separate entity and is no longer a part of O’Connor Hospital. That decision provided the freedom to set up a timeshare arrangement with practitioners. Management determined how much money was needed to cover overhead for the number of hours the center was open, and calculated an hourly rate that practitioners and physicians would pay to provide services through the center.
The center provides space, schedules patient appointments, and provides a registered nurse for an extra fee from the practitioner. Contracts are signed with each practitioner, and he or she collects the fee from the patient. If practitioners choose to be a part of an insurance plan, they will do that on their own.
"We want to provide a service for the community, but it does have to be financially viable," says Levers. The timeshare business plan provided a win-win financial arrangement.
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