Reference no: EM133971507

Question

For this case study, we'll take a look at St. Sebastian Health System, a modest-sized Midwest hospital system. The CFO has brought you in to examine some long-term financial trends in his system. She is projecting a loss of $12.5 million in 2023, which is concerning, since 2020, 2021 and 2022 all had modest operating gains. She is concerned that state and federal aid payments received in those years (but not '23) related to the Covid pandemic may have masked some underlying weakness in St. Sebastian's operations. So, she's asked you to take a look at the financial picture from 2013 and compare that to the 2023 year. In the year 2023, St. Sebastian had 238,900 patient visits (combined IP and OP) with an average cost per visit of $1,785 with an average charge per visit of $4,650. In 2013, the average cost per visit was $1,426 and the average charge per visit was $3,637. In 2013, Commercial plans were reimbursing (paying) St. Sebastian 55.25% of their charges, Medicare paid 30% of charges, Medicare Advantage paid 29.1% and Medicaid paid 25% of charges. Uninsured patients were paying around 2% of charges. In 2023, Commercial plans paid 51.25% of charges, Medicare.