Lakeside Hospital Case

1235 words 5 pages
Lakeside Hospital
A hospital just can’t afford to operate a department at 50 percent capacity. If we average 20 dialysis pa- tients, it costs us $425 per treatment, and we’re only paid $250. If a department can’t cover its costs, includ- ing a fair share of overhead, it isn’t self-sufficient and I don’t think we should carry it.

Peter Lawrence, M.D., Director of Specialty Services at Lakeside Hospital, was addressing James Newell, M.D., Chief Nephrologist of Lakeside’s Renal Division, concerning a change in Medicare’s payment policies for hemodialysis treatments. Recently, Medicare had begun paying independent dialysis clinics for standard dialysis treatments, and the change in policy had caused patient volume in Lakeside’s dialysis
…show more content…
As a re- sult, their per treatment costs were significantly lower than those in a hospital facility. For example, a treatment in a center operating at 100 percent capacity with 40 patients could cost as

little as $160.
__________________________________________________________________ ___________________________ This case was prepared by Professor David W. Young. It is intended as a basis for class discussion and not to illustrate either effective or ineffective handling of an administrative situation.Copyright © 2012 by The Crimson Group, Inc. To order copies or request permission to reproduce this document, contact Harvard Business Publications (http://hbsp.harvard.edu/). Under provisions of United States and interna- tional copyright laws, no part of this document may be reproduced, stored, or transmitted in any form or by any means without written permission from The Crimson Group (www.thecrimsongroup.org)

LAKESIDE DATA Lakeside’s direct and allocated costs for the Renal Dialysis Unit in the previous fiscal year are detailed in Exhibit 1. Dr. Newell also obtained the unit’s cost center report for the same fiscal year (Exhibit 2), which provided a breakdown of the unit’s direct costs. Dr. Newell intended to use the prior year’s costs to calculate the per-treatment cost at various volume levels for the current year. He also wanted to find the point at which the unit’s revenue would meet

Related

  • Shouldice Hospital Case
    2154 words | 9 pages
  • Lakeside Company Case 6
    2856 words | 12 pages
  • Case Study- General Hospital
    965 words | 4 pages
  • Massachusetts General Hospital: CABG Surgery (A) case study
    1447 words | 6 pages
  • Shouldice Hospital Case Study
    1497 words | 6 pages
  • D.U. Singer Hospital Case
    1757 words | 8 pages
  • Hospital Supply Case Study
    4921 words | 20 pages
  • Lakeside Company Intro Case
    1094 words | 5 pages
  • St. Marys Hospital Case
    1655 words | 7 pages
  • Memorial Hospital Case Study
    2449 words | 10 pages