Economics of Health Care

1. Economics of Health Care Val Schott, MPH Director, OSU Center for Rural Health Oklahoma State University Center for Health Sciences Center for Rural Health Tulsa, Oklahoma

3. Trends in Health Care Economic Impact of a Rural Hospital Estimate Need for a Primary Care Physician Estimating Cost & Revenue For A Rural Primary Care Physician Presentation Overview

4. Trends in Health Care

5. $4,790 $7,026 $12,782 Health care expenditures for the year 2006 were ____ per capita in the United States.

6. 16.0 % 19.6 % 13.8 % Health care expenditures for the year 2006 amounted to___ percent of gross domestic production.

7. National Trends in Health Care

8. 21% 30% 84% In 2004, payment for physicians services was ______ percent of health care expenditures.

9. National Health Care Expenditures Type of Health Service National Gross Domestic Product

10. Economic Impact of A Rural Hospital:Marshall Memorial Hospital

11. a physical location designated as a Medically Underserved Area (MUA) or Health Professional Shortage Area (HPSA) as that type of hospital is intended to provide service to underserved populations. a rural community where the hospital is 35 miles by primary road or 15 miles by secondary road from another hospital. Both (a) and (b) are correct. Critical Access Hospitals may be located in _______________________.

12. True False Since Critical Access Hospitals are limited to no more than 25 beds and an average length of stay of no more than 96 hours, they are too small to provide any significant economic impact for their rural community, thus the acceptance by the Centers for Medicare and Medicaid (CMS) of this type of facility.

14. MARSHALL MEMORIAL HOSPITALMEDICAL SERVICE AREA

15. Review economic trends of the health sector for the U.S. and Marshall County; Identify the Marshall Memorial Hospital medical service area; Summarize the direct economic activities of Marshall Memorial Hospital; Summarize the direct economic activities of Marshall Memorial Hospital; Estimate the secondary impacts of Marshall Memorial Hospital on the economy of Marshall County. Objective of the Report

16. Marshall County Trends in Health Care

17. Marshall Memorial HospitalMedical Service Area

18. Marshall Memorial Hospital Direct Economic Activities

19. Marshall County Employment, Income, & Retail Sales Impact

20. Overview of Community Economic System

21. Estimating the Need for aRural Primary Care Physician

23. To examine the need for primary care physicians in Atoka, Oklahoma; and To estimate the costs and revenues associated with establishing a primary care physician practice in Atoka, Oklahoma. Objectives

24. Determine the need for primary care physicians; Determine medical service area and populations; Estimate primary care physician office visits; and Estimate the total demand for primary care physicians in the medical service area. Purpose of Study

25. Estimate the costs and revenues to establish a primary care physician practice; Estimate capital costs; Estimate annual capital costs, annual operating costs and total costs; Estimate revenues based on type of visit; Estimate alternate collection rates; and Determine estimated net income. Methodology of Study

27. Marshall Memorial HospitalMedical Service Area

28. Determine the need for primary care physicians; and Estimate the total demand for primary care physicians in the medical service area. Purpose of Study

29. Annual Physician Office Visits

30. Annual Physician Office Visits

31. Estimate Cost & Revenue to Establisha Primary Care Physician Practice

32. Estimate the costs and revenues to establish a primary care physician practice; and Estimate capital costs. Methodology of Study

33. Illustrate 2 Budget Alternatives Alternative 1 Assume 2,750 primary care physician office visits Alternative 2 Assume 4,750 primary care physician office visits Estimate Capital Costs

34. Capital costs are the total of all capital equipment and items Assume a 1,500ft2 building will be rented for both Alternatives with three examination/treatment rooms Estimate Capital Costs

35. Estimate Capital Costs – Both Alternatives

36. Estimate the costs and revenues to establish a primary care physician practice; and Estimate annual capital costs, annual operating costs and total costs. Purpose of Study

37. Estimated Capital Costs – Both Alternatives

38. Estimated Capital & Operating Costs (Both Alternatives)

39. Estimate the costs and revenues to establish a primary care physician practice; and Estimate revenues based on type of visit. Methodology of Study

40. Estimate Revenues per Visit Type

41. Estimate Types of Visits – Alternative 1

42. Estimate Types of Visits – Alternative 2

43. Estimate the costs and revenues to establish a primary care physician practice; and Estimate alternate collection rates. Purpose of Study

44. Estimate Collected Revenues – Alternative 1

45. Estimate Collected Revenues – Alternative 1

46. Estimate the costs and revenues to establish a primary care physician practice; and Determine estimated net income. Purpose of Study

47. Comparison of Alternatives 1 & 2

48. Bureau of Labor Statistics Bureau of Economic Analysis Centers for Medicare & Medicaid Services National Health Expenditures, 1970-2004 & National Health Expenditure Projections, 2005-2015 U.S. Census Bureau, County Business Patterns, 1988-1997 National Ambulatory Medical Care Survey, 2004, National Center for Health Statistics 2006 Regional Economic Information System, Bureau of Economic Analysis 2006 Local Employment & Income Data for Marshall County, Oklahoma U.S. Census Bureau, 1980, 1990, & 2000 Census; 2004 Census Estimate Populations; 2010 & 2020 Census Population Projections 2006 Oklahoma Department of Commerce Population Projections for the State, Metropolitan Areas and Counties, 2000-2010 References

49. Questions?