Healthcare Project Management Assignment

BUSINESS PLAN FOR
STRATEGIES TO CUT DOWN
COST BY PHYSICIAN NOT
OFFERING UNNECESSARY
TESTS
Student Name: Student ID:
Unit Name: Unit ID:
Date Due: Professor Name:

Executive Summary
Rising costs in the healthcare systems have been a huge worry for policy makers, insurance
companies, politicians and especially patient parties. Patients have often been prescribed a
number of tests that raise costs for overall treatment delivery. The scope of this project deals
with strategies that can impact substantial reduction in healthcare costs. An analysis of steps
according to algorithm and process map has been incorporated. New processes and procedure
along with changes in project objectives are defined that can bring about reduction in costs for
overall health care system. Objective definition includes changes to be impended to stakeholder
of the entire healthcare system. With such changes in strategies there is bound to be
transformations in financial implication for the entire health industry. Cost benefit analysis for
the transformed system needs to be analysed based upon the intensity of the care. Better costing
systems are assessed that can yield benefit for the entire health care industry. A timeline has been
provided for impending changes to be brought about in the healthcare industry which is depicted
by means of a GANTT chart. Further a continuous improvement and evaluation tool is included
such that quality healthcare can be provided at affordable costs. Recommendations while
conducting this critical study could easily be understood will be adopting new strategies and
implementing them into action for generation of greater impact.

Table of Contents
Executive Summary.........................................................................................................................2
Table of Figures...............................................................................................................................3
1.0 Introduction................................................................................................................................4
2.0 Algorithm...................................................................................................................................4
3.0 Process Map...............................................................................................................................6
4.0 New Procedure...........................................................................................................................8
5.0 Change Project Objectives.........................................................................................................9
6.0 Financial Implications.............................................................................................................11
7.0 Staff Implications.....................................................................................................................12
8.0 Cost/Benefit Ratio...................................................................................................................14
9.0 Timeline for Implementation...................................................................................................15
10.0 Tool to Evaluate Implementation of the Project....................................................................16
11.0 Chart/ Summary of National Standards, Accrediting body standards, regulatory body
standards........................................................................................................................................18
12.0 Comparison of best practices and standards compared to current facility practices.............19
13.0 Conclusion and Recommendation.........................................................................................20
Reference Lists..............................................................................................................................22
Table of Figures
Figure 1: Algorithm for Cost Cutting in Prescription of Medical Tests...........................................5
Figure 2: Process Map....................................................................................................... 7
Figure 3: Cost Overheads Break Up.................................................................................... 14
Figure 4: CBA for the Project............................................................................................ 14
Figure 5: Gantt Chart for New Strategy Application................................................................16
Figure 6:PDCA Cycle..................................................................................................... 17

1.0 Introduction
Healthcare sector within the US is gradually expanding however it caters to a segment of the
society. The weaker section of the society cannot afford best possible healthcare as doctors often
recommend unnecessary clinical tests that raises costs of medical bill (Kotler, 2011). With
rising costs in healthcare facilities, there is an increase in financial stress amongst varied groups
of people. The scope of this project concerns development of strategies to cut down on high
health care costs in hospitals by way of reducing the burden of unnecessary clinical tests. Despite
presence of a large number of health and insurance plans in the market, cost related to medical
continues to grow. In most cases health insurance companies requires patient to bear 20% of total
medical bills. Often a sizable proportion of which is wasted, which if avoided could lead to
decrease in health care costs. Appropriate allocation of resources and proper management in
healthcare systems can help upkeep quality of patient care and reduce physicians from
prescribing unnecessary tests. Most physicians operates as business units where medical units
also demand substantially higher prices to be paid for medical treatments. The scope of this
business strategy is to identify key stakeholders that contribute significantly to such increase in
costs and then overcoming challenges in meeting external costs.

2.0 Algorithm
Healthcare costs in the US exceeds 17% of total GDP and depicts further rising trends. While
other countries also have increasing trends but spends comparably less compared to US. Experts
suggests various reasons behind such increasing trends as ageing population and development of
newer treatments (Garfield, 2012). Prescribing of unnecessary medical tests can be attributed a
fundamental reason for such escalation in costs structures. Absence in understanding ways costs
can compared outcomes of patients can help focus on causes of treating patients. Policy makers
and politicians further argue that burden of costs that they bear along with health insurance
companies for delivering patient treatment rather than focusing on costs that patients bear. While
payer reducing reimbursement does not reduce bill or lowers overall costs, rather it reduces bills
borne by insurers. In order to develop strategies for reduction in healthcare costs by reducing
number of tests prescribed by physicians, the following course or algorithm will be followed.

Figure 1: Algorithm for Cost Cutting in Prescription of Medical Tests
Source: Author
3.0 Process Map
A process map depicts flow of information and resources through decision making alternatives.
In this current situation a process map will depict flow of information through a particular
hospital or healthcare institute such that patient care can be delivered. A process map will
include all relevant stakeholders along with decisions processes involved in order to cater to
patient care (McCormick, 2012). The below depicted process map can be used to deliver
patient care reducing unnecessary costs that might raise costs associated with overall treatment.
Allocation of resources to departments and services is done on actual resources and not on basis
of reimbursement value.