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Assessing and improving Efficiency In 2006 it was estimated the annual number of cases of community acquired pneumonia in the U.S. was between 5,000,000 and 6,000,000 with a total cost of more than $8 billion. While the cost per case is low, the cost per case for patients requiring hospitalization is not low. A group of physicians and support staff decided to analyze DRG 89, Pneumonia, to determine if there were cost saving opportunities and to prioritize any opportunities identified. Using the table below, A) calculate the potential cost savings based on the current treatment profile and the best practice identified, B) divide the potential savings based on whether the physician must change their practice style or managers should reduce the cost of delivering services, and C) prioritize the top four opportunities, i.e., which areas should be targeted for improvement first. DRG 89 - Community Acquired Pneumonia Current Practice Service Admission Med/Surg. Respiratory therapy Rehab therapy Dietary Clinical Lab Radiology Pharmacy Social services Cardiology Total Cost Quantity Cost 1 $39 6 $1,200 6 $200 4 $150 18 $23 18 $75 6 $100 36 $110 3 $75 1.5 $100 Total cost $39 $7,200 $1,200 $600 $414 $1,350 $600 $3,960 $225 $150 $15,738 Best Practice Quantity Cost 1 $30 4.9 $1,050 6 $150 3 $150 14.7 $15 15 $75 4 $95 30 $85 $60 1.5 $100

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