HA599 Unit 6 Arrival Point Financial Impact Analysis Example

Pricing What the Triage Nurse Already Pays: A Capstone Financial Impact Analysis That Costs Current Ambulance Handoff Practice at a Composite Regional Medical Center First, Then Tests a Staffed Arrival Point Against a Cheaper and a Costlier Rival, With Break-Even Stated Plainly

[Student Name]

Purdue University Global

HA599: Master's Capstone in Health Care Administration

Unit 6 Financial Impact Analysis

[Instructor Name]

[Date]

The hospital and every figure are composite and bracketed for the writer's own data; the arithmetic shows the method, and inputs belong in the organization's own workbook.

The Cost of Doing Nothing

Overtime: [$64,000] a year in overtime for triage and charge nurses tied to hallway handoffs, from payroll records matched to tracking-board times. Diversion: [384] hours last year. Each hour redirected about [1.4] ambulances, or about [538] patients a year. Of those, [31] percent would have been admitted, about [167] admissions. Each admission is valued at its contribution margin, payment minus variable cost, of [$4,150], not at charges, which would overstate the loss. Lost contribution: about [$693,000] a year. Total measurable cost of current practice: about [$757,000] a year. Not counted: the county's [410] ambulance unit-hours a month lost at the wall, which cost the county rather than the hospital, and harm to the relationship with EMS.

Alternative 1: Hallway Protocol, No Added Staff

A written protocol, signage and training for crews and triage nurses. Cost: about [$6,000] one time. Expected effect: small. The evidence appraisal found no direct evidence that unstaffed protocols shorten offload delay, and the one study of a staffed role saw gains fade when the role was removed (Greaves et al., 2017). Assumed diversion reduction: [10] percent, saving about [$69,000].

Alternative 2: Noon-to-Midnight Arrival Point (Recommended)

Staffing: [4,380] nurse hours a year, each costing [$91] once benefits are added, for [$398,580]. One-time costs: alcove work [$38,000], badge reader [$9,000] and training [$12,000], or [$59,000]. First-year cost: [$457,580]. Offsets: about [75] percent of current overtime, [$48,000]. Break-even, ongoing years: ([$398,580] minus [$48,000]) divided by [$693,000] is [51] percent. Diversion must fall by about half for the arrival point to pay for itself. In the first year, including one-time costs, it must fall by about [59] percent. The arrival point pays for itself only if diversion falls by about half, and the analysis says so on the first page.

Alternative 3: Round-the-Clock Coverage

Staffing: [8,760] hours, [$797,160] a year. The needs assessment found overnight volume too thin to justify it; break-even would require more than eliminating all diversion, so it cannot pay for itself.

Comparison

Hallway protocol: lowest cost, little expected effect. Noon-to-midnight point: moderate cost, break-even at about half less diversion. Round-the-clock: highest cost, cannot break even. The recommended option must beat both rivals, not merely clear zero, and it does so only if diversion falls substantially.

Sensitivity

If contribution margin per admission is [20] percent lower, break-even rises to about [63] percent. If the share of diverted patients who would have been admitted is [37] rather than [31] percent, break-even falls to about [43] percent. Diversion is the variable that decides the result; that is why the evaluation plan tracks it most closely.

Why Proceed if Break-Even Is Uncertain

Three reasons. The cost of doing nothing is already large and rising. The legal exposure of holding patients on stretchers is reduced by prompt acceptance, a benefit that is real though hard to price. And the pilot is time-limited with stop rules, so the hospital risks one year's cost to learn whether the result is achievable.

What the Chief Financial Officer Will Ask

First: why should diversion fall at all, if boarding is the root cause? Because part of diversion is triggered by crews stacking up at the door, which the arrival point addresses directly; the house supervisor's logs show that [38] percent of diversion decisions last year cited ambulances waiting rather than bed counts. Second: why not wait for the boarding project? Because that project's timeline is [18] months, and the cost of doing nothing accrues meanwhile. Third: what if diversion falls by only a quarter? Then the arrival point loses about [$177,000] a year, and the evaluation's stop rule would bring it back for a decision at [90] days, before most of that loss accrues.

Assumptions Table

Loaded nurse rate [$91]; contribution margin [$4,150]; ambulances per diversion hour [1.4]; admission share [31] percent; overtime offset [75] percent. Each comes from payroll, finance, diversion logs or county data, and each should be replaced with the organization's own figure. Contribution margin, not charges or revenue, is the right measure of what lost admissions cost the hospital (Cleverley & Cleverley, 2018).

Limits

Diversion has many causes, including inpatient boarding, which the project excludes. If boarding worsens, diversion may not fall even if handoffs speed up. Research has noted that offload delay and diversion are linked to crowding beyond the emergency department (Li et al., 2019).

Conclusion

The noon-to-midnight arrival point is the only option that could both work and pay, and only if diversion roughly halves. That is a demanding target, stated plainly so executives can judge it before committing a year of nurse hours.

References

Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance (8th ed.). Jones & Bartlett Learning.

Greaves, T., Mitchell, M., Zhang, P., & Crilly, J. (2017). The impact of an emergency department ambulance offload nurse role: A retrospective comparative study. International Emergency Nursing, 32, 39-44. https://doi.org/10.1016/j.ienj.2016.12.005

Li, M., Vanberkel, P., & Carter, A. J. E. (2019). A review on ambulance offload delay literature. Health Care Management Science, 22(4), 658-675. https://doi.org/10.1007/s10729-018-9450-x