Financial Diagnostic Tools and Comprehensive Life Care Planning

The Life Care Planning market has relied on a variety of methods for determining the monetary impact of care projected in a life care plan. Costing methodologies have varied in their approach, formulary, and comprehension. This article introduces a five-step approach to facilitate the development of a comprehensive clinical and financial picture. The objectives of this article will be three-fold: 1) a general overview of the market problems in understanding health care reimbursement and existing costing methodologies; 2) a review of a five-step approach costing methodology with a primary objective of streamlining the efficacy of a final payment determination; 3) what can go wrong. How exactly is the money spent in health care? According to the Centers for Medicare and Medicaid (CMS, 2001) statistics, health care expenditures had a 6.9% increase from the prior year, which is a record increase noted since 1988. Overall Medicare expends about $224 billion and $1.3 Trillion is spent by non-government entities. Two significant areas include a 17% increase in pharmacy expenditures and a 5.1% increase in hospital care. In fact, recent 2002 statistics indicate that outpatient services are leading with a 16.3% increase while inpatient care expenditures grew at 7.1%. The next chart provides an overview of health care funding.