Question

Elaborate on the implications of a Health Services Department moving from a cost center to a profit center. Information discussed must include:

• The implications of having public health professionals that are not permitted to bill or have reimbursable codes.

Answer 1

Implications of a Health Services Department moving from a cost center to a profit center are many. When the administrative costs of the Health Services Department are made to come down and at least a profit-making activity becomes part of it, the department would move from a cost center to a profit center. Once the bills, now being collected by the healthcare organizations or providers, will be collected by the department, it will have a revenue generation of its own and the whole healthcare revenue system will be under its regulations. When it becomes a profit center, the department will have control over the healthcare costs and this will bring down the healthcare cost considerably. Even the dream policy of 'healthcare for all' would become a truth gradually. Along with this comes the issue of public health professionals who are not permitted to bill or have reimbursable codes. The implications of this would be farreaching and many. When public health professionals are not permitted to use reimbursable codes, they will be paid by the department for a month's work as a salary and not as a particular amount for a particular procedure or treatment. Billing and insurance-related (BIR) costs and administrative complexity costs play a major role in making the Health Services Department a cost center. These implications would reflect in billing and insurance as well as administration. BIR costs and administrative costs will be drastically reduced as a result of these changes.