Riddle me this.

January 29, 2018

 

As a young boy, my dad had a habit of teaching me how to think critically through the use of stories and riddles. Here's one that brings back lots of memories (and comes with an essential point and life lesson):

 

Three men walk into a hotel. The front desk clerk tells them that the room they will share will cost $30 (remember, this was back in the early 60s!). This means that they each would pay $10.

 

After the men went to their room, the front desk clerk realized that he overcharged them and gave the bellhop $5 to bring back to the men. 

 

On the way up to the room, the bellhop realized that $5 is not equally divisible between three men and he decided to pocket $2 and gave the men $3 to split equally between them. That now means that each man paid $9 for the room and not $10. 

 

If we multiply $9 times 3 men, that comes to $27. Add the $2 that the bellhop kept, and that equals $29. What happened to the other dollar of the original $30?! 

 

 

A riddle like this forces us to think critically about how we contemplate costs. It's easy to fall into an "accounting trap" and become aloof to the reality of cost allocation in our practices (see prior blogs that describe this process). 

 

So I will ask again... what is it really costing you to perform your revenue cycle management, and how well is it being done?

 

PS: if you find yourself losing sleep over this riddle (like I did as a young boy), for the explanation simply email me at John@nemohealth.com. I will be happy to discuss the answer as well as your billing costs!

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