Module 1 – Lesson 2: Self-Assessment Answer

Question

It is important for the life care planner to recognize that accurately calculating costs is extremely important when developing a life care plan.

To demonstrate the magnitude of correctly calculating costs, take this case example in which the following recommendations were made for physical therapy, occupational therapy, and individual counseling:

  • Occupational therapy (OT): 3x/week for one year, at $85 per session.
  • Physical therapy (PT): 2x/week for one year, at $75 per session.
  • Individual Counseling (IC): 2x/week for 6 months, at $135 per session.

The life care planner calculates the costs as follows:

  • OT: (3 x 52 weeks = 156 sessions per year) 156 x $85 = $13,260 total
  • PT: (2 x 52 weeks = 104 sessions per year) 104 x $75 = $7,800 total
  • IC: (2 x 24 weeks = 48 sessions) 48 x $135 = $6,480 total
  • Total cost of therapy: $27,540

Answer

This total cost of therapy indicated here is incorrect. As you learned in your lecture, recall that a therapy year must take into account intermittent interruptions in therapy, (for example, vacation, camps, illnesses, holidays) and that 4.3 weeks per month should be used when the life care planner calculates the cost for therapy that lasts for several months.

Your solution should have been calculated as follows:

  • OT: (3 x 48 weeks = 144 sessions per year) 144 x $85 = $12,240 total
  • PT: (2 x 48 weeks = 96 sessions per year) 96 x $75 = $7,200 total
  • IC: (2 x 26* weeks = 52 sessions) 52 x $135 = $7,020 total
  • Total cost of therapy: $26,460

Even though there is only a total difference of $1080 between the two calculations, note the differences in the calculated costs of occupational therapy ($1020) and physical therapy ($600).

In these categories, the life care planner’s mathematical errors may not have adversely affected the patient, because more than enough funding was allocated for services. However, look at the difference of $540 between what was calculated for the cost of individual counseling and what was needed.

This example highlights the significance of precision and attention to detail in calculating costs. The therapies used here were inexpensive when compared to the higher costs of home health care, medications, routine medical procedures, and other areas in a plan. The figures were also used to demonstrate recommendations that only lasted for a short period of time. If these had been long-term services, the mathematical error would have compounded and become more skewed when compared to the actual costs.

*Note:  Since IC is recommended for 6 months, we calculate 4.3 X 6 months = 25.8 (which we rounded to 26).

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