Investigation of a Three Value Technique for predicting health care facility minimum income probability distributions

The purpose of this research is to develop and investigate use of a technique for predicting health care facility future minimum income (FML). For this purpose, a computer program, Three Value Technique (TVT), was developed using Microsoft EXCEL for Windows 4.0. TVT allows estimation of anticipated number of office visits with three values, L (least possible), M (most probable), and H (most possible), and speculation of proportion of payment sources, i.e. HMO's, Medicare, Medicaid, etc. The mathematical an statistical foundation of TVT is based on a method that determines the minimum number of independently distributed random variables required in a linear combination in order that its distribution can be approximated by the normal density function, i.e. normal approximation to linear combinations.;In this research, number of office visits are treated as a random variable and are approximated by the triangular distribution. Proportion of payment data is used to compute coefficients in linear combinations. If normal approximation is not adequate, TVT simulates the FMI distribution based on the input data. Therefore, TVT output is, in some cases, a plot of the normal probability density function for a FMI distribution and associated cumulative probabilities. TVT output may also be a histogram of simulated FMI values and associated summary statistics such as a frequency distribution by count and percentages.;TVT provides a useful tool to estimate the distribution of FMI. A conclusion of the research, after several demonstrations of the program to health care professionals, is that current methods of predicting income are quite immature in comparison with probabilistic calculations utilized by TVT. Further, the computer system can provide vital and beneficial financial data to health care facilities.