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You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Use the following data to calculate the variances.

Budget
Actual

Inpatient Costs
$12,568,500
$16,618,350

Members
42,000
42,000

Admission Rate
0.070
0.095

Case Mix Index
0.90
0.85

Cost per Case (CMI = 1.0)
$4,750
$4,900

 

Question 2.

Budgeted Procedures
$10,000

Budgeted Cost
$400,000

Desired Profit
$80,000

Payer
Volume%
Discount%

Blue Cross
20
4

Unity PPO
15
10

Kaiser
10
10

Self Pay
5
40

50%

 

Question 3.

Budget
Actual

Wage Rate per Hour
$16.00
$17.00

Fixed Hours
320
320

Variable Hours per Relative
Value Unit (RVU)
1.0
1.1

Relative Value Units (RVUs)
1,000
1,200

Total Labor Hours
1,320
1,640

Labor Costs
$21,120
$27,880

Cost per RVU
$21.12
$23.23

 

Question 4.

 

Question 5.

 

Question 6.

 

Question 7.

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