7.2 the Audiology Dept. at Randall Clinic Offers Many Services to the Clinic S Patients

7.2 The audiology dept. at Randall Clinic offers many services to the clinic’s patients. The three most common, along with cost ant utilization data, are as follows:

7.3 Allied Laboratories is combining some of its most common tests into one price packages One such package will contain three test that have the following variable cost:

7.4 Assume that Valley Forge Hospital has only the following three payer groups:

a. What is the hospital’s net income?

b. What PMPM rate will the hospital have to charge to retain its Part a net income?

c. What overall net income would be produced if the admission rate of the capitated group were reduced from the commercial level by 10 percent?

d. Assuming that the utilization reduction also occurs, what overall net income would be produced if the variable cost per admission for the capitated group were lowered to 2,200?

8.1 Consider the following 2011 data for Newark General Hospital (in millions of dollars):

a. Calculate and interpret the profit variance.

b. Calculate and interpret the revenue variance

c. Calculate and interpret the cost variance

d. Calculate and interpret the volume and price variance on the revenue side

e. Calculate and interpret the volume and management variance on the cost side.

a. Revenue variance = actual revenue- static revenue

8.2 Here are the 2011 revenue for the Wendover Group Practice Association for four different budgets.

.

a. What does the budget data tell you about the nature of Wendover’s patients: are they capitated or fee-for-service?

b. Calculate and interpret the following variance:

Revenue variance

Volume variance

Price variance

Enrollment variance

Utilization variance

8.3 Here are the budges of Brandon Surgery Center for the most recent historical quarter.

a. Explain how each amount in the flexible budget was calculated.

b. Determine the variance for each line of the profit and loss statement, total variance, a volume variance, and a price variance.

c. What do the Part b result to Brandon’s managers about the surgery center’s operations for the quarter?