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. .

1. 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.

2. 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

3. 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.

4. Question 5.
Question 6.
Question 7.