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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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