Healthcare Finance

In: Business and Management

Submitted By justin123560
Words 517
Pages 3
Justin Paalisbo
HSCI 425
Dr. Esparza
21 September 2015
Chapter 4 Questions
4.1 (a) What is the group’s underlying cost structure? $500,000 + ($25 x Procedures) (b) What are the group’s expected total costs? $500,000 + ($25 x $7,500) $500,000 + $187,500 = $687,500 (c) What are the group’s estimated total costs at 5,000 procedures? At 10,000 procedures? $500,000 + ($25 x $5,000) $500,000 + ($25 x $10,000)
$500,000 + $125,000 $500,000 + $250,000
= $625,000 = $750,000 (d) What is the average cost per procedure at 5,000, 7,500, and 10,000 procedures? $625,000 / 5,000
= $125 average cost per procedure at 5,000
$687,500 / 7500
= $91.67 average cost per procedure at 7,500
$750,000 / 10,000
= $75 average cost per procedure at 10,000
4.3 (a) What is the hospital’s underlying cost structure? $10,000,000 + ($200 x Inpatient days) (b) What are the hospital’s expected total costs? $10,000,000 + ($200 x 15,000) $10,000,000 + $3,000,000 = $13,000,000 (c) What are the hospital’s estimated total costs at 12,500 inpatient days? At
17,500 inpatient days?
$10,000,000 + ($200 x 12,500) $10,000,000 + ($200 x 17,500)
$10,000,000 + $2,500,000 $10,000,000 + $3,500,000
= $12,500,000 = $13,500,000 (d) What is the average cost per inpatient day at 12,500, 15,000 and 17,500 inpatient days?
$12,500,000 / 12,500
= $1000 average cost per inpatient day at 12,500
$13,000,000 / 15,000
= $866.67 average cost per inpatient day at 17,500
$13,500,000 / 17,500
= $771.43 average cost per inpatient day at 17,500
4.4 (a) What is the value of the cost pool? $100,000 (b) What is the allocation rate if (1) patient services revenue is used as the cost driver and (2) hours of housekeeping services are used as the cost driver?
Allocation rate = Cost / Patient Service Revenue
Allocation rate =…...

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