Assume that a group practice has both capitated and fee for-service (FFS) patien

Question

Assume that a group practice has both capitated and fee for-service (FFS) patients. Furthermore, the numer of capitaned enrollees has changed over the budget period. In order to calculate the volume variance and break it down into enrollment and utilization components, how many flexible budgets must be constructed? Consider the following 2011 data for Newark General Hospital (in millions of dollars) Calculate and interpret the profit variance. Calculate and interpret the revenue variance. Calculate and interpret the cost variance. Calculate and interpret the volume and price variances on the revenue side. Calculate and interpret the volume and management variances on the cost side. How are the variances calculated above related? Here are the 2011 revenues for the Wendover Group Practice Association for four different budgets (in thousands of dollars): What does the budget data tell you about the nature of Wendover's patients: Are they capitated or fee-for-service? Calculate and interpret the following variances:

Explanation / Answer

a) They are not capitalized as in all budget amounts are different. They are charged for fee for service.

b)

Revenue Actual Results A $300 Flexible (Enrollment/ Utilization Budget) (total budget) B 200 Flexible (Enrollment Budget) C 180 Static Budget D 425 1) revenue Variance A-D $125 unfavourable 2) Volume Variance D-B 225 Price Variance A-B $100 Favourable Enrollement Variance A-C 120 Favourable Utilization Variance A-B $100 Favourable

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.