4. Using the income statement and balance sheet examples provided in Chapter 3 of the textbook, calculate the return on capital in 2019. How would knowing the return on capital help inform overall operations of the hospital? 5. Compare and contrast the incentives to health care providers under a fee-for-service reimbursement mechanism versus a prospective payment mechanism

TABLE 3-1 Hospital Income Statement ABC Hospital

As of August 31, 2019 Income Statement ($,000)

Inpatient revenue $1,500,300

Outpatient revenue 430,320

Total patient revenue 1,930,620

Deductions, discounts, and allowances (1,000,000)

Net patient revenues $930,620

Total operating expenses 830,220

Operating income $100,400

Other income (donations, contributions, gifts) 5,200

Income from investments 15,001

Governmental appropriations 0

Auxiliary and non patient revenue 3,000

Total non patient revenue $23,201

Total other expenses $124,400

Net income or (loss) ($799)