Please answer the question if your well familiar with Class: HSM 340, Essential of Health Care Finance. Two questions I need help with.

1. Based on the below information, what dollar effect did the increased admission rate have on cost?

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

2.Based on the information below, what rate must be set to generate the required $80,000 in profit in the preceding example?

You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures	$10,000
Budgeted Cost	$400,000
Desired Profit	$80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

Payer	Volume%	Discount%
Blue Cross	20	4
Unity PPO	15	10
Kaiser	10	10
Self-Pay	5	40
	50%