Your hospital faces considerable revenue uncertainty because you have to negotiate contracts with several health insurance companies. You forecast a 10% chance your total inpatient revenue from Florida blue will be $456,000, a 20% chnace that your inpatient revenue from Medicare will be 575,634, a 30 percent chance that your inpatient revenue from Medicaid is 300,000, a 40 percent chance that your will get 60% back of your bad debt (600,000) from Medicaid disproportionate share dollars program. Your costs are also uncertain, as the prices of your supplies fluctuate considerably. You forecast a 40 percent chance that your costs will be $400,000 and a 60 percent chance that your costs will be $250,000. 

Use Excel to set up a decision tree for your profit forecast (it does not matter whether costs or revenues come first).

Answer rating: 100% (QA)

Hospital Revenue Uncertainty Decision Tree Excel This decision tree uses Excel to model the hospitals profit forecast considering the uncertainties in ... View the full answer