SU_MHC6305_W3_A2
Financial Management of Healthcare Organizations
Text-book: Healthcare Finance: An Introduction to Accounting and Financial Management
This weeks readings:
· Cost Behavior & Profit Analysis
· Cost Allocation
· Pricing & Service Decisions
· Planning & Budgeting
Analyzing Bay Pines Medical Center’s Financial Statement
After gaining an understanding of the components of a financial statement, analyzing and applying what the components represent, in terms of future planning, are the most important aspects of working in healthcare finance. Consider the following data and make your best analysis of per member per month (PMPM) rates, considering reductions in utilization or pricing.
Bay Pines Medical Center estimates that a capitated population of 50,000 would have the following base case utilization and total cost characteristics:
Service Category |
Inpatient Days |
Average Cost |
General |
150 |
$1,500 |
Surgical |
125 |
$1,800 |
Psychiatric |
70 |
$700 |
Alcohol/Drug Abuse |
38 |
$500 |
Maternity |
42 |
$1,500 |
Total |
425 |
$1,367 |
In addition to medical costs, Bay Pines allocates 10 percent of the total premium for administration/reserves.
Tasks:
On the basis of your data analysis, respond to the following:
Submission Details: