What is the difference between the two A/R rates above? Can you collect it from the patient? What happens to the difference?

Which of the following costs are fixed, which are variable, and which are direct or indirect:

Materials/supplies (gowns, drapes, bedsheets)

Wages (nurses, technicians)

Utility, building, usage exp (lights, heat, technology)

Medications

Licensing of facility

Per diem staff

Insurances (malpractice, business, and so on)

Calculate the contribution margin for one case (in $) with the following costs for this period, per case

Materials/supplies: $2,270

Wages: $2,000

Utility, building, usage exp: $1,125

Insurances (malpractice, business, and so on): $175

Using the above information, determine which is fixed and which cost is variable. Then, calculate the breakeven volume of cases in units for this period.

Suppose you want to make $150,000 profit between this period and next period to fund an expansion to the NICU. How many cases would you have to see? At what payer mix would this be optimal?
What is the difference between the two A/R rates above? Can you collect it from the patient? What happens to the difference?

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